An Experts Guide to ERP Success Chapter 6

8/14/2019 An Experts Guide to ERP Success Chapter 6

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An Expert’s Guideto ERP Success

By Eric Kimberling, Managing PartnerPanorama Consulting Solutions



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720-515-1377 Panorama-Consulting.com

© Copyright 2012 Eric Kimberling. All Rights Reserved.

Chapter 6. Organizational Change Management

As any project manager worth his or her salt knows, one of the critical success factors for effective ERP

projects is organizational change management (OCM). But what exactly is OCM, and what key activities

should you include in your project plan?

OCM means a lot of different things to different people. It is a broad topic that encompasses everything from

ensuring employee buy-in to organizational design to communications and training. It might include culturalassessments, organizational assessments, steps to ensure executive alignment and so on. While certain OCMtactics are beneficial to any organization undergoing an ERP implementation, the scope is truly determined by

the specific needs of the company.

A distressingly common reality of ERP projects, however, is that there typically is not an unlimited budget or

resources to implement a huge amount of change management activities. Leadership will sometimes become

too focused on the technological aspects of the implementation and pay far too little attention to the “peopleside.” The effects of this short-sightedness can be disastrous. But while OCM is very important to successful IT

projects, some aspects of change are more important than others and have a more immediate impact. At thestart, Panorama consultants typically advise focusing on organizational change activities that will haveimmediate (and long-lasting) effects on the business and the success of its ERP implementation. Steps

include:

• Define your “as-is” business processes for each location, as well as what the “to-be” operatingmodel will be across locations. As previously mentioned, this is an opportunity to standardize your

operating model, if it isn’t already. This documentation will also help you identify how your organization

and processes will change after ERP implementation.

• Define key stakeholders and change agents from each functional area to ensure you have

sufficient involvement and representation. These people are instrumental in helping to identifychange activities that will work for their specific locations or departments as well as implementingbusiness process and organizational changes.

• Define performance measures for each functional area and link them back to your high-levelbusiness case and ROI analysis. This will “operationalize” your business case and assign

accountability to people in each department to ensure you realize measurable business improvements

as a result of ERP implementation. Nothing motivates like metrics!

• Measure baseline pre-implementation measures and define performance targets to quantify howERP software will improve your business. Just as importantly, plan to conduct a post-go-live audit to

measure performance after your implementation to ensure that you are realizing your projectedbusiness benefits. If the numbers aren’t positive, reexamine organizational change management

activities.

• Identify the impacts that ERP software will have on employees’ jobs, and develop a change

management plan, communications strategy and training program. Ensure that you take intoaccount the entire organization and have clear tactics laid out for those employee groups that will have

the largest impact on the success or failure of the ERP system implementation and subsequent usage.

While the benefits of new business software may be a no-brainer to executives, it isn't always as clear toemployees – especially those who have developed their own processes to get their work done and/or have

enjoyed minimal oversight. These employees can, and often do, view the implementation of ERP software as a



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very clear threat and will react with a fight or flight mentality. Therefore, OCM is critical to a successfulenterprise software rollout. If your leadership team is on board with the importance of change management,

then you’re already one step ahead.

In our ongoing research of ERP implementations across the globe, we found that nine things separate best-in-

class enterprise system initiatives from those that fail. Of those nine failure points, six of them are either

directly or indirectly related to OCM.

See if you recognize the six sources of ERP failure that are mitigated by an effective organizational changemanagement strategy:

1. Lack of purpose for implementing ERP

2. Not going into the project with “eyes wide open”3. Lack of executive and management buy-in4. Not leveraging internal and external “A-Team” resources

5. Not choosing software that is aligned with key business requirements

6. Misalignment between software configuration and business processes/workflows7. Lack of effective training8. Weak internal and external project management

9. Underdeveloped business case to manage business benefits

With the exception of items four, five and eight, OCM activities can positively impact everything on the above

list. Given how much of an impact OCM has on a project’s success or failure, it’s still surprising to see just howmany organizations think “Oh, we’ll just tell them to use the system – what choice do they have?” The answeris staff members have plenty of choices – from subtly undermining the value of the system and the choices of

the C-suite to actively seeking workarounds to flat-out refusing to change their processes. Any of the above

can be disastrous, but a combination of all three across the workforce can completely ravage ROI on the ERPinitiative.

