4 ERP Implementation Change Management Strategies

The vital role of change management in ERP implementation cannot be overstated: it is critical to minimize employee resistance to attain a successful implementation. Whether your new ERP works will depend on how well your organization manages the human side of the transformation.

4 change management strategies to improve the implementation process include:

1. Top-down buy-in
2. Change management champions
3. Open communication
4. Employee training

Learn more about each to better understand the role of change management in successful ERP implementation.

Role of Change Management in ERP Implementation

In the terms of ERP implementation, “change management” refers to how well the people using the new software adapt to it. When a company decides to adopt a new ERP or upgrade the system, the role of change management determines how smooth the implementation will go for the users. If employees don’t like the new system, their resistance can lead to low productivity or an ERP implementation failure.

4 Change Management Tips for Smooth ERP Implementation

Successful change management is possible with a few key considerations:

1 Top-down buy-in:

Investment in the ERP’s success needs to start at the top. Those in leadership roles should be the first and primary advocates for the new ERP. Since they are the ones responsible for selecting the ERP, they should be sharing how it will help the company’s overall success.

Change management identifies and cultivates other leaders within the organization who can champion the ERP project. These leaders play a crucial role in motivating and guiding employees through the changes. If they aren’t fully on board with the change, why would anyone else be?

2 A team of change management champions

Change management is all about getting the human side of business in order. It’s key to engage stakeholders at all levels and across all departments in the process. Start by identifying change champions willing to act as sponsors for the new system. The selected representatives, ideally from different departments, are the change management team in charge of streamlining the employee side of implementation. Together, they will act as advocates for other end-users, helping them understand the benefits of the ERP.

Another job they’ll have is identifying and addressing resistance as early as possible. This might mean talking to other employees about their concerns with new workflows. It can also be from reading about ERP implementation failures at other organizations to find out what went wrong. This is where having multiple departments represented is critical, as different areas of the organization might have different concerns.

3 Open communication throughout the organization

ERP implementation projects without open, clear communication channels are more likely to fail. Crafting a communication plan is another way to involve stakeholders in the implementation. Most importantly, they’ll want to know how the new ERP system will impact their roles and responsibilities.

Updates on the implementation can take the form of emails, in-person meetings, and newsletters. As long as the method is consistent and timely, it should help employees adjust to the upcoming ERP. Ideally, some communication should be interactive so potential users can share concerns before implementation takes place.

4 Employee training to minimize resistance

ERP training programs are an important part of change management because they help the primary users get direct experience with the software. Continuous learning and skill development is another way to reassure employees that their concerns are being addressed. Any issues with the new workflow should be taken seriously.

Of course, the adjustment period doesn’t end once the ERP is implemented. Regularly collecting feedback from users is a popular strategy to overcome resistance. The information gained can be used to shape strategies for continuous improvement in future change management processes.

Main Challenges to Change Management

• Changing too fast: Even if employees are ready to accept new software, users may need time to adapt to a new system. Rolling out the installation across different departments is one way to intentionally slow down the transition so users can adapt at a reasonable pace.
• Overall changes to workflows: Another form of resistance to change comes from larger changes in the overall company processes. Reassure employees that it’s for their benefit. Otherwise, they might feel the new system is intended to replace them.
• Lack of employee input: If the first time an employee uses a new system is after it’s been installed, you’ve missed the chance to gain valuable feedback. A little pushback should be expected as regular growing pains. As the primary day-to-day users, their concerns should be addressed.

Change Management Frameworks and Models

There are many different change management models out there which cover everything from business transformation to personal grief management. For ERP implementation, here are three popular frameworks:

• ADKAR: Standing for Awareness, Desire, Knowledge, Ability, and Reinforcement, this model is meant to help users fully understand each aspect of change the ERP will bring.
• Kotter’s 8-Step Model: This model includes creating a sense of urgency for the project, forming a strategic vision, and enlisting volunteers to remove barriers and institute change. These full 8 steps are designed for helping large-scale organizations with managing change by emphasizing strong leadership and clear communication.
• People-Centered Implementation (PCI): As the name suggests, the focus here is on the people directly impacted by the implementation and allowing them to participate in the ERP selection.

It’s important to note that, since change management is based on human behavior, some models will work better than others simply based on who is using them. Hybrid models which mix two or more frameworks together are increasingly popular since they allow implementation teams to customize their approach.

Real-Life Change Management Examples

Some examples of effective change management leading to successful ERP implementation include:

• ABC Compounding: Based out of Georgia, this industrial cleaning supply company was relying on manual data entry for hundreds of work orders. Employees were thrilled to learn the new SAGE ERP X3 would drastically cut down on manual entry, allowing them to work faster.
• LG Electronics: This South Korean company used change management by using an ERP to improve workplace efficiency. Users, particularly in the HR department, were shown how the new software would streamline workflows and increase employee satisfaction.
• N&N Moving Supplies: This moving equipment supplier successfully adopted NetSuite ERP in part due to careful change management. Users were able to create custom dashboards, letting them feel involved in the process.

In contrast to all this success, one famous ERP implementation failure occurred in 2004 due to poor change management. The US Air Force tried modernizing financial systems and supply chains with an ERP. Yet high management turnover on the project meant there was a lack of consistent leadership to guide the project.