How you select new enterprise resource planning (ERP) software will greatly affect your company’s future and should not be taken lightly. Therefore, in order to avoid unpleasant surprises or failure, you should start thinking about change management at the same moment that you start considering replacing your old or buying new ERP software. Do not wait until there’s no turning back. Remember: prevention is better than a cure.
This is the first of a series of four blog posts in which I intend to describe how change management can affect a company’s ERP software selection project.
Part 1 (Introduction): I will describe the challenges a company faces when managing the change caused by the replacement of its ERP system.
Part 2 (The Change): I will show the difference between general change in a company (e.g., management team, moving to new offices, etc.) and change during an ERP selection process.
Part 3 (The Management): I will describe the different methods and tools used to manage change during an ERP selection project.
Part 4 (Conclusion): I will provide a plan that companies can use when managing change during an ERP selection process.
Change Management Challenges that Companies Face during ERP Software Selection
Probably one of the most important challenges is internal communication. Even before starting the selection process, all parties involved should know what is going to happen and why the decision to buy or replace the current ERP software was made. The decision to replace the existing ERP solution should be discussed with the employees. Of course, in companies with hundreds of users, the chief information officer (CIO) or chief technical officer (CTO) will not speak to all of them; but there are other ways to find out what they think by using surveys, polls, etc.
After the decision to replace the system is made, the next challenge is to define a strategy that will make the selection and implementation process as painless as possible (i.e. a plan of action to accomplish a specific goal). It doesn’t have to be very detailed, but it should contain the risks faced during the implementation process and the ways to deal with them. No matter what vendors tell you, there is no project with zero risk.
Now that you have created a strategy, you will need to find people who can implement it. No matter the size of the project, you will need to create a team for the ERP selection project, made of people from different levels and different departments and led by a project manager whose main task is to supervise all actions related to the project. When building the team, try to select people who will be willing and available to work on the project (do not take very busy people or employees that are likely to leave the company).
No matter who makes the decision that leads to an ERP selection, or who manages the project, all the employees in the company will be affected. Therefore, everyone should be involved and allowed to contribute. In order for that to happen, transparency is extremely important because people cannot get involved if they don’t know what’s going on. All employees (from users to top managers) should know what’s going on and have the opportunity to give their feedback on the project.
Another important challenge is external communication with software vendors, consultants, or companies offering software selection services. If you’ve already addressed the challenges mentioned above, it will be much easier to work with vendors, consultants, or software selection companies.
Please remember that these challenges are related to change management for an ERP selection project. Ideally, these challenges should be addressed before you start the selection process, and not along the way.
In my next blog on change management, I will define change and describe what makes it such an important issue during an ERP selection process. In the meantime, please let me know what your thoughts are on change management and on this blog post.
Thanks for preliminary insight of a very burning issue which is faced by every company involved in ERP implementation. The success of an ERP lies with how flexible it is to adapt to the company’s existing standard practices, support from top management and a very effective communication strategy.
Really topic is very much hot issue the the input what ever mention is very good.
My sincere appreciation for giving insight into a subject that often get ignored an neglected. I normally like to follow the Thinking process - ie. where I start by clarifying the goals of the system through an Intermediate Objecte map - getting the key players to agree on the key CSF (Critical Success Factors) and then defining the the NC (Necessary Conditions) for achieving the CSF. This then becomes the outline of the project plan. Next step will then be to map the CRT (Current Reality tree) of the comapny.
Nice post. Look forward to the next articles.
Right on time for me, i just start the process for an ERP change. Waiting for the next blog.
Good but very general &obvious so needs to be more specific
Ple Send the ERP Deatils & Cost of Software.
a very good article. i m currently impleting an erp system and one of my main hurdles is people not willing to change. a main problem can be that of top level managers having problems using a new system and these people are quite ademant that a new improved system will just not work. common excuses i get is that, i dont understand the system and why should i do this or that.
waiting impatitently for your next blog
Thank you all for your comments!
@ali It is general, but unfortunately not obvious for everyone, since there are so many failed implementations.
Generalistic view and anyone implementing an ERP system should take an holistic view on initially what to change and when ie. are there opportunities to change business processes or does the ERP system need to match existing processes ?