The Enterprise Resource Planning systems (ERP) market is now worth upwards of $21 billion. Going into 2008, Cambridge, Mass.-based market researcher Forrester predicted a compound annual growth rate of 4.2 percent for ERP solution packages, and that number has continued to climb. The use of technology in the workplace is expanding at an astounding rate. While there are no exact 2010 year to date numbers for ERP market share or growth, industry executives say it’s clearly a burgeoning market. In an effort to make operations more streamlined and effective, more organizations are implementing ERPs to assist them do business. Despite this increased growth many organizations aren’t achieving their desired return on investment with their new ERP because they don’t account for the people side of this change.
According to Wikipedia,
an ERP is an integrated computer-based system used to manage internal
and external resources, including tangible assets, financial resources,
materials, and human resources. It is a software architecture whose
purpose is to facilitate the flow of information between all business
functions inside the boundaries of the organization and manage the
connections to outside stakeholders. Built on a centralized database and
normally utilizing a common computing platform, ERP systems consolidate all business operations into a uniform and enterprise wide system environment.
As noted in a study conducted by Deloitte and Gallup Leadership Institute,
streamlining and consolidating is great from a technology operations point of view; however, what is the impact to the people side of the business? The end users and current employees, who will have to use the ERP in their daily work, are often overlooked in the implementation process and this can lead to a bumpy and sometimes unsuccessful implementation. To ensure productivity remains high (although a slight dip is normal) and to facilitate a smooth transition with minimal resistance, change management is a critical component to success.
Most of the way work gets done will change once the ERP is implemented. Employees who are accustomed to completing tasks in a certain way will have to learn new skills and new ways of doing things. Roles and
responsibilities may change, functions may be consolidated or eliminated, and interactions with customers and stakeholders may be defined. For successful implementations, sponsorship and governance are imperative. Organizational impacts such as structural and cultural changes often occur, and policies and procedures are sometimes rewritten. Change management around technology can sometimes be a daunting task. A skilled ERP change management resource should have experience designing and implementing solutions in all these areas as well as a fundamental understanding of the technology.
A qualified ERP organizational change resource should be a people focused change management professional. They should also have the following skills to best assist your organization during an ERP implementation:
• Experience: They should have experience working in change management, organizational culture, strategy and strategic communications. They should also have a comfort level with technology and experience with process and requirements definition, defining roles and responsibilities, and designing organizational culture and
• Basic understanding of ERP systems: Most ERPs are designed in modules, and can be implemented in pieces or all at one time. A trained resource not only knows what an ERP is designed to do, but also understands the basic functionality of each module and how the various modules integrate with one another. They should also have experience with project planning inclusive of planning and managing the implementation and impacts of multiple modules simultaneously.
• Understanding of ERP terminology and technical language: Often the ERP change management resource serves as a liaison between the functional (eg. HR, finance, policy) and technical people on the project. Therefore, they must have the ability to facilitate discussions and clearly communicate across teams of various skill sets. This involves being able to understand and speak in both technical and functional terms and have the ability the ‘translate’ needs and requirements in simple language. They should also have an understanding of specific ERP related terms and acronyms (Eg. SIT, CIT, User Interface etc.)
• Collaborative approach: ERPs cross multiple parts of the organization, and even reach outside the
organization to customers and stakeholders. The ERP change management resource should be responsible for establishing a sponsorship and governance structure inclusive of individuals at various levels and across all affected areas. It is imperative that the change management resource have a collaborative style, one that helps to engage key people from all impacted areas. Assertiveness is also important, as often information and details are required on very specific and tight deadlines and obtaining this information may require a high degree of persistence.
• Skilled in strategic communications: Many ERP efforts run into roadblocks because communication planning is either not executed in parallel with change management or is not executed early enough. Experience with communications planning and execution with multiple audience groups, cross functional communications, and the ability to communicate with the various audiences simultaneously is a necessary skill for an ERP change management resource. Most change management professionals do have some level of experience in communications; however, for an ERP implementation, a higher degree of experience in this area is
To ensure the money spent on an ERP offers the streamlined operations and return on investment expected, people and change issues can not go unaddressed. It is critical to have an experienced ERP change management professional guide this process from day one. After all, a piece of technology is only as effective as the people who choose to use it.