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Since emerging in the 1990s, the use of Enterprise Resource Planning (ERP) systems has now become common-place.
Unfortunately, realising these benefits can be a real challenge as ERP project failure is common.
Churchill’s ERP change management framework helps organisations put in place a structured way of dealing with the significant changes that arise from an ERP implementation. Many of the changes that arise from an ERP project will have a significant effect on the business and its people.
Delivering the right messages at the right time to the right people throughout the project is critical to bringing them along on the journey. Without having an understanding of the benefits an ERP project is endeavouring to achieve, it’s difficult to measure project success.
The implications of ERP project failure are many: wasted money, time and resources, poor staff morale, cultural damage, as well as interruptions to business operations and the ability to measure and improve performance. Mark Kosakowski founded Perimeter Business Solutions in 2005 to help small and medium size businesses with solutions that would simplify processes, make them more efficient and ultimately help them with growing their business. The problem, according to Michelle Vargas, a certified project management professional and consultant in Fort Worth, Texas, is that many companies fail to treat change management as a critical step in any ERP deployment plan. For starters, companies must invest heavily in the customization of an ERP system to suit their unique business needs and technical requirements. These days, there are countless change management tools and OCM (Organization Change Management) methodologies to choose from. For example, allowing employees to earn achievement badges, participate in online rewards challenges or enroll in a points system are all ways in which companies can encourage employees to learn more about a newly launched ERP system and how it’ll impact their everyday activities.Because of the stickiness of games, employees are far more likely to spend hours engaging while at the same time learning what they stand to gain from ERP. Ever since I began my career as a consultant, ERP vendors have worked hard to find that “silver bullet” selling point that will resonate with the market and catapult their product into the upper stratosphere of the industry. While these are all welcome and worthy trends among ERP software solutions, they are not going to make or break the success of your ERP implementation. However, if I had to pick one component that could potentially be that silver bullet, it would be organizational change management. Of the approximately 12 or 15 lawsuits that have retained us for independent ERP expert witness support, each and every one suffered from poor organizational change management.
Even among our own client base of 200+ organizations across the globe, those that invest more heavily in organizational change are much more likely to succeed than those that don’t. I have yet to see an SAP implementation, Oracle implementation or Microsoft Dynamics implementation succeed without effective organizational change. According to our 2014 ERP Report, 50% of ERP implementations experience a material operational disruption at the time of go-live, largely because of organizational change issues.
The problem with organizational change management, though, is that not many people understand what it is or what it means. While there will never be a silver bullet or magic formula for ERP success, organizational change management is probably the closest thing that you will find.  More than any other single area of focus, organizational change is the biggest predictor of ERP success. After 15 years of ERP consulting at large firms including PricewaterhouseCoopers and SchlumbergerSema, Eric realized the need for an independent consulting firm that really understands ERP. Sign up for our newsletter to have the latest ERP thought leadership delivered to your inbox every Wednesday morning. Today’s leading organizations understand that when expectations and performance are in lock step, the enterprise is poised for growth. The key to an effective enterprise solution implementation is a sharp focus on business requirements, organizational change and performance measurement. VIC’s methodology is an essential element in helping to keep ERP process performance in line with expectations.
VIC’s seasoned ERP professionals execute a core process overview to develop high-level, global and integrated business processes based on your organization’s strategic and operational needs. BearingPoint focuses on the measurement that facilitates change initiatives, such as leadership alignment, process improvements, organizational design and IT configuration. VIC makes your goals our goals by taking a results-oriented, execution-driven approach to realizing ERP benefits.

