Change Management in ERP Implementation

Change Management in ERP Implementation

Changing With the Times: All in all, an ERP selection is a chance for a manufacturer to “change with the times” and apply the needed resources for the implementation to make lasting business change.

When looking at ERP and change management, the goal is to eliminate waste, improve productivity, optimize existing resources, handle growth without adding resources, and streamline existing operations. A company can’t expect the ERP vendor to take on this responsibility. The right approach to the team, the resources, and organizational commitment helps insure that staff can function as “change agents” within the company as opposed to those that block or resist.

ERP consultants are often asked to explain what organizational change management (OCM) is and how it relates to enterprise software initiatives. In short, organizational change management is the practice of shepherding and supporting individuals through a transformative operational change.

Because an Odoo implementation affects, in some way or another, nearly every staff member of a company, an organizational change management plan must make provisions for every staff member. A solid strategy also takes into account external stakeholders — the vendors, customers, suppliers, shareholders and others who work with or provide support to the company. Similar to employees, these individuals need to know what’s happening, why it’s happening and what the short-term and long-term effects of it will be.

ERP are made to flexibilize the enterprise and the management of the internal processes. 

Enterprise Resource Planning (ERP) refers to integrated software solutions that automate and simplify business processes within an organization. ERP not only helps automate processes but also serves as a means to enhance business efficiency and effectiveness. Implementing ERP solutions goes beyond a mere technical upgrade; it involves changes to an organization’s mission and operational layers, making it closely related to organizational change.

ERP and Change: How They're Connected

ERP systems often incorporate Best Practices that reflect the business models of top-performing organizations. These best practices are built into the ERP solution as workflows and logic, designed to help businesses align with world-class processes.

When an organization adopts an ERP system, it essentially integrates these business reference models into their operations, which often entails:

- Implementing new business processes and practices
- Employees needing to adapt to these new processes, which requires changes in their work habits

As a result, ERP implementation inevitably leads to organizational change, affecting both business processes and employee behavior.

Areas Affected by Change

The change starts with business processes, which include:

- New methods for performing tasks and functions
- A shift in employee attitudes towards organizational responsibilities
- Bridging the gaps between old habits and new processes

In many instances, existing practices must be adjusted or replaced to align with the functionalities and best practices of the ERP system.

Change Management in ERP Implementation

To effectively implement ERP, businesses require a comprehensive Change Management Plan. This plan should outline a clear roadmap that addresses the gaps between the current (As Is) and desired (To Be) states. The change management plan should aim to provide the most efficient path to transformation, taking into account time, cost, and geographical considerations.

Key components of a Change Management Plan include: 

Executive Buy-in 

• It’s crucial to secure leadership support across all offices and regions. Without this buy-in, the chances of an ERP project succeeding are slim.

Cultural Considerations

• Take into account language, education, and demographic differences that influence how employees view ERP goals, objectives, risks, and benefits.

Employee Engagement

• Perform organizational readiness assessments to identify issues and opportunities throughout the enterprise. Engaging employees is vital for ensuring long-term advantages.

Communications

• Create a communication plan that includes regular updates from managers during team meetings. Be mindful of language, cultural nuances, and education levels when conveying messages to employees.

Training

• A robust training strategy is key to helping employees adapt to the new ERP system. Consider local variations, conduct testing before going live, and identify super-users and trainers to provide support. 

ERP Change Management Tasks for Specific Modules

It’s essential to recognize that Change Management tasks differ based on the specific ERP module being implemented. For instance, the change management activities for modules like Purchasing or HRMS will vary due to the distinct tasks performed by employees in each department. Customizing change management efforts for specific modules leads to a smoother transition for employees and enhances the overall success of the implementation process.