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 redefined. 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:
• 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 recommended.
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.
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Communication is critical in these kind of projects. Project managers, most of the times, are focused in communicating to the people directly involved in the ERP implementation. However, since ERP implementation will change operative procedures all over the organization, in all operative levels, cultural issues will raise due to one or more of the following problems:
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2.- Implementation strategies for big organizations involve masive training programs. Sometimes knowledge transfer is not as effective as the implementation advance and the knowledge sourse is farther to the original "core team".
3.- Change resistance is poorly considered in the project. Cultural changes does not take place when they need to happen. There are times for employee participation and times for directives to be followed. These projects have plenty of both.
4.- Knowledge maintenance: people moves throughout organizations, climbing the org chart and, thus, changing responsibilities as they move. People arriving to key positions for the ERP may not be well trained. Operative quality decreases and, after some of these changes, the difference can be relevant.
5.- The planning phase in the implementation project involves a definition of what the future business model will look like. This stage is critical. Definitions should be made by people that know the business and the system to be implemented. Big mistakes occur when this is not observed.
I agree with your points. Cultural issues can arise for many reasons,including those you mention. This is even more reason for a trained OD and Change consultant to be part of the effort, and part of the effort from the beginning.
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