OCM and Business Performance Improvement

Any successful OCM project should be developed hand-in-hand with the business performance improvementsmade possible by the implementation. Business performance improvement demands that your core business

processes are optimized for efficiency and aligned to company goals. This ensures maximum visibility andcontrol, while also producing immediate and lasting improvements.

Optimized and Aligned Processes Require:

• Processes aligned to strategic focus and goals

• Quantified business value

• Positive productivity impacts to drive top-line revenue and cost reduction

• Customer value and service focus

• Technologies that drive critical process with automated workflows and integrated data that supportincreased throughput, consistently high-quality delivery, and timely and effective decision-making



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Enabling Technology Means:

• Designed to identify and improve process capability

• Selected on the basis of business value

• Staged for execution in rapid ROI phases

• Focused on customer value and productivity gains via data and workflow integration

A High-Performance Organization Encompasses:

• A process-based, vertically and horizontally aligned goal system

• Optimized organizational structure and authority relationships

• Fact- and accountability-based performance management

• Clear understanding of company direction and goals

• Coordinated and focused action across functions and levels

• Leadership that incorporates structure and incentives to reliably generate high performance

From an OCM standpoint, the value of changes to business processes must be clearly communicated at alllevels of the organization. Will the new processes speed growth? Will they make employees’ job functions

easier? Will they increase profit? When crafting change management communications regarding theprocesses, remember to address both “What’s in it for me?” and “What’s in it for the company?” for each

functional area.

Why OCM is So Important to the Success of ERP Implementations

Although it is one of the key success factors for any ERP implementation, OCM can be difficult to quantify and

rationalize. Each year, Panorama’s annual ERP Report shows the impact change management (or the lack ofchange management) can have on an organization. Though slightly dated, it’s still important to note thefollowing metrics from our 2010 ERP Report (available online at Panorama-Consulting.com):

• Over 40-percent of organizations are dealing with significant change concurrent with a newsystem rollout. An ERP system rollout alone will impose significant pressures on an organization and

its resources. Throw in other changes, such as a new CEO, acquisition of another company or evenlayoffs, and that change can be the straw that breaks the camel's back. Over 40-percent of companiesimplementing ERP software are dealing with either a new CEO or the addition of new office locations.

In addition, 26-percent experience a merger or acquisition around the same time as their ERP

deployment, while 19-percent go through layoffs. The magnitude of these changes make theimplementation of a strong OCM program in conjunction with the ERP system implementation evenmore imperative.

• People do not adapt well to change and organizational communication is weak. More than 53-percent of implementing organizations assess their own ability to deal with change as fairly poor or very

poor. In addition, 47-percent say communication between management and employees is poor. Thesetypes of environments are not conducive to effective ERP implementations. OCM strategies and tactics

however, help address these organizational risks and barriers to make the rollouts more successful.

• More than 60-percent of organizations suffer from poor visibility to data and poor integration in

their old systems. This finding suggests that employees using a new ERP system have strongorganizational resistance and a steep learning curve to overcome. Poor integration between functional

areas in the old system was cited by 64-percent of organizations as a driver for a new system, followedby poor visibility to reports and key operational data at 62-percent. These metrics underscore the



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magnitude of change that a single, integrated enterprise software system such as ERP or CRM willentail. An effective OCM plan is critical to help employees understand and leverage the improved

operational visibility in the new system.

• Organizations expect a lot from their ERP systems. Despite the organizational challenges outlinedabove, companies expect their enterprise software systems to deliver real business value. Sixty-ninepercent of companies expect their systems to improve business performance while 39-percent expect

systems to standardize business operations and 39-percent expect systems to make employees' jobseasier. Not to be the bearer of bad news, but our experience and research shows that these goals

simply don't happen without effective OCM.

