ERP Insights from Ultra Consultants
By Dave Lechleitner
Implementing a new ERP system offers a rare opportunity to transform your manufacturing organization by increasing efficiency, enabling new capabilities and improving business performance. But, while a modern ERP solution can supercharge your organization, its implementation is one of the most complex and high-risk projects your organization will ever undertake.
Of all the possible errors you can make, poorly executed change management (or none) is perhaps the most avoidable cause of project problems and failure. Resistance to change, even positive change, is normal and expected human behavior – and plans must be made to minimize its impact.
It’s important to understand that change management is not a discrete phase of implementation. Instead, it should be woven throughout the project, embedded in the methodology and infused in the project team culture.
Looking closer, here are seven change management strategies designed to support and enable a successful ERP implementation:
1: Develop and share the vision
Determine what your post-implementation organization will look like, and how it will run – and then share it with the organization.
Every manufacturer expects a new ERP solution to “transform” their business. But what exactly does that mean? Developing the desired future state – and then communicating it throughout the organization – is key to successful change management.
2: Articulate the Case for Change
Ensure that every person at every level of your company understands why it is vital to re-make core business processes and implement a new ERP solution.
It’s critical to clearly articulate the case for change to your entire organization. What’s more, we encourage clients and the implementation teams to communicate project scope, rollout strategy and implementation schedule at the start of the project.
3: Mobilize and align leaders
Create a guiding coalition of leaders who share a common vision for your organization’s transformation and embrace the changes to come.
These top managers must thoroughly understand and communicate the benefits of the project and position it as a top-priority business transformation initiative.
4: Assess and manage opportunities while mitigating risk
Identify the organizational and people-related opportunities – and take actions to mitigate the risks early in the process.
Start with identifying the key stakeholders within the business and across the enterprise – and determine their understanding of, and level of support for, the ERP initiative. Make a plan to maintain and boost their knowledge and support throughout the project. Assess the readiness of your business and people for change. Monitor the mood, enthusiasm, morale and level of support of your people by conducting mid-implementation check-ins.
5: Engage with stakeholders
Analyze the impact of every change, and communicate often with every employee, team and function affected.
An important strategy when it comes to organizational change management is to develop and execute a detailed communication plan. This plan should cover what will be communicated, why, to whom (audience), by whom, when, and how. All communications should include the project scope, objectives, milestones, and deliverables, present critical success factors and approaches, and discuss the transition to the new solution.
6: Create the future organization
Develop and design the desired organization and future state.
Analyze the current condition of the business, locations and departments in terms of processes, organization and people systems. But, most important, make a transformation plan. This plan should detail the actions, responsibilities (and a timeframe) to get your organization to a new endpoint. Define new processes using industry best practices and adapt them to your specific needs as necessary. Assess job redesign and competency requirements for the new environment. And you also will want to analyze HR implications such as performance management, compensation and classification, recruiting, hiring and on-boarding, etc.
7: Prepare and equip your workforce
Enable your people to thrive in the transformed organization.
This phase is more than simply training your workers on a new technology – it usually requires significant job redefinition, skill acquisition and organizational design changes. Determine new competencies that will be required. Make the effort to assess your workforce in terms of skills, abilities, experiences and capabilities, and assess any staffing impacts that will come with the new ERP solution. Then develop, plan and implement training strategies to close learning gaps. And, well before go-live, help everyone – end-users, leaders, implementation team members, process owners, customers and suppliers – clearly understand how their processes and work will be impacted.
At its foundation, the key to effective change management is to communicate comprehensively and frequently about the project – and to articulate the case for change clearly and consistently. And it is critically important to reinforce and reiterate this messaging to ensure all levels of your organization stay focused on the benefits that will come with the future state – and not on the disruptions and uncomfortable changes that come with ERP implementation.
Implementing a new ERP solution is a difficult and complicated project – and not one that companies do often. What are the keys to effectively managing this enormous, business-critical project?
Get the answers when you download our new ebook, “7 Essential Strategies for a Successful ERP Project”.
About Ultra Consultants
Ultra Consultants is an independent ERP consulting firm serving the manufacturing and distribution industries. Since 1994, we’ve helped hundreds of manufacturing clients streamline their business processes, select ERP software, and implement a complete ERP solution that meets the unique needs of their industry, specialty and organization. To learn more, visit ultraconsultants.com.
About the Author
Dave Lechleitner is a Senior Consultant for Ultra Consultants and has worked for the past 30 years helping small and mid-market manufacturers leverage technology and automation to increase performance, productivity, throughput, quality, efficiency, revenues, and profitability.