Creating a winning ERP change strategy
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The document discusses creating a winning strategy for enterprise resource planning (ERP) change. It notes that ERP changes like mergers, acquisitions, or replacing outdated systems can be challenging due to employee resistance to change and loss of efficiency during the transition. It recommends clarifying the goals and timeline of the change, managing stakeholder expectations, providing training and support for employees, and using tools like documentation repositories and project management software to help employees adapt to and adopt the new ERP system. The key to a successful ERP change strategy is having a clear business case, rigorous project management, leadership to guide the transition, and efforts to reduce employees' fears about the changes.
Creating a winning ERP change strategy
- 1. Creating a winning ERP Change Strategy Paul J Siegenthaler 24th September 2014
- 2. ERP Change Paul J Siegenthaler 24th September 2014
- 3. How tough will the journey be ? • How wide is the gap between today and the end-state? Old / ineffective ERP needs replacing No ERP to support end-to-end processes Merger, acquisition or carve out
- 4. How tough will the journey be ? • How wide is the gap between today and the end-state? Old / ineffective ERP needs replacing No ERP to support end-to-end processes Merger, acquisition or carve out • Company X (£ 250m) acquires a £ 150m business • That business is part of a €14 billion conglomerate • Acquired business is dependent on conglomerate’s ERP • Conglomerate supplies IT services during transition • Need to extricate from conglomerate in 3 – 12 months • How can one manage that change?
- 5. Attitudes towards change … • Most people are afraid of change and are likely to resist it agree disagree • I am afraid of change and am likely to resist it agree disagree
- 6. Understanding the fear of change • Modern myth: “ROUTINE IS BORING” – Therefore people should like change – Change = novelty, variety, excitement • But what is our instinct as superior mammals? • Routine saves us – It’s safe, day after day – Automate regular daily tasks – Free up brain processing ‘bandwidth’ • Fear saves us – Minimises risk – Keeps us out of trouble
- 7. We are programmed to survive • Change is scary • Most people won’t admit they are scared • Risk of not noticing the early signs of resistance However … • People can overcome fear for their survival • … but is there an immediate threat ? • Why do we need to change now ?
- 8. What this means for an ERP change • Simultaneous change for all is more challenging than one new member is a knowledgeable team – “There’s so much new stuff to learn!” – “Who can explain and show me?” – “Will I annoy them with my repeated questions?” Structured training programme Super-users (humans!) Contextual help • Temporary loss of efficiency – Pride and self-worth from being fast and accurate – Slower and some mistakes at first during the learning curve – Worse feeling for team managers – Adjust expectations, set-up small discussion groups
- 9. ERP change in mergers, acquisitions and carve-outs • Clarify the start and end points (“from – to”) – Processes – Systems architecture – Applications landscape • Who from the other side will help you? – How important are you to them? – Calibre – Knowledge • Clarify the transition – Transition services agreements (TSAs) – Service levels – Cost and compensation
- 10. Risk management and contingency planning • It’s basic stuff, and yet seldom honest or realistic – Risks documented but not actively managed – Some risks will inevitable materialize – The sum of impacts x likelihood should be included in the budget (contingency) or deducted from the benefits case. – That number is usually higher than the traditional 10% contingency • The unimaginable can happen! – Include more contingency than the value of the risk map
- 11. Coping with change Managing change Leading change” • Explain what and why – Visualise the end-point – Explain the options and their consequences • Manage expectations – Effort from all, not just I.T. – Long preparation for all (e.g. data cleansing) • Language and relevance – Different impacts on different functions • Create involvement and sense of urgency – Feedback in small groups – Maintain pace (short term milestones) – Many change agents, not just the boss!
- 12. Using technology to support change • Collaborative tools : sharing across teams and geographies – Document repository (SharePoint, DropBox …) – Programme management software (with workflow) – Can everyone access these tools? • Training – Process and system use – Realism of training environment – Repeatability (beyond initial cut-over) – Simultaneous training across geographies (not reliant on “train the trainer”)
- 13. In summary … • Creating a winning ERP change strategy • “Winning” ≠ “perfect” (you will never get it 100% perfect!) But the following will get you to the “winning” stage: • Clarity of purpose and self-evident business case • Rigorous programme management • Management of expectations • Stakeholder management (champions and resistors) • Strong and coherent leadership • Create “traction” – Don’t shove it, be supportive, help them! – Reduce fear of the unknown – Communicate, visualize the end-point
- 14. Any questions or other experiences? Let’s discuss!
- 15. Thank you ! Paul J Siegenthaler 24th September 2014