Last month, we released our highly anticipated 2014 Organizational Change Management Report summarizing the data points related to the people side of ERP implementations completed within the last year.
Unfortunately, the report revealed that organizational change is still one of the most overlooked and neglected part of ERP implementations. While our 2014 ERP Report outlines some of the general challenges experienced by organizations installing new ERP systems, our OCM report digs into some of the root causes of those challenging symptoms.
For example:
- Each and every organization in our study (100%) experienced some sort of material operational disruption at the time of go-live.
- 60% of organizations experienced operational disruptions of one month or greater after go-live.
- 50% cited organizational change management as the primary issue causing those operational disruptions.
Digging into those discouraging net results, our study revealed that 63% of CIOs, CFOs and ERP project managers classified organizational change and “people issues” as being either difficult or very difficult to navigate throughout their implementations. And if you