Change Management Strategies for an ERP Project

Change Management Strategies for an ERP Project

Ever wondered how a company can effectively navigate the complexities of implementing a new ERP system to bring about lasting change across its entire organization? Suppose you want to ensure that your new system (which will affect your entire organizational structure and its business operations, no matter how big or little) is accepted, implemented, and sustained. In that case, you have to focus on organizational change management.

In today’s corporate world, with an ERP system, you can streamline procedures and improve data centralization by combining multiple critical company operations into a single, all-inclusive system. This integration, which covers vital areas like finance, HR, procurement, and supply chain management, is essential for companies looking to increase operational efficiency.

In addition to CRM (Customer Relationship Management), 53% of IT decision-makers surveyed stated that ERP was an investment priority. The global ERP software market, which was valued at $35.81 billion in 2018, is projected to increase at a compound annual growth rate (CAGR) of 10.2% to reach $117.09 billion by 2030, according to a report released byAllied Market Research.

When introducing a new ERP system, like Microsoft Dynamics 365, change management is essential. The ERP system is complicated, but with careful planning and the correct change management techniques, you can reduce interruption and guarantee a more seamless transfer.

Key Takeaways:

  • Why is Change Management Important in ERP Implementation?
  • The Top ERP Change Management Best Practices 
  • Streamline ERP Change Management With Onboard
  • Common Questions on Change Management in ERP Implementation

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Why is Change Management Important in ERP Implementation?

Successful change management is crucial in the ERP implementation process. Successful businesses thrive not only through digital transformation but also through developing agile and design thinking cultures, which enable them to understand their customers better, react quickly to changing market conditions, encourage innovation, foster a culture of teamwork, optimize resources, and become competitive in the marketplace. 

When it comes to ERP installation, change management uses a structured strategy to identify change champions to help people and organizations make the switch from old to new yet familiar processes. It guarantees that the company is prepared to accept the modifications brought about by the new ERP system.

What do experts say?

“Experience shows that the greater employee involvement in the change, the greater the positive response in understanding the compelling need for the change and the sharing of the vision.”

-David K. Carr, Kelvin J. Hard, William J. Trahant.
Coopers & Lybrand Center of Excellence for Change Management

Here is why change management is so important:

Establishing User Acceptance

An ERP system is only beneficial if staff members utilize it efficiently. Through active staff involvement in the change and implementation process, change management assists organizations in achieving higher rates of user adoption. Change management also raises the possibility of effective user adoption by guaranteeing that staff members receive sufficienttraining and assistance for the new system.

Additionally, it facilitates acceptance and buy-in from end users by addressing issues, offering hands-on training, and requesting feedback. This results in a smooth transition and higher system utilization.

Efficiency in Communication

The foundation of effective ERP and change management is clear and consistent communication. Employee engagement and accountability are improved by open and honest communication. Ensuring that all engaging stakeholders, including employees, management, legacy systems, and key decision-makers, are aware of the changes, understand the consequences, and feel heard throughout the process is based on having clear, consistent, and effective communication.  

Reducing Resistance and Disruption

Users and employees adapt or object to the process changes brought about by the adoption of a new ERP system. By involving people early on, talking through the problem statement, regarding employee concerns, hearing their viewpoints, and properly conveying the modifications, ERP change management helps reduce resistance.

Implementing an ERP system may interfere with daily operations and result in decreased efficiency. By scheduling the implementation at a time that will have the least negative impact on the business, change management techniques help to minimize interruptions. One way to lessen disruptions is to introduce the ERP system during a slower time of year. 

Maximizing ROI

ERP systems have many advantages, such as more efficient procedures, better data visibility, and better decision-making.  By ensuring that staff members are aware of these advantages and have the skills and knowledge needed to utilize the system fully, ERP change management helps to maximize return on investment.

Manage Expectations and Organizational Change

Throughout the ERP installation process, change management controls expectations and promotes efficient and consistent communication among key stakeholders. You can create a more positive and supportive environment for employees during a transition by first addressing the concerns of employees, addressing employee concerns and uncertainties, and developing trust by providing accurate and timely information.

ERP projects focus on the system’s long-term success as well as the go-live date. The goal of change management is to make sure that the modifications made by the ERP system become the new norm. It supports the development of a culture that embraces innovation and constant continuous improvement. When a structured approach is adopted, ERP and change management are guaranteed to be compatible with the long-term goals and key strategies of the company.

Training and Support

For the ERP system to be used efficiently, employees frequently need to pick up new skills and expertise. The staff will be adequately trained to operate the ERP system thanks to ERP change management best practices for these training requirements. Training courses specifically designed for various user focus groups help bridge the knowledge gap between the comprehensive system and existing business processes and increase trust in the new ERP system.

Taking Help from Training Experts

Organizations are often overburdened, which is a major factor in why so many choose not to implement one of these ERP change management best practices in complex processes. While staff members take on future projects, successful ERP implementations can drag on for months and disrupt daily operations. Many classroom training platforms like Onboard provide customized ERP training programs for users.    

The Top ERP Change Management Best Practices 

Every project has a learning curve, but large-scale changes like the installation of a new ERP software have more learning curves than others. Change management can cause major performance drops in the absence of adequate planning, comprehensive training programs, and support, which irritates management teams, leadership teams, and individual contributors equally (who are typically persuaded that a new system is the solution to all of their issues rather than the beginning of a new set of ones).

Here are the best practices of ERP Change Management for organizations: 

Give Change Management Top Priority

Effective change management requires careful planning and execution, particularly for a large-scale project milestone like the deployment of an ERP system. There are lots of mishaps that can cost time, financial resources, and careers while introducing change management in your company. Thus, one of the best for a successful ERP implementation success change management practices is to treat it as a priority when introduced with proper management and efforts.