• Most companies are not yet ready for the organizational changes of ERP software. Perhaps mostalarmingly, a majority of companies are not ready to address the people, process and benefits

realization aspects of their enterprise software implementations. Nearly 50-percent of companies in the

process of implementing ERP software have not yet started their organizational change, training, orcommunication plans. In addition, 42-percent have not developed a business case or ROI analysis,

which suggests companies are not ready to measure and manage the business benefits they expect toachieve. All of these areas need to be addressed prior to an effective implementation, which does not

bode well for a large number of companies.

So what are the lessons learned from this benchmark data? It’s clear that OCM is one of the key reasons why

companies succeed in their ERP initiatives, while lack of OCM is the reason behind most failures. Success orfailure has very little to do with software, which is why organizations need to carefully plan and allocate projectresources to effectively include OCM activities as part of their enterprise software initiatives.

Managing Change – Locally and Globally

Over the course of hundreds of ERP software selection, implementation, recovery and benefits realization

projects, Panorama has identified the following steps to help organizations address cultural obstacles in theirERP projects:

• Conduct a cultural and organizational readiness assessment across all of your departments and

geographies that will be impacted by the implementation. This can be done through a combinationof online surveys and focus groups and should be repeated several times over the course of the

project. These assessments help leadership identify pockets within the organization that are the most

change-averse and will require the most organizational change management attention. This informationfacilitates the building of an organizational change management, cultural change and communicationsprogram to address the problem areas.

• Implement cultural change activities. Your company’s culture took a long time to get to where it is,

so it will take a long time to change it. However, based on the findings in the above step, there are

things you can do to have an immediate impact and start to remove cultural obstacles to change. For

example, if there is historically an adversarial relationship between employees and management, it maybe helpful to develop collaborative management and employee teams to help define “to-be” businessprocesses during the early phases of the ERP project. Or, if you have found that employees do not feel

empowered to make key business decisions, you may want to take key employees and put them in

positions with decision-making authority. Obviously, these activities are easier said than done, and howyou change your culture depends on your unique situation, but the point is that there are ways to havean immediate – and very effective – impact on reducing cultural obstacles to change.



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• Ensure that you have a solid organizational change management program in place. OCM is much

more than just training. You should ensure that you are holding regular workshops with end-users and

management, involving them in process and organizational design workshops. Formal communication

keeps users informed of the purpose of the project, your progress, why you are implementing the ERPsystem and so on. We always tell clients that organizational change management is more importantthan the software selected. Many will argue, but no one can deny the importance of change

management.

• Develop an implementation and roll-out strategy that fits your culture. We’ve seen too many

clients try to “slam in” an ERP system in as little time as possible. What these companies inevitably

discover is that this type of organizational pressure amplifies cultural obstacles that have always beenin place. For example, if company employees feel like managers don’t value their contributions, this

belief will be confirmed when they find out at the water cooler that they are suddenly going to have to

start using a new IT system. Spending the time to address cultural obstacles and to develop animplementation plan that considers these needs helps minimize the obstacles inherent in any project of

this magnitude.

The Role of Change Agents

A change agent is the direct liaison between the technical project team members and the end-users. Thechange agent understands the new business processes being implemented and the impacts of thoseprocesses to the business.

The role needs to be a formal role, both explained to and recognized by the end-user population. Withoutformal definition the role may be confused or overlooked and will not be able to provide the needed support to

the ERP project.

A change agent is an experienced employee who is considered at or near “super-user” status of the current

system. He or she is a highly influential employee and is respected by peers. Change agents make great

trainers and most importantly, they are good communicators, progressive thinkers and focused on continuous

improvement.

There is a delicate hand-off between technical team members and change agents. The technical team isgreatly involved in understanding the business requirements, designing new business processes andconfiguring and testing the system. The change agent accepts the newly designed business processes and

focuses on socializing the new process, obtaining buy-in and training users if required. Too often we see chaos

just prior to go-live with technical team members scrambling to complete testing, approving and possibly evencreating training documents. With a team of change agents on board, the technical team can stay focused on

the technical aspects of the system while the change agent introduces, promotes and delivers the new ERPsystem and processes to the end-users and stakeholders.

