5 Best Practices of ERP Change Management

5 Best Practices of ERP Change Management

Have you ever considered how crucial change management is as a determinant of success in ERP implementation within enterprise technology? Harvard Business Review claims that companies with effective change management practices are 3.5x more likely to outperform industry peers.

ERP systems provide impressive business benefits if you know how to use them. However, achieving these benefits requires more than just technological proficiency; it demands effective change management strategies. 

Let’s quickly look at some ERP change management best practices to help organizations transcend the complexities of ERP implementation and optimize their outcomes.

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Key Takeaways:

What do experts say?

“In this cloud era, people issues appear to be one of – if not the – most critical factors of the success of an ERP implementation.” 

– Kathie Topel
(Director of Organizational Transformation at consulting firm Protiviti)

What is Change Management?

The Association of Change Management Professionals(ACMP) defines change management as “the practice of applying a structured approach to transition an organization from a current state to a future state in order to achieve expected benefits.”

Change management is what leaders, managers, and others do to ready and support employees to behave differently, such as implementing a new ERP system or making business wide changes like organizational restructuring.

ERP Change Management Best Practices

Here below are five practices that help not just manage but accelerate the implementation of ERP and the change management process as a whole:

#1. Make Change Management a Priority in ERP Implementation

Change management within an ERP implementation ensures that the process of transformation from the current state to the future state, facilitated by ERP, leads to acceptance, adoption and enthusiasm at all levels throughout an organization. Here’s why prioritizing change management is essential and how to achieve it effectively:

Acknowledge the Transformational Nature of ERP

  • ERP implementations, however, are more than mere introductions of new systems; instead, they represent a new way of operating business processes.
  • Realize that ERP implementations are a part of every aspect of the organization, from workflow to culture, and change management should be treated holistically.

Strategic Planning and Deliberate Execution

  • Change management in ERP implementation should be regarded as a strategic imperative, not a necessary evil.
  • Create an all-inclusive change management plan that is in sync with the global ERP implementation strategy.
  • Provide adequate resources such as time, budget and expertise to implement change management initiatives successfully.

Mitigate Risks and Minimize Disruptions

  • Appreciate that ERP deployments are fraught with risks and disruptions.
  • Seek out possible threats and come up with approaches to avoid them.
  • Engage in open dialogue with stakeholders on the expected effect of the ERP implementation and what the change management activities are trying to achieve to reduce disruptions.

Foster Employee Engagement and Ownership

  • Engage workers in the change management process at the beginning.
  • Ask for feedback, fix concerns, and provide chances for employees to participate in decision-making.
  • Develop ownership and responsibility among employees by explaining the advantages of ERP adoption at the level of functional roles as well as the organization.

Continuous Communication and Education

  • Create strong channels of communication to ensure that stakeholders are fully informed and engaged throughout the ERP implementation process.
  • Keep all updated on the project milestones, hurdles and achievements to ensure transparency and confidence.
  • Provide detailed training and support materials to arm the employees with the information and skill set required to thrive in the new ERP environment.

Measure, Evaluate, and Adapt

  • Create KPIs to measure the success of the change management activities.
  • Continuously track performance against the set KPIs and look for any feedback from the stakeholders on where improvements need to be made.
  • Be prepared to alter the change management approaches according to the changing requirements and the feedback from the organization.

#2. Ensure Leadership Buy-In

Active participation of senior leaders in the ERP implementation process creates a culture of dedication and urgency across the company. Here are some key points to consider when seeking leadership buy-in for ERP change management:

Lead by Example

Part of the role of the senior leaders in the successful implementation of the ERP project is to participate actively in planning meetings, communicate the vision, and support the Change. Their physical participation communicates a strong signal to the whole organization about the relevance of the project.

Communicate the Benefits

Leaders should be aware of the positive contributions of the ERP system and communicate this information to the rest of the organizational members. This is one of the most rewarding ERP change management best practices. Regardless of increased efficiency, better decision-making abilities, or better customer service, emphasizing the benefits of the ERP system effectively can win leaders’ support.

Address Concerns and Resistance

Leaders feel worried or have doubts about ERP implementation to some extent. The goal should be to handle these concerns openly and transparently, offering comfort and any information they may ask for. Further, the beginning recognition and elimination of resistance can avoid obstacles later in the process.

Align with Business Objectives: 

Leaders are usually targeted at strategic business goals. The articulation of the ERP implementation as in line with these objectives can help them sponsor it. Showing how the ERP system will help attain main objectives and generate business growth can help make it a priority for leaders.

Provide Training and Resources

Provide leaders with the required resources and training to comprehend their role deeply in the ERP implementation. These may take the form of training sessions, such as principles of change management, leadership communication workshops, and consultancy services of experts to help with the process.

