Five Common ERP Implementation Watchouts and How to Address Them
"Our journey [through the ERP implementation] has been successful because change management has helped facilitate strong partnerships across the impacted sites, and more directly because we have taken the time to evaluate and align our processes. By thoroughly understanding our key business and IT processes and improving them in line with best practices has created a solid foundation for ongoing success"
-Executive Director, Global Systems Transformation
Implementing a new ERP (Enterprise Resource Planning) system may seem exciting and transformative, especially in the beginning. Remember though, technology is just one part of the solution. Many ERP programs also involve implementing new ways of working and new behaviors for employees in the organization. If your organization is about to implement an ERP, or is already underway, here are five watchouts to keep top of mind, outside of the purely technical elements of system implementation:
Employee Resistance: Implementing an ERP requires substantial time and effort from employees, and the changes the implementation brings can create tension among team members. During this time, employees are likely to demonstrate some level of resistance as they work through their feelings about the changes.
It is important to understand that resistance is a normal human response to change. Expecting it, understanding the reasons behind it, and employing change management tactics in a timely manner to address it are crucial steps in helping people move forward toward acceptance and adoption of the new system and ways of working. Tactics to address resistance can include asking people how they are feeling about the change and what excites and concerns them, engaging them in learning activities, leveraging change champions, deploying timely and informative communication in channels people pay attention to, and involving employees in decision-making to gain their buy-in.
Process Alignment: Typically, an early phase in an ERP implementation involves documenting, streamlining, and updating current processes and defining future state business processes based on the system's capabilities and the organization’s usage decisions. While this effort may appear straightforward, it requires very intentional steps to involve employees, achieve alignment (especially across departments or functions), and avoid unexpected issues during UAT (User Acceptance Testing) or UXT (User Experience Testing) and go-live. Change management activities ensure that process changes are validated by the right Subject Matter Experts (SMEs) and are well-communicated, understood, and adopted by impacted employees. Acknowledging potential challenges and communicating plans to help employees make the transition from the present state to the future state can smooth out the journey toward alignment.
Skill Development: With a new system, employees may need to learn new skills or adapt existing ones to effectively use the new technology. Change management activities help to identify skill gaps with a training needs analysis to inform the end-to-end training design effort. End-to-end training includes both the technical training on how to use the system and the “how we do our work” training on the processes supported by the technology. Change management helps employees acquire the necessary knowledge to successfully execute the new processes and adopt the new system.
Culture Shift: Implementing an ERP system can lead to a cultural shift that reshapes how an organization operates, particularly in terms of how work is done, cross-department or cross-functional collaboration, and decision-making processes. Add the complexity of multiple locations or a global rollout and effective change management becomes even more important. Managing this cultural transition includes promoting a shared vision, articulating current challenges and future benefits, fostering open communication, and addressing cultural barriers as they arise. Switch partners closely with the Project Manager and System Implementer to coordinate and align the work and to ensure that change management has a proper seat at the table with time allocated on project team agendas to ask questions, gather feedback (sometimes as simple as a temperature check), and allow others to share insights and questions within the team. This serves two purposes. It provides a safe forum for candid communication, context clarity, and feedback. It also better informs the communication and engagement planning work by revealing pain points and employee concerns more effectively.
Performance Monitoring: Change management doesn’t end with the launch of the ERP system. A critical post-implementation activity is performance monitoring, which may be overlooked in the organization’s eagerness to resume normal duties and disband the project team after a hypercare period. However, sustained success and adoption require ongoing monitoring and adjustment. Before the project team disbands, it is important to conduct regular feedback sessions (pulse checks) with end users and project team members, pinpointing areas requiring enhancement, determining necessary adjustments and continuing to communicate and engage with leaders and employees. This proactive approach builds an organization’s sustainability muscle and helps the ERP system stay aligned with organizational needs and continue to address the business objectives effectively.
A successful ERP implementation goes beyond turning on new technology. Understanding and managing employee resistance, aligning business processes and ways of working, upskilling and reskilling employees, supporting cultural shifts, and conducting performance monitoring are all integral parts of a successful ERP rollout. Proactively addressing these watchouts through effective change management strategies and tactics helps organizations better navigate challenges, foster employee buy-in, and ensure the system meets program objectives, paving the way for a smoother transition, faster adoption and quicker realization of the business benefits of the ERP implementation.
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