With change agents in place, the technical team members will never be faced with competing priorities and theend-users will be introduced to the new ERP system in a timely and strategic manner.

OCM Tips for Global ERP Software Implementations

OCM is one of the most important success factors for any enterprise software initiative, but it is even more

critical for global ERP software implementations. Issues related to cultural differences, inter-office politics,

language barriers, and organizational complexity magnify challenges such as employee acceptance of

redesigned business processes.



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A coordinated global OCM initiative can help alleviate some of these risks. Panorama has helped manageorganizational change for enterprise software initiatives for numerous multi-national companies such as

Samsonite, Kodak and Nufarm and we’ve learned many lessons along the way. Below are ten tips to address

the organizational complexities of a global ERP implementation:

1. Business process standardization. Companies with global offices, and in particular those with

locations acquired from another company, often have non-standardized business processes. A global

enterprise software implementation provides an opportunity to standardize processes across locations,

but it can be very challenging to make that change happen. OCM is crucial to overcoming suchchallenges.

2. Understanding of local needs. Standardization is important for optimizing ERP benefits and achieving

a positive return on investment. On the other hand, it also is important to ensure that the standardized

operational model of the new system will accommodate local needs. Even if every local need or want isnot addressed via the new system, listening to individual concerns goes a long way toward securingemployee buy-in and support for the new system across the globe.

3. Understanding of local requirements. Global changes that are pushed to the local level by corporateheadquarters often do not adequately consider local requirements. Each country has its own regulatory

resource and employee constraints, so it is important to plan accordingly when implementing the

changes. Obviously, completely localizing a global initiative defeats the purpose of having a singleglobal change, but no matter how well-designed a solution, it is simply not going to work perfectly for

100-percent of the world.

4. Localized delivery of employee communication and training. Not everyone will speak the preferredlanguage of your corporate headquarters, so it is important to communicate and train in the language

most appropriate for each location. We have worked with many multi-national (and even domestic)

companies where management and key team members speak one language and the lower-levelemployees another. New ERP software takes enough time to learn without language barriers, so

translation of key messages and training will typically pay dividends in the long run.

5. Reliance on your change agents. Each major office should have a local representative that acts as a

change agent for the project team. These change agents typically represent the local interests of theiroffices, validate how standardized business processes will work with their location and communicatekey process and organizational changes to their respective stakeholders. This employee representationis key to a successful implementation.

6. Leveraged performance measures. Performance measures transcend language and culture in a waythat everyone can understand. They should be used to quantify the results you expect to achieve from

your ERP software investment and detail how each local office is expected to contribute to theimprovements. Measuring and rewarding managers in areas that will be enhanced by the ERP or IT

implementation is a great way to ensure they collaborate with other geographies and functions to makedecisions that are best for the company. This should be part of a larger performance measurement and

IT benefits realization strategy. These measures also are important in identifying opportunities to

improve results after go-live.

7. Culture and values. Not all people in the world value or are motivated by the same things. For

instance, many western European countries value history, tradition and work-life balance, while manydeveloping Asian countries value hard work, entrepreneurship and teamwork. Managing change in

these very different environments requires differing approaches and messages.



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8. Propensity for change. More established and developed countries have business operations thathave worked well for a long time, while many developing countries have less mature operational

models. Therefore, it is often common to see more resistance to change in developed countries versus

emerging ones. For example, a small company in India that is struggling to keep up with new demandwith a very limited staff and manual processes may be more welcoming of an operational improvementthan a large office in the UK that has refined its operational model and implemented automated

processes over a long period of time. On the other hand, the small office in India may have fewer

employee resources to assist with a change effort.

9. Varying degrees of understanding of best practices. Employees in different countries have different

levels of understanding of business and technical best practices and methodologies, which may affectthe amount of change management required to “sell” the ideas to affected employees. For example,

employees in eastern Europe may be less likely than Americans to understand the value and benefits

of Six Sigma or business process management methodologies, which would likely increase changemanagement effort.

