Change Management

Change Management is a planned approach to change within an organization. The objective

is to maximize the benefits for the organization and lower the potential risk associated with
any ERP solution changes. These changes are either reactive, which is caused by external
source, or proactive, which is a goal oriented change. A huge aspect of integrating any new
ERP technologies is human-based. There are psychological aspects of any change, such as
resistance, that many people go through. Any effective change management touches on all
these aspects within an organization. The key process of change management begins by
measuring attitudinal changes as the process of ERP implementation begins which is not just
recording how people feel about the changes anticipated in technology implementation of the
business processes that is primarily focused on the automation over a period of time and how
to manage the shift in their expectations. This requires a communication as well as a training
process.

Organizational Change Management Focus Areas

The key areas on which the organization needs to focus on to handle the process of change
management are:

 Business process management and improvement

 ERP organizational assessment, change, design and support

 ERP performance measurement and optimization

 Training needs analyses and content development

 Training delivery and follow-up

 Communications planning and execution

 Business case design and implementation

 Post-implementation audit to track and report progress vs. the business case

 Obstacle identification and solution implementation

 Process and organizational enhancements designed to fully optimize new enterprise

technologies

Why Change is required with ERP?

Enterprise Resource Planning is not only a technology that automates the processes of the
organizations but is a solution to run the business more efficient and beneficial. That means
implementing a world class Enterprise Resource Planning involves not only with changes in
the technical layer of the organization but also changes in the mission layer of the
organization. This happens mainly due to the Best Practices which Enterprise Resource
Planning solutions offer. Best Practices refer to the business models which are stored as work
flow engine and the logic of programs in ERP package. Such models are made thorough
benchmarking from the practices and business processes of the world class organizations and
excellent enterprises. So when an organization uses such ERP solutions, in fact it employs
these Business reference models. Thus, Enterprise Resource Planning implementation is
equivalent to running the business as per new processes and practices. On the other hand the
employees of the organization should change to work on a new practice. This exposes why
ERP is tied with change in the organization and organizational change must be considered as
a consequence of such Enterprise Resource Planning implementation. The change as told
begins from the business processes. This includes new way of doing works and functions to
run the business. Furthermore change in the attitude to the organization tasks might become
necessary if the current habits of doing tasks have significant gaps with the new processes.

For a very simple example if the employees currently are doing their dedicated tasks
separately in their defined boundaries they must change to work on the basis of an
interlocked chain of the tasks called business processes. This is due to the primary feature of
any Enterprise Resource Planning which is process oriented. This obviously needs a change
in the attitude and behaviour of the organization people from a task oriented approach to
process oriented approach. People concentration in such integrated business must move from
focusing on their separate jobs not being worried about the other parts, to taking care of the
entire process and do what all they can to accomplish the entire process perfect. Furthermore,
process integration also must happen. The business processes themselves are in relation
together and each process might trigger other processes to be launched. In this way team
working also makes sense and will get in to the scope. In fact teams are to be formed around
the business processes. Team work needs improvements in the horizontal relationships
between employees and enhancements in their communication abilities. We can see how
principle concepts of ERP involve wide changes in the people side of the enterprise. New
business processes consequences with new organizational roles and jobs descriptions for the
employees. It may cause some changes in organizational chart due to adoption to the new
processes and job definitions. In addition the technology also is being changed. The reports
and data forms of ERP make differences in the ways of data movement as well as reporting in
the organization. On line access to required data for any employee and computerized data
flow requires the people to change from paper based working to use the automated data. Trust
to mechanized data is not so easy for the people who have been working in a paper based
organization for a long time. This exactly needs change in habits and attitudes. Managers also
must get used to take managerial reports from the system and spend their time for analyzing
information.

Implementing and utilizing a world class ERP solution is tightly associated with managing
people side of change. In fact even if we setup ERP applications correctly but the people side
of change does not happen the company will not be working on the ERP practices and so it
will not gain the expected benefits. Furthermore, Enterprise Resource Planning
implementation regardless of changing the employees can cause stoppage in the business. If
we look at the failure stories we can see that many of ERP implementations are failed after
the software implementation, due to organization was not capable to perform as per the ERP
business processes and its necessities. In the other world the employees did not adopted with
these new practices. The major reason is lack of a Change Management program. Indeed
implementing an ERP solution in addition to a technical project management needs a people
side of Change Management program. This Change Management will have its own scenario,
activities and responsible. The goal of the Change Management project is to make the people
ready for change and conduct them to move to the new environment and map them to the
new way of running business.

Activities involved in Change Management

 Defining and installing new values, attitudes, norms, and behaviours within an
organization that support new ways of doing work and overcome resistance to change
 Building consensus among customers and stakeholders on specific changes designed
to better meet their needs
 Planning, testing, and implementing all aspects of the transition from one
organizational structure or business process to another. 

Implementing an ERP will bring in changes to the way people work within the organization,
processes will change and there may be job cuts and rationalization of responsibilities within
departments. All this will definitely evoke resistance from the employees and this has to be
managed effectively before, during and after the implementation of the ERP package. Top
management has to lead the way in propagating the reasons for the implementation and the
business benefits that can be expected by implementing a new ERP package. A strong change
management team needs to be involved to approve, implement and track the changes in the
organization, which includes the impact and detailed structure (i.e. documentation) associated
with the life cycle of the ERP project.

Addressing the change management

An organization needs to develop a planned approach to prepare itself for the challenges it
will face. The objective here is to maximize the collective efforts of all people involved in the
change and to minimize the risk of failure of implementing the changes related to the ERP
implementation.
The implementation of ERP will most surely come with many changes and an organization
can expect many natural reactions, i.e. denial, to these changes. To fight this, it is most
important to create a solid project team dedicated to change management and to communicate
the solution vision and goals of this team. This team should be prepared to handle the many
change issues that come from various sources like:

 End-user requests
  Operations
 Data center team
 DBA group
 Systems management

References

 Change management strategies for successful ERP implementation by Adel M.

Aladwani

 http://panorama-consulting.com