Business Process Improvement

For today’s manufacturing and distribution organization looking to transition from the status quo of legacy systems to modern ERP, it doesn’t get much bigger than evaluating, selecting and implementing a new ERP solution.

In a typical project, it’s an unfortunate reality that the project team spends much of their time managing resistance from various quarters of the organization.

Looking at User Resistance to ERP

Industry analysts define resistance to change as an insistence that the status quo remains and that there is no need to change it.

An organizational change management approach puts into place initiatives that manage resistance and to make the organization change-ready for the initiative to succeed.

In this post, we will look at the causes of resistance to change in ERP and offer an approach for project teams to manage and address user resistance to ERP

Factors Leading to User Resistance of ERP:

In previous industry research projects, I’ve come across a study from an academic team that surveyed 169 IT leaders regarding users’ resistance to enterprise applications. From the surveys, the researchers composed the following factors that led to users resisting the use of applications, namely ERP applications:

1 – Resistance based on system dissatisfaction: A significant resistance factor uncovered by researchers was in the area of systems design. Resistance is common when the new system is neither simple nor easy to use, or if the system’s features do not serve the needs of the users. If an evaluation and selection project led to a bad fit, users quickly note that the features of the systems do not easily comply with the company’s workflow.

2- “People-factor” resistance: This category of resistance includes those users who come with biases or were predisposed to resist a certain ERP solution due to their prior experiences. Some users resist change because they have not been part of the team tasked with effecting the change in the organization. They therefore feel excluded in the change process and hence the resistance. Existing relationships with the project team members can also color an ERP implementation project. Researchers note that many users feel threatened by the new system if they see their jobs at risk or did not receive appropriate training.

3 – Resistance based on workflow interactions: The researchers noted that some teams resisted an ERP implementation because the way they worked was no longer the same. They considered that the processes did not harmonize well with the ERP system, which required considerable effort to redesign the processes in order to implement the system. Others were threatened because of the redistribution of work and responsibilities which took place after the system was launched. Implementing an ERP solution means acquiring new skills to be able to use the new systems. The fear or apprehension that one does not have what it takes to learn these new skills may translate into resistance.

4 – Power and politics related resistance: This type of user resistance is related to perceived power shifts and changes in political structure of the organization. For instance, launch of the system often provides are distribution of power in the organization which would be a threat to some. There could have been internal political disputes that made the system implementation difficult. In addition, researchers saw cases where one group or team member took advantage of the system implementation to raise their rank in the organization.

Strategies to Mitigate User Resistance to ERP

Ultra delivers tremendous value to manufacturing and distribution teams facing these resistance factors. Read more about Ultra’s organizational change management focus areas here. In assessing the resistance factors summarized above, industry researchers found that organizations can mitigate user resistance to ERP by putting into place several key strategies. A summary of these strategies includes developing the business case for change, effective communications, executive support, training and organizational considerations.

Looking for A Change Management Strategy for your ERP Project?

Here’s a high-level look at each of these areas:

1 – Developing the Business Case for Change

Before implementing any ERP Solution, it is imperative to develop a proper business case for change. This is the foundation of Ultra’s proven methodologies for a successful ERP project. A thorough business analysis and current state analysis will reveal real gaps between what is on the ground currently and where the organization wants to go.

We’ve seen projects go off the rails without this focus. Implementing a business process improvement culture is all about involving and engaging all users. When it comes to reducing user’s resistance to ERP, here is where the value of teaming with an independent ERP consultant comes into play.

2 – Transparent and Thorough Enterprise-Wide Communication:

The business case for change is indeed foundational, but unless the need for the change is properly communicated within the organization, there will user resistance to ERP.

Researchers have noted that the “the art of communication is the language of leadership.” To drive successful change related to an ERP implementation, leaders must be transparent in the vision and direction of the organization to build trust in the organization.

Leadership must be as open and honest as possible when disclosing the direction of the organization in terms of enterprise technology. Leaders must continually update their workforce of the changes and direction of the project. Finally, the team must provide visibility to their workforce by speaking directly with employees asking them if they have any questions, concerns, or if they have any ideas that could improve their daily jobs or the operation as a whole.

3 – Executive Support

Getting the support and commitment of the senior management of the organization is a key strategy to mitigate user resistance to ERP.

Our team regularly stresses the importance of ERP executive sponsorship. Without this, the change is dead on arrival. It is important that most of the communications regarding the change come directly from the top management for maximum impact.

Also, the process of making the needed process, organizational and role changes can only happen timely, with the support of top management.

4 – Training

Whether an organization is implementing a new ERP application or instituting a new process, employees should receive extensive training to ensure the success of the initiative.

Training starts with a thorough needs analysis to determine the required training and support necessary to use the new system.

Users must be freed from their daily tasks to digest training that is relevant to the organization with real examples from the organization to illustrate how the system impacts each user. With adequate training, the employees can properly adjust to the change introduced by the ERP system, making them receptive to the change more easily. Even after go-live, industry researchers stress continuous training to ensure the users are comfortable with the application.

5 – Organizational Strategies

A new ERP system often comes with departmental changes and reworked organizational structures. It’s key to make sure roles and org structure are communicated and understood by all users, as well as an understanding of any processes that have been re-engineered or refined to accommodate the new solution.

Clear communications of these organizational strategies will calm employee fears and reduce uncertainty.

Identifying business process owners who can serve as “change agents” is also important. Change agents should be identified from all parts of the organization impacted by the ERP implementation.

Final Thoughts

We’ve only touched on five main strategies to properly “sell” a technology initiative and mitigate user resistance to ERP. There are additional approaches to consider beyond the scope of this blog post, but at its most fundamental, reducing user resistance to ERP involves managing expectations.

Is it clear to all the stakeholders the scope of the project, the goals and expected “future state” outcomes? A realistic management of expectations will help prevent conflicts and user resistance to ERP.

Ultra’s independent ERP consultant team has seen time and again that an enterprise technology initiative is an opportunity for a manufacturing or distribution company to apply the necessary resources to make lasting business change.

Traditional enterprise project management activities are not enough to instill a culture change. Effective organizational change management is the necessary component to achieve project success and sustainable change.

Contact the Ultra team for the right approach, experienced resources, and partnering commitment to ensure their team functions as change agents during the project and for the long term.