Keep Important Project Stakeholders in the Loop and Keep them Involved

Early stakeholder engagement is one of the most important parts of change management. All parties impacted by the new system, such as vendors, customers, and workers, are considered stakeholders.  Early involvement of key stakeholders guarantees that all parties are aware of the change and why it is needed. 

Town hall meetings, newsletters, and training sessions are some ways to accomplish this. When management and leadership share your vision, they may support your ideas and encourage the rest of the organization to join and remain on board as well. 

Analyze the ERP Project’s Impact

No matter how big the business is, a new ERP system impacts the entire organization. It’s still a new system even if you’re “lifting” and “shifting” to a new version of the software, and it appears the same. 

Naturally, learning takes time, and the deployment of your ERP won’t happen quickly, either. To make sure the system is properly established, everyone, from the leadership down, will need to go through a learning curve. After that, they’ll need to go through another learning curve to figure out how to make the most of the new software.   

You need to think about –

  • How will these changes affect your end customers?
  • What effects might it have on the regular duties and tasks of your employees?
  • In what ways could it alter their role? 

The business will also be impacted by the initiative as a whole. For example, resources may be outsourced to the project, requiring the reallocation of other resources to compensate. As company leaders, you need to look into the detailed overview of the ERP project communication plan to make it all successful for your company and involve employees, too. 

Establish a Well-Organized and Smooth Transition Plan

Creating a strategy is yet another essential change management tactic. This goes beyond the timetable for implementing your ERP system. A change journey relies on the mindset of the stakeholders before the change management, the way you want them to feel, think, and behave, any possible obstacles that can arise and your plans to overcome them, any activity to keep them engaged, and many more. Thus, change points, expectations, and direction may all be found and managed with the help of a smooth transition plan. 

Thus, taking the time to document how to work on the project milestones and the desired future state of the project is done today by reviewing current business processes and procedures and recognizing and recording the steps that will be taken to complete the work after implementation should be the concern of company leaders.

Offer Adequate Training

Whenever a new ERP system is implemented, training is important. With the right training, staff members can operate the new system, which will boost their productivity and cause them to be happier. Ensure that every employee utilizing the system has received the necessary training. This can be accomplished by holding training events, providing training materials, or providing online courses. 

Before going ahead with ERP, a comprehensive training strategy should take into account local characteristics, locations, and testing. Effective training equips staff members with the knowledge and abilities to adjust to the new workflows and business processes that come with the ERP, going beyond simply teaching them how to operate the new system. 

Thus, training needs to be thorough, covering not just the features of the ERP system but also how it interacts with and modifies current business procedures. 

Observing and Evaluating Change

It is essential to keep an eye on developments and deal with problems as they come up. There can be opposition to the new system, and change can be difficult. For an ERP software installation to remain on course and produce the desired results, continuous monitoring and assessing change is crucial. 

Several techniques, like establishing specific, measurable goals and benchmarks from the start of the project, can be used in this process to measure the impact and monitor the progress of the changes that are being made. 

Timelines for completing different phases of the communication plan deployment, user adoption rates, performance enhancements, user acceptance testing, and employee feedback are a few examples of the KPIs that the company leaders have to look into.

It’s also critical to monitor the less obvious technical aspects of the change management strategy, such as employee engagement and mood, using user manuals, questionnaires, and casual talks. This can reveal significant insights into how the change management training plan is seen and felt on the ground.

Streamline ERP Change Management With Onboard

When you implement an ERP solution in your organization, opposition will inevitably arise since it represents change. Your ERP project will be more productive and efficient if you take a comprehensive strategy and connect people, existing processes, and systems. Encouraging the workforce to thrive in the reorganized organization is a key component of effective change management strategies for ERP projects.  

Managing change during ERP adoption is a complex process that involves much more than the technical rollout of a new system. The process of putting ERP systems into place involves both technological advancement and handling the human side of change.

Thus, partner with Onboard to create specialized ERP training development programs for your employees to train them through thorough assessments, implementing effective communication strategies and robust training and support systems, and make them well aware to understand the impact of change on both a psychological and operational level by designing change management strategies. For more information, please get in touch with us. 

Common Questions on Change Management in ERP Implementation

Q1. What are some ERP rollout techniques?

Some ERP rollout techniques are phased rollout based on business unit, business priority, geography, and module, pilot rollout and parallel rollout, and SaaS rollout.

Q2. Give an instance of a successful ERP installation.

PANDORA, a leading jewelry company, partnered with Onboard for Microsoft Dynamics ERP training. Implementing the ERP system facilitated its ambitious expansion plans. It aimed to establish three new production facilities in Thailand by 2020. This streamlined operations, enhanced collaboration, and supported PANDORA’s growth trajectory and workforce increase from 18,500 to 28,500 employees.

Q3. How does leadership fit into change management in ERP implementation?

In the field of change management, leadership is vital. Setting an example for others to follow, communicating the need for change, offering guidance and support, and modeling the ideal behaviors are all crucial. 

Q4. In what ways can organizations reduce resistance to change?

By including workers in the change process, explaining the changes and their advantages, offering assistance and training, and responding to any worries or inquiries from staff members, organizations can lessen resistance to change. 

Q5. What is change failure?

Change failure occurs when efforts to improve existing corporate processes fail to avail the expected benefits. It also happens when plans, projects, or tactics fall short of or fail to produce the expected outcomes. Change failure can be caused by poor planning, inadequate support from senior management, and insufficient resources.    

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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