Empower Leaders to Drive Change

Empower the leaders to own the ERP implementation within the respective departments or teams. Allowing them to initiate change initiatives allows you to use their influence and knowledge to push adoption and overcome resistance at the base level.

#3. Address Employee Fears and Concerns

Tackling employee fears and worries is a critical component of effective ERP change management. These fears are often the reasons why employees feel scared of changing to a new system. A proactive organization will effectively deal with these issues to have a proper and successful ERP implementation. Here are some key suggestions for effectively addressing employee fears and concerns:

Open Communication Channels

Creating open and transparent communication channels is necessary for resolving employee worries. Leaders should initiate platforms for employees to voice their fears and consult on the changes anticipated. Meetings, Q&A sessions, or periodic email or newsletter updates can ensure that employees are informed and engaged throughout the transition.

Provide Training and Support

Most employees are afraid that they may not be able to cope with the new ERP system or that their job roles may become obsolete. To remove these concerns, organizations should spend money on complete training programs that provide employees with the skills and knowledge needed to use the new system successfully. Furthermore, continued support and assistance during the transition can build the confidence of employees and reduce resistance to Change.

Highlight Benefits and Opportunities

Change is welcomed more by employees if they realize the advantages that they will get from it and to the organization as a whole. Leaders should articulate the potential benefits of the new ERP system in terms of greater efficiency, seamless processes, and better job prospects. Focusing on the favourable sides of the shift, companies can aid employees in perceiving the Change as a chance for development monitoring progress and not as a danger.

Address Job Security Concerns

Change usually causes some concerns regarding job security among employees. These concerns can be redressed by the leaders’ assurances that the organization will support the workforce throughout the transition. Clearly convey any changes to job roles or responsibilities and focus on employees’ role in the ERP implementation’s success. Besides, organizations should create channels through which such employees can express their concerns regarding job security and provide feedback and counsel to those who will be affected by the change.

Empower Employee Involvement

When the process of change is shared with the employees, some fears are also reduced, and the employees feel more like the owners of the Change. Empower staff to take part in the change process and decision-making, request their opinion on the new ERP system, and engage them in training and implementation activities. The organizations enable the employees to participate in the process of Change. In this way, the employees are likely to feel included and to work together, which will result in the acceptance of a new system.

#4. Reflect on Past Successes and Failures

Change management approaches differ depending on the goals of the business and the culture. Nevertheless, one of the most important elements that are often neglected is the consideration of the previous change experiences within the organization. Having both achievements and failures in mind, leaders can obtain useful information on what to do in their adjustment to ERP change management. Here are key points to consider: 

Assessing Change Resilience

  • Assess the organization’s reaction to prior changes. What was the speed of adaptation, and was there workforce resistance?
  • Determine factors that lead to successful change initiatives and those that pose an obstacle.
  • Assess the general readiness of the organization to change using past experiences.

Learning from Mistakes

  • Assess the past failures to determine what occurred and why.
  • Spot typical mistakes or problems faced during earlier change initiatives.
  • Utilize failure as an insight tool to prevent making the same errors in the ERP implementation process.

Leveraging Success Stories

  • Emphasize success stories where the organization handled change well and achieved favourable results.
  • Recognize the best practices and strategies that were part of successful change initiatives.
  • Share success stories to create confidence and promote a sense of motivation in all the stakeholders during the ERP implementation.

Tailoring Strategies to Fit the Organizational Context

  • Appreciate that what happened to one change initiative may not be what happens to another.
  • Tailor change management approaches depending on the organization’s specific culture, structure, and historical happenings.
  • Integrate the findings of past successes and failures in the ERP implementation into the creation of a custom change management plan that would help in the process.

Building Change Resilience

  • Leverage old experiences for resilience and adaptability development inside the organization.
  • Create a culture that is Change and continuous improvement-oriented.
  • Promote open communication and honesty to resolve worries and help the process go smoothly.

Engaging Stakeholders

  • Engage the major stakeholders in discussions about past change experiences.
  • Seek the opinion and feedback of employees who have experienced previous change initiatives.
  • Promote a collaborative way of change management utilizing collective knowledge and thoughts.

#5. Customize Best Practices

ERP change management is not one size fits all. Every organization has its own culture, structure and set of problems. Consequently, it is important to tailor best practices to the unique needs and other circumstances of the organization. Here’s how to effectively customize best practices for ERP change management: 

Understand Organizational Dynamics:

Prior to tailoring any change management method, it is critical to comprehend the organization’s dynamics completely. This spans the company’s culture, values, communication styles, and existing change management processes, among others. Interviewing stakeholders through surveys as well as workshops may provide the organization with valuable information related to the stage when it comes to using effective change management strategies and identifying areas of extra attention.

