Considering ERP Software in 2018? Stay on the Human Side of ERP

Many teams we talk to are evaluating ERP software in 2018. To help shed light on the topic, Ultra’s ERP Blog recently looked at key trends in a recent blog post entitled Looking Ahead: Ultra’s Perspectives on ERP in 2018.

Today we suggest that ERP Software in 2018 should put the focus on managing change and the human side of ERP.

Understanding Change in ERP Implementations

Why are we still finding that 70% of ERP projects fail? Because ERP implementations entail human beings.

As humans, we are unsuccessful in changing our behavior 70% of the time, according to authors Lisa Laskow Lahey and Robert Kegan in their book Immunity to Change: How to Overcome It and Unlock the Potential in Yourself and Your Organization. Immunity to change is so strong that only 1 out of 7 heart patients is able to change diet, exercise, and other lifestyle habits to live.

Even as teams consider ERP software in 2018, it’s typical for leadership to not fully understand change and the human side of ERP as it undertakes an ERP software selection process. Transforming business processes and implementing a new or upgraded ERP system equals change, and our first instinct as humans is to resist change.

Change creates fear of the unknown and can put the focus on the change itself rather than goal. It must be internalized- we need to know and understand how the change impacts us, our job, and why.

When leadership doesn’t define why we are making a change, people’s cynicism and fears have room to grow, and hidden conflicts can undermine efforts. Moreover, staff may fall back on unwritten cultural and tribal rules which can negatively impact the change.

Thinking ERP Software in 2018? Think Change Management

Successful leaders who understand change engage the organization at all levels. They deeply involve everyone, keep them in the loop, listen to their ideas, and encourage ownership for each employee’s part in the change.

Further, they understand the need to balance the change with the employee’s daily job duties. At the same time, successful leaders identify and monitor any hidden conflicts that could sabotage the business transformation.

Project Management/Change Management

Organizations that successfully implement an ERP system are often working with a project management officer from business improvement consultants. The manager’s primary goal, according to Gary Hamilton in his article Project and Change Management: Yin and Yang? is to “identify, communicate, and effectively manage all aspects relating to how any changes will ultimately impact all stakeholders, employees, and an organization’s overall well-being”.

Change management is one of the most difficult parts of implementing ERP software applications, not because it’s technically difficult, but because it involves changing people’s attitudes, and an organization’s very culture. The human side of ERP is a critical point to understand.

A Note About Communication

Answering the question about why we’re making this change and providing ongoing education build the foundation to accepting change. Identifying all stakeholders and knowing who the end users are is crucial.

It is also important not to limit the communication to specific training in all aspects of the new system- it is extremely valuable to provide the answer as to why we’re making this change and painting the big picture so that employees can understand how they fit into the overall process and contribute to the company’s objectives.

As teams consider ERP software in 2018, this is particularly important since ERP systems usually involve some shifting of roles or reallocation of work. Some users will find they have more to do under the new ERP system. Others will find their responsibilities decreased. Both of those situations can be unsettling to staff.

Your staff members need to understand the new business processes and software changes, especially the ones that affect them personally. Once this foundation is laid, you are building the future of the organization on solid ground.

Learn More

Our team of ERP selection consultants has deep insight about the topics shared here.

Learn about this topic in Ultra Consultant’s white paper, A Change Management Strategy for Your ERP Project and blog, ERP Change Management: A Focus on Both People and Process.