10. Buy-in is important. This is true for domestic ERP projects, but it is even truer for global initiatives.

Involving a broad geographic and functional cross-section in the planning, process improvement andimplementation activities early in the process will help identify and address some of the issues

mentioned above. It also helps overcome potential pockets of resistance by ensuring that employees

across the globe are involved in the decision-making and planning surrounding the particular changeand feel a sense of pride and ownership in the project on a whole.

Resistance

Overcoming an Organization’s Resistance to ERP and Change

It’s commonly perceived that people in general don’t like change, and ERP involves quite a bit of change. Sothat alone may explain why resistance to change is so common in ERP projects. Below are some key activities

that will help minimize this type of resistance to change:

• Identify change agents early in the project. As mentioned above, these should be people that knowthe business well, embrace change and are well-respected in the organization. This group of people,

which should represent all the functional areas affected by ERP, will serve as champions of the project.They will also be key in helping other employees understand and learn the value of ERP and how it

affects their jobs.

• Train, train, train. Very few disagree that training is important. The problem, however, is that many

projects tend to focus on training users how to use the new system prior to go-live. While this iscertainly important, it does not address other issues such as how key business processes will beaffected by ERP. In addition, not enough companies take advantage of making training tools (such as

online help, refresher training, etc.) accessible for employees after go-live.

• Involve employees in the ERP process. The more involved employees are in the ERP decision and

implementation, the more ownership and buy-in they will have into the project. This is not to say that

every single employee should be involved. However, involving more employees than just seniormanagement in the decision and implementation planning process will go a long way to make peoplefeel more ownership, which inevitably results in less resistance in the future.



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• Over-communicate. There is no such thing as communicating too much with employees. The morethey know about why your organization is selecting ERP, how it will benefit the company, and what it

means to them and their jobs, the less likely they will be to resist the changes when they are

implemented.

Change Leadership vs. Change Management

We are currently working with a client that is experiencing a common but unexpected challenge as theyimplement a new ERP software solution. The ERP implementation is organized with a senior team functioning

as a Steering Committee. Reporting to them are the project manager, our consultants, a Core Team and end-users.

The implementation was preceded by an ERP selection project that focused on the business requirements and

the business case for the ERP implementation. Most of the members of the Core Team played a part in theERP selection process in one capacity or another.

Now that the ERP implementation is underway and “the heavy lifting has begun,” the organization isexperiencing some resistance within the ranks that needs to be addressed. The interesting element of thisresistance is the source – the Core Team.

The expectation is that the Core Team would be the most intimate and committed members of the whole ERPimplementation effort. Most of them were closely involved in the ERP software selection process. However,

now their initial enthusiasm for the project has evolved into several forms of resistance.

Sources of ERP Resistance

• The reality of their required commitment for completing the project

• The amount of their resources that need to be deployed on the project

• The difficult functionality decisions that have to be made, with the accompanying compromises

• Their own competing personal agendas

Critical Success Factors (CSFs) for Change Management

• Truth

• Accountability

• Leadership

• Engagement

• Alignment

These CSFs also apply to change leadership. The subtle but significant difference is that in change

management we focus on what must be done to make the users of the ERP software successful with the new

tools. Change leadership focuses on supporting all of the participants in the change management process. Theproject manager and project lead need to address this and still deliver an on-time and on-budget ERPimplementation. The Steering Committee wants to provide support and wonders what to do.

Here is what we have suggested:

• Lead by example. In addition to communicating the priority of the ERP implementation, show it. A

decision was made to suspend one of the quarterly tasks that required a lot of time from the CoreTeam. The reason communicated was that right now the ERP project is the priority and the SteeringCommittee recognizes the Core Team’s resource challenges.



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• Support the champions. Vocal, public acknowledgment of the work being done on the project by the

Core Team is tangible reinforcement of the priorities.

• Challenge the undecided. Calling out the Core Team members constructively in the meetings (not inpublic) will reinforce their accountability to the Steering Committee and each other.

• Promote accountability. Be crystal clear with every member of the Core Team regarding choices andconsequences. If there is responsible dissent about a deliverable or deadline, get it out on the table fordebate in the meetings. Work the discussion to hammer out the best answer. Once a decision has been

made, make sure everyone understands the shared commitment to it. The debate is over. Now, clearly

explain the expectations.