Tailor Communication Strategies

One very important thing to the successful management of change is clear and consistent communication. However, not all communication strategies will appeal to every group of stakeholders. Tailor communication strategies to factors such as preferences of the audience, language proficiency, and level of technical expertise. Employ diverse communication channels, such as emails, meetings, intranet portals, and social media, in order to facilitate effective communication among all stakeholders.

Adapt Training Programs:

The need to be trained is that employees are given the necessary skill and knowledge on how to use the new ERP system successfully. Nevertheless, generic training programs do not target particular requirements in different user groups in the organization. Tailor training programs according to variables like job roles, learning styles, and prior experience in existing business processes and ERP systems.

Engage Change Champions:

Spot and enable change champions within the organization who will act as proponents of ERP implementation. They are the people who can ensure the successful adoption of the RIECA, address the concerns, and provide peer support to their counterparts. Personalize the role of change champions with their expertise, influence, and readiness to back up the change initiative. Equip them with the right kind of training, resources, and appreciation to play their roles as change agents effectively.

Continuously Evaluate and Adjust:

Change management is not an event but a process. Always systemically assess the efficiency of custom-made, ready-to-use best practices and be ready to modify them in compliance with the responses and changes in the organizations. Regularly prompt feedback from the key stakeholders beforehand, monitor the KPIs and conduct post-implementation reviews to find areas for improvement and refinement.

Planning and Implementation of ERP Change With Onboard

Onboard specializes in helping businesses navigate the challenging process of ERP change management, making the transition from existing processes seamless, and ensuring that the new system is optimally used. Our approach is structured around three key stages: 

Step One: ERP Change Preparation

Change preparation is the base for success. It requires a thorough investigation of the organizational, project and personal effects that the initiative will have. We closely collaborate with your team at Onboard to create and document a tailored and flexible Change Management Strategy. This approach to ERP acts as an itinerary for acquiring the required sponsorship and commitment to facilitate the targeted benefits of ERP implementation.

Step Two: ERP Change Adoption

Adopting ERP Change is the second phase that intends to instil the use and adoption across the entire organization. Onboard creates, executes and oversees a range of engaging activities and people-based training deliverables that drive adoption. We work together to monitor, evaluate and adjust these materials as needed on an ongoing basis in order to respond to the dynamic needs of your workforce.

Step Three: ERP Change maintenance

The stage, Maintaining Change, is designed to guarantee that the ERP initiative’s benefits will remain. Onboard continues to support post ERP go-live, celebrating successes, identifying opportunities for improvement, and enabling teams to sustain the change confidently in the future. We aim to create sustainable levels of usage and adoption, allowing your business to achieve the maximum potential of its ERP investment.

Why Choose Onboard?

Onboard stands out as the world’s most experienced ERP training and change management consultancy for several reasons:

Tailored Solutions: We develop a range of tailored and competitive ERP training and change solutions to your specific build and business processes.

Vast Experience: Our team has practical experience in more than 750 ERP training projects in diverse systems and industries, thus providing unmatched expertise in each engagement.

Flexibility: We offer maximum flexibility when deciding on the modules that will be developed in-house and those to be outsourced to Onboard. When it comes to delivering the training sessions, we can also either deliver the training, support by upskilling your internal team or neither.

Quick Offboarding: ERP project timelines regularly slip, but our unmatched offboarding policy ensure our team is ready to off board and onboard at your convenience.

Project Team Focus: Using Onboard as a partner gives the project management team more time to focus on the system build and ensure that the workforce is being prepared for the change.

Onboard delivers detailed ERP training and change solutions that allow enterprises to overcome the challenges of digital transformation. Our personalized ERP change strategies enables organizations to get the maximum return on investment in their ERP systems while applying the new technologies easily and effectively.

Common Questions about Best Practices for ERP Change Management.

Q1. What is the importance of change management for ERP implementation?

Change management helps facilitate the adoption of new systems, which minimizes resistance and ensures that the organization derives maximum benefits.

Q2. What are the core challenges to ERP change management?

Challenges comprise employee opposition, hindrances to operations and lack of leadership backing or communication.

Q3. How can organizations avoid resistance to ERP change?

Transparency, comprehensive training programs, and emphasis on rewards may reduce resistance from employees.

Q4. What is the function employees perform in ERP change management?

Employees are the pillars of success, which means that they should be engaged, get buy-in, and receive support to make a successful and smooth transition here.

Q5. What are the measures of change management effectiveness for organizations?

Tracking adoption rates, user adoption, employee satisfaction, productivity, and business outcomes will help organizations measure success.

Sources: 

Joanne Harrison
Joanne Harrison
Director of Sales

Joanne has worked for Onboard’s parent company Optimum since it was established back in 1998 and has progressed through the organization to Director of Sales. She has overall responsibility for business development and leading the growth of the company. Her role is to expand the value proposition to our clients and target markets, identify new markets, implement strategic partnerships and build valuable relationships with existing clients and system partners.

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