We work hard to understand and address your specific risk, compliance and security challenges in the most efficient and effective way—from the ERP build to post go-live. An ERP can yield significant benefits if implemented correctly, by standardising and automating transactional processes, eliminating non value-add activities, and providing greater insight into business performance. One of the most important – and often neglected drivers of ERP project success, is effectively transitioning the people to a new way of working and embedding this change at all levels of the organisation. Our framework is based around four key ingredients that can make an ERP implementation a much more appetising proposition. There will be changes in the way you are currently organised, with many roles impacted via the rollout of new processes. It should start way back at the project definition stage, with clearly defined and validated benefits, and a plan that sets out how they’re going to be realised. Given their scale and complexity, the flow-on effects from a failed project can be felt for years. Churchill helps businesses implement pragmatic change and project management solutions to their ERP projects that give them the best chance of success.
Partnering with Microsoft has given him the opportunity to provide niche solutions that empower his customers. Without a doubt, today’s high-priced ERP systems promise real-time insight into sales patterns, higher productivity and streamlined business processes. Change management is the formal process of convincing stakeholders to embrace change via training, making adjustments to business processes and ultimately winning support.After all, ERP projects impact every aspect of a business, from sales and marketing to inventory and merchandising.
But these expenses are only just the beginning.So too must companies be prepared to invest in employee training, systems integration and customization in order to reap real value from their ERP implementation.
Prosci, IMA, IBM, SAP – they’re just a handful of vendors offering tools that enable companies to prepare for, manage and reinforce change.But while they can help companies stay the path, Vargas warns of the danger of getting too caught up in templates and frameworks. Examples of the current silver bullet flavors of the day include mobility, SaaS, cloud, analytics and software best practices.
In fact, no one feature, function or tool is going to determine the success or failure of your project.
More specifically, I would take a mediocre software solution with excellent change management long before I would consider an awesome software solution with a mediocre focus on the people aspects of a project. For many, it is a touchy-feely proposition that has nothing to do with their ERP implementations. In order for any ERP project to succeed, your executive team and key stakeholders need to be aligned and bought into the project. Perhaps one of the most underrated parts of ERP implementations is addressing the “readiness” of the organization to change. Although every single person in your organization will be affected differently by your new ERP software, there is one commonality: everyone will be affected in some shape or form. In addition to communicating specific organizational changes to employees, your communication program should also cover the what, why and how of the project.
In addition to poor employee communications leading up to end-user training, another common flaw with ERP training programs is that they often are not customized for the organization. He began his career as an ERP organizational change management consultant and eventually broadened his background to include implementation project management and software selection. To achieve breakthrough performance, organizations often look to high-powered enterprise solutions—including enterprise resource planning (ERP) platforms— to reach internal and external goals. This overview examines the crucial touch points among business units and departments and helps your organization identify high-level corporate performance measures and targets.
By integrating benefits realization at the start of your ERP implementation, we can help you create a sound organizational plan and work that plan throughout the process.
To drive process performance, we integrate benefits realization at the start of an ERP implementation. Not only does proactive change management increase the chances of an ERP project being completed on time and on budget, it helps to manage the perceptions people have of the project, as well as limiting any speculation or uncertainty swirling around the corridors. It is important to recognise that the severity and type of change should be assessed across a number of elements, for example key operating units and even other IT systems.

Early engagement with stakeholders is critical, and although face-to-face meetings require a large investment of time, they can’t be beaten to achieve maximum impact.
A training schedule should be developed around the key learning gaps, and training materials tailored to the most critical elements of the system. Once the system goes live, the name of the game becomes all about realising the project’s benefits, and making sure there is an ongoing process for tracking and monitoring them. Companies that neglect to prep their employees for these enterprise-wide transformations are likely to encounter resistance. There are simply too many variables and moving parts in an ERP implementation to suggest that any one of these components will push your project across the finish line of success. Others view it as a nice-to-have that is a lot more complicated than the “just do it because I said so” approach to change. In fact, one could argue that this is the single most important component of organizational change since so many other critical success factors are dependent on this element.
Many executives subscribe to the “they’ll change because we told them to” school of thought – which is wildly ineffective.
The key is to identify the exact nature of the changes, communicate those to employees in a targeted and personalized fashion, and repeat those messages until you are blue in the face. In addition, employees need to hear specifically how their business processes and responsibilities are going to change. While ERP vendors provide solid boilerplate training materials to use as a starting point, it is not going to be relevant to your employees unless you customize to meet the specific business processes and roles and responsibilities of each of your employees. Eric’s background includes extensive ERP software selection, ERP organizational change and ERP implementation project management experience. If the overall ERP structure, process or mission changes, the initial configuration and approach—as well as reporting and security requirements— will need to change as well, and benefits realization targets must be readdressed. In addition, at the micro level, we detail each process flow by function, identify operational performance measures that link to corporate performance measures, and assign specific ownership and responsibility.
This allows your organization to plan for desired results and work through that plan by focusing on business processes and key performance indicators. Once the training activities are underway, mechanisms must be put in place to measure delivery success and the rate of business adoption. In fact, a recent Panorama Consulting report reveals that 38 percent of respondents cite lack of employee buy-in as the biggest problem facing ERP project teams. In nearly every company we work with, we see at least one executive or stakeholder that is not on the same page with the goals of the project or is working against the project in some fashion, so this activity is critical.
It is more effective to measure and identify the root causes for organizational resistance. These changes are most easily facilitated by conducting a gap analysis between your “as-is and to-be” as part of your business process reengineering efforts. Another rule of thumb: the goal for your communications program should be to ensure that your end-user training is a non-event. Throughout his career, Eric has helped dozens of high-profile and global companies with their ERP selections and implementations, including Kodak, Samsonite, Coors, Duke Energy and Lucent Technologies. Nineteen percent identified a lack of project resources while only 10 percent indicated lack of project budget as their biggest challenge. Instead of springing process changes on your employees for the first time during training, these sessions should be used to reinforce the details of how employees will conduct new business processes that have already been communicated to each of them seven times or more throughout the project.
It should also cover things like what processes and decisions need to happen outside the system, specific roles and responsibilities of people within your organization, and metrics used to run the business. In addition to his extensive ERP experience, Eric has also helped clients with business process reengineering, merger and acquisition integration, strategic planning and Six Sigma initiatives. A series of online surveys and focus groups will yield huge returns in the way of providing a clear vision for how employee acceptance and other organizational issues can and should be addressed to ensure a successful go-live.

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