• Get everyone possible on board the train because it’s leaving the station. Following the prior

point, the consequences of not delivering should be clear. Managing dissent constructively is a greatway to create a much higher performing team. This approach might be new, and it might beuncomfortable, but it is this client’s reality and should be seen as an opportunity.

Other lessons learned from the situation:

• Do not let yourself get painted into a corner by early communications. One factor contributing to

this situation was the premature and ill-advised comments made by a senior team member in a publicforum regarding the project. His comments were truthful (at the time) and open, but they were ultimatelyproblematic because they were unguarded at a time when caution would have been helpful. One thing

led to another, and all of his other comments were lost in the storm that focused on one response to a

question. His response was not a policy statement. It wasn’t the declaration of a formally decidedbusiness decision. It was a well-intended, but premature reply to a legitimate question. As they say,hindsight is 20/20. We would all like to have that one back. The law of unintended consequences has

not been repealed, so as seductive as the opportunity to “tell it like it is” might appear – resist it. You

can always say more later.

• Do not automatically resolve to say absolutely everything. There are appropriate limits to what

should be shared in almost any communication. Some communications should be limited in the interestof certainty, fairness or discretion. It is not wrong to be sensitive to the impact of comments that willcause concern, anger or fear. When difficult information needs to be shared – share it thoughtfully, with

balance and solutions.

• Do take the long-term view. One thing that we have learned is that sooner or later the truth always

comes out. Always. Sooner is usually better than later, and truth is always better than any deviation

from it. But sometimes sooner is not the right time to share everything. There may still be uncertainties,unforeseen changes, options, alternatives, etc. Still, the dilemma is how to be sure, after all has beensaid and done, that you were on the side of truth. A mentor once told me, “If you always tell the truth

you don’t really need a good memory.”

• Empathize honestly. Bad news is a part of life. People who are on the receiving end of bad news

seem to react much better when they believe that they heard it from someone acting in good faith. So,resolve to speak as though you were the person most negatively affected hearing the news. None of uswith any amount of life experience should have too much trouble empathizing – since we all have been

there at some point.



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• Do the right thing. If what is needed is a retraction – retract. If an apology – apologize. If anexplanation – explain already. This is not just damage control; it is the rebuilding of trust.

Training and Communication

In any ERP implementation, it is generally understood that training is a key component of organizational

change management and of the overall success of the ERP implementation. However, there is a distinctdifference between training and effective training.

ERP training programs often erroneously focus on transactional training. ERP software companies and

implementation teams are generally good at creating documentation and delivering training that teachespeople how to complete transactions in the system. However, running a business entails much more than

merely completing transactions within a software program.

Instead, ERP training programs should be built using the new business processes as the foundation. In fact,the software itself is relatively irrelevant to these types of training programs. Granted, ERP software is an

enabler of new business processes, but the software should certainly not be the exclusive focus of a pre-go-

live ERP training program.

Conversely, these training programs should teach employees how to perform their business processes and

workflows in the new environment. It is important for ERP training programs to deliver knowledge in the contextof how employees perform their day-to-day jobs, not simply how to complete transactions in a system.

For example, transactional training might focus on how to create a purchase order (PO) in a system. While thistransaction is important to understand in a new system, it does not address the business rules behind the PO:who will approve it, what will happen after the PO is approved, how orders are received against the PO, etc. It

is these business processes that employees need to understand for maximum efficiency and buy-in, not just

the technical transactions in the system.

ERP project managers can go a long way toward making adoption easier if they focus on effective business

process and workflow training, as well as ERP transactional training. This type of process-focused trainingshould be a centerpiece of any ERP OCM program.



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The Importance of Communications

Employee communications is just as important as training. Throughout the deployment, employees should be

apprised of the status of the project, as well as how and when the rollout will affect them. Employees shouldknow when they can expect to be trained, when they will be expected to convert to the new system, and what

tools they will have at their disposal should they have problems or questions. Perhaps most importantly,employees from each workgroup should be informed about how their business processes and day-to-day jobs

will change. These types of employee communications go a long way to help alleviate the anxiety andconfusion of an ERP rollout.

