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Submitted by Carrie Gabris on 7 October 2020

Change Management Can Make or Break an ERP Implementation

Ask anyone who has experienced the failure of an ERP implementation the primary reason for the failure, and they’re very likely to point to poor change management. Only 54% of change initiatives succeed, which is pretty dismal, especially when you think about the impact, which not only includes not achieving results but also wasting resources and diminishing morale. The cost is high.

This blog discusses the importance of good change management and how to ensure you have the right strategy in place to ensure a successful ERP implementation.

Why Change Management Is So Important…and Why It Runs Projects Aground

We hear a lot about the importance of change management, but what does that mean? When you look at the specific reasons why technology implementations fail, the key contributing factors are:

  • Fatigue/overwhelming employees with too much, too fast
  • Top-down (executive/management) requirements are dictated and implemented without getting buy-in and feedback from users—which is particularly de-motivating when the employees are the people who will be using the new system
  • Assuming that communication is the same as engagement—which connects back to the previous bullet
  • Dealing with the process and system but forgetting about the culture—how things get done, which is related to how employees feel, believe, and act 
  • Not providing information on the project itself (timeline, expectations from everyone, participation expected, etc.) – including ongoing updates
  • Ensuring the project is owned by the business AND the IT department—IT project ownership does not involve day-to-day knowledge of challenges and does not support ownership of the solution after go-live
  • Not confirming agreement and buy-in across functional area disciplines—siloed work efforts are not removed

Poor change management is at the root of all these factors, making it clear that good change management is critical to success. Effective change management addresses any “red-flag” issues as they happen. It reduces the risk of scope and time creep as well as and quality issues. Risk is reduced because a deeper knowledge of the business is known, the right players are involved, and thereby, deterrents and surprises are kept to a minimum.

The trouble is, however, that change management is often simply forgotten or is an afterthought when IT projects are undertaken. It is against our instincts as humans to change because change is typically uncomfortable, so it is imperative to have a solid plan in place for effective change management and ultimately, a successful implementation.

​Change is Uncomfortable, But It’s Not Your Adversary​

Yes, change is uncomfortable. But the most important thing to remember—and to help your employees understand—is that change, when done right, is a very good thing. Your management team’s ability to effectively mitigate resistance to change is probably the most critical skill they can possess. Without true adoption or employee proficiency, you will fail to maximize the potential of your digital assets and your future. ​ Remember this, and feel free to use it with your employees: Change for the right reasons is disruption—but with positive intent. 
On the other hand, resistance to change is not inherently bad. Getting a little pushback can be healthy for your management team, too. It forces management to choose their battles carefully—to carefully consider the changes they’re asking for and ready to back their decisions up. This goes a long way in getting employees to buy-in. It also encourages good planning and communication​, with the intent of addressing questions and concerns even before they’re brought to their attention. 

8 Tips for Effective Change Management​

Now that we’ve established the importance of effective change management, let’s talk about some strategies and approaches—the “toolkit” needed to successfully attain absorption of change within your organization and culture​.

1. Look at the Project with a Holistic Lens

Technology is moving away from “band-aid” solutions focused only on solving immediate problems with the right software features and towards more holistic “platform-oriented” solutions that consider the current state as well as the desired future state, including not just solving problems, but reaching goals. If you’ve taken this approach to select your ERP solution, that’s excellent…now carry that philosophy through to how you approach the implementation. An ERP implementation is going to touch to some extent every facet of your organization and has the potential to create chaos or bring efficiencies and opportunities that will have a profoundly positive impact on your organization. Do not underestimate this.

2. Plan, plan, plan

For every aspect of the project, have a plan that addresses issues head-on. For example, if your new ERP is going to deliver resource efficiencies, you must have an HR strategy in place and know how you want to handle the resource structure and the questions that are sure to come from employees who are fearing for their jobs. Fear of the unknown is one of the most toxic components of a failed implementation, so it’s critical to keep your employees informed throughout—and that requires a solid plan for every single piece of the project.

3. Focus On Your Organization’s Culture, Strengths, and Assets

We mentioned this at the beginning of this blog. What is “culture” when it comes to business, and why is it so important to factor into an implementation project? Your organizational culture is what you believe, how you operate, how you treat your employees and customers, how you approach things like quality. It’s based on your core values. Since each organization is unique, how your culture is expressed in an implementation project will be unique, but the important takeaway here is to use your culture as a measuring stick for how you’re approaching your implementation. It’s important to remember who you are and be consistent.

This also holds for your strengths and assets. Take time to assess these and figure out ways to utilize them in your implementation and change management plan. 

4. Unleash the Power of “Special Forces” 

There are people in every organization—whether in management or not—that are seen by employees as leaders. These individuals tend to be trusted by all. Either by how they operate or by the example they set, they motivate and instill pride in their coworkers. Be sure to involve these people wherever possible to help move your plans forward…they are a great asset that should not be wasted.  

5. Create a Coherent Environment with Clear Communication from the Start

“20% of the value of a business analysis [or change initiative] is the deliverable. 80% is in the discussions and how they open the minds of the people involved." The author of this statement is not known, but it is true. It is key to the success of any project—especially an ERP implementation—to create a coherent environment. Employees need to be very clear on what they need to do to make things happen—and any signal from anywhere needs to create coherence. Clear, consistent communication is critical from the start to create and maintain coherence. We recommend starting off right with an all-hands kick-off, where you explain to everyone the what, why, and how, introduce the ERP core team (internal and external), project expectations from each workgroup, and what to expect in the time ahead. 

6. Include the Right People

The ideal change management team should have multiple entities fully engaged, with a full understanding of the project and objectives, prepared to advocate, support, AND leading by example:

  • CEO and executive leadership
  • Middle management 
  • Front line supervisors and team members
  • Culture/change experts 

Everyone needs to demonstrate that they are interested in resolving root business issues by listening to the users who deal with the front line.

7. Don’t Forget Training

Training is a critical part of digital migration or implementation. ​You might already have a training protocol, but here are some recommended practices:
Mix things up and keep your learners’ interest by varying the content with videos, images, webinars, and more. 
Offer ways to participate rather than being a passive observer. People retain more when they are hands-on.
Less is more! Don’t overwhelm learners with too much information. 

8. Include Steps for How To Maintain Change

Along with training, it is vitally important—and often missed—to put processes in place to maintain the changes you have made. If you don’t, people are likely to slip back into what’s familiar and “safe”. Remember these points:

  • Put the human experience in the center of all processes​
  • Maintain active company leadership​, and keep your “special forces” in place as influencers and champions of change
  • Keep the pace by staying excited
  • Keep priorities in order and watch for competing tasks
  • Stay engaged by listening first, talking second
  • Remember that your employees won’t necessarily stop feeling anxiety right away, so keep them feeling secure by maintaining good communications
  • Champions. Natural Leaders and Influencers​
  • Define what success looks like and be ready to demonstrate it with data
  • Success. Define It and Show the Data​

With any process or tool, remember the S.M.A.R.T approach: ​

  • Specific​
  • Measurable​
  • Attainable​
  • Relevant​
  • Time-Bound​

Next Steps

There is a plethora of material on change management, and we encourage you to get educated so you can determine the best plan for your organization before you launch your next IT project, ERP or otherwise. Three that we suggest are: The Three Laws of Performance (Zaffron & Logan)​, Five Dysfunctions of a Team (Lencioni​), and The Ideal Team Player (Lencioni).​ 

If you’re getting ready to implement a Microsoft Dynamics 365 Business Central ERP system, learn more about business process analysis then contact the change management experts at ArcherPoint for help on how to start off on the right foot.