In addition to communicating with employees, it is important not to overlook other key stakeholders. Forexample, customers and vendors also need to prepared for what to expect from your ERP project, especially if

you are involved with a high-visibility organization or ERP implementation. What precautions are being taken to

ensure customer deliveries aren’t delayed? Are there changes to the ways orders will be processed? What arethe benefits that these changes will bring to the supply chain? These are just a few examples of items that

should be proactively defined and communicated with customers and vendors.

Last but certainly not least, it is crucial to keep your executive stakeholders informed as part of your

communications plan. What is the status of the project? What are the major risks and risk mitigations in place?

Where do you stand on budget vs. actual dollars spent? Regular updates and meetings with key executivesmust be incorporated into your project’s communications plan.

Many of the above items should be handled by the change agents or the OCM lead to ensure there is focus on

these important activities. These communications are critical to an effective organizational change and ERPbenefits realization plan and should be carefully considered during your ERP planning efforts.

The Incredible Shrinking Scope of ERP Training

If good ERP training has a direct correlation with prepared and engaged employees (a requirement for

maximizing productivity during go-live), why does the “Incredible Shrinking Scope of ERP Training”phenomenon happen? What can be done to mitigate the powerful forces that squeeze training into whatever

timeframe happens to be available between finalizing the system testing and the go-live date?

It’s a simple fact. The ERP system is the priority of the ERP project. However, the humans that use the systemmust be prepared for the new processes and transactions needed to continue operations without disruption. Al

too often, the users are on the short end of the deal when an ERP project exceeds any of its deadlines.Trainers and users are required to work faster and for longer hours, and to prioritize as needed to meet the

project deadline. “They’ll just have to get it done in less time.” So what is the common result of this

adjustment?

Five Results from the Incredible Shrinking Scope of ERP Training

• Training end-users on an ERP system without expected functionality or transferrable data

• Training end-users for activities that do not match their roles or address the expected changes to the

organization

• Not training end-users in the activities that they actually perform

• Inadequately setting up access and profiles for end-users

• Using inadequate or canned training course content

When training is handled in this fashion, end-users are left with a number of negative perceptions. Possibly



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most damaging, is the perception that the organization does not understand the work and processes of theemployees. The natural conclusion is that the important decision makers are disconnected and unaware of

reality within operations. The last thing any employee needs is a lack of confidence in leadership and direction

of their organization. This is especially true during times of major transition. Yet, based on the frequency withwhich it happens, this is an acceptable outcome.

What can an organization do to avoid allowing the ERP training phase to get squeezed beyond recovery? Thefollowing is based on lessons learned, in hopes that some of these steps make it into upcoming ERP

implementation plans.

Six Steps to Maintain and Strengthen ERP Training

• Validate your ERP project scope with an independent third-party consultant to get an expert

assessment of forecasted time and resource requirements.

• Incorporate a strong statement into the project vision to enforce the need for quality ERP trainingand respect the experience of the project team and end-users affected by the ERP implementation.

• Recognize the connection between productivity and employee output and the need to deliver

quality training, at the right time, for the right activities.

• Understand your steering committee and appeal to their objectives for they have the power to makedecisions that will make or break your training plan.

• Engage the involvement of an influential advocate / change agent to present the negative impactsthat can occur when training timelines and quality of delivery are at stake.

• Acknowledge that designing and delivering an ERP training program that addresses complexbusiness process changes is a monumental task and should not be considered “additional duties asassigned” for persons with other full-time obligations. Backfill and hire consulting firms to ensure the job

is done and done right.

Training for Paperless Information Flows

One of the most common benefits cited with an ERP implementation is the reduction of paper forms to manage

information flows. Easy, right? You just enter data into the ERP system and enjoy the speed and

environmental benefits of electronic processing. Actually, you need to consider what this change means to

your organization and plan accordingly to avoid surprises.

Here are some lessons learned that can help prepare your workforce for this seemingly easy change in

process:

• Evaluate the current information flow. If reviews and signatures are involved (for expense

reimbursement or time-off), is the purpose to approve/decline the request or is it actually only to bemade aware of the request? If an electronic notification will suffice, the company may be able toremove some bureaucratic tasks. Managing the exceptionally problematic request takes less time and

effort than routing standard transactions through a gauntlet of approvals and managing delegations

during absences.

• Create a naming convention that clearly labels information. When employees are used to flipping



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through a physical folder with labeled sections to easily identify the contents, searching through vaguelymeaningful menu options can be frustrating. Ask for input to create a useful, user-friendly naming

convention.

• Understand that paper forms may allow less accountability. Let’s say you have a supervisor whohas been slow to process a rate increase for their not-so-favorite hourly employee. It’s easy to hidebehind “I sent the form in to HR and Payroll, I’m not sure where it’s at.” The employee then sends HR

and Payroll on a hunt to find the form, often cycling back to the supervisor to determine when (and if)the form was actually submitted. Going electronic means the supervisor can track the request and

report directly back to the employee, which also requires the supervisor to understand processing cut-off dates and payroll cycles. Both employee and supervisors have a learning curve to understand the

new information that is available through an integrated electronic system.

• Anticipate role changes. Administrative assistants, HR and payroll positions may have a significant

portion of their time consumed with the management of paper forms. If the process is streamlined, theymay no longer be the “gate keeper” of requests. Retraining in new tasks may be required if a role is

significantly impacted. For example, clerks who have previously approved and tracked forms may applytheir knowledge about the rules and processes in a role where they support new users in the electronic

processes.

• Understand that paperless doesn’t negate the need to track and report. Paper forms often trigger

a manual entry into a tracking system (usually designed to produce easy reports). Think about arequest for time-off and the frequency employees want to know their vacation balances. How will this

information be made available? Electronic processing allows for increased self-serve, which requireseducation and training. If employees have been going to a certain person for years and years for

answers, leadership will need to deliberately break the habit of being served up information uponrequest.

Training for Increased Data Visibility

One of the big advantages of ERP is visibility to enterprise data. Companies without ERP often times havefragmented silos with no knowledge of what is going on in other departments. For example, when a customercalls customer service to order a product, the CSR may not know when an out-of-stock item is due to bereplenished. Or, in another case, a product manager might not have access to pending sales of a particular

product. When implemented correctly, ERP software erases problems such as these.

The downside, however, is that increased access to information often means more employee anxiety and

uncertainty. In order for organizations to realize the benefits of ERP, employees need to leverage improvedprocesses and functionality. The best way for them to do that is to understand what is expected of them.

In our example above, what is a CSR supposed to do when a customer places an order that’s out of stock? Inthe old world, maybe they would have just transferred the customer’s call to purchasing to find out when the

product was going to be ordered. Or maybe the CSR would put them on hold, call purchasing to find out the

answer, and verbally give the status to the customer. But in a new system, they need to understand what thenew information means, where to find it and what they are expected to do with it.

A big reason for ERP implementation failure is that employees do not understand process changes such asthese. Therefore, rather than utilizing generic system training, organizations need to implement acomprehensive and process-based training program that is specific to the organization. This should be an

integral part of the company’s OCM program.



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About the Author

After 15 years of ERP consulting at large firms including PricewaterhouseCoopers and SchlumbergerSema,

Eric Kimberling realized the need for an independent consulting firm that really understands both ERP and the

business benefits it can enable. He currently serves as managing partner of Panorama Consulting Solutions,the world’s leading independent ERP consultant.

Eric began his career as an ERP organizational change management consultant and eventually broadened hisbackground to include implementation project management and software selection. Eric’s background includes

extensive ERP software selection, ERP organizational change, and ERP implementation project management

experience.

Throughout his career, Eric has helped dozens of high-profile and global companies with their ERP initiatives,

including Kodak, Samsonite, Coors, Duke Energy, and Lucent Technologies to name a few. In addition to

extensive ERP experience, Eric has also helped clients with business process re-engineering, merger andacquisition integration, strategic planning, and Six Sigma. Eric holds an MBA from Daniels College of Business

at the University of Denver.

An Experts Guide to ERP Success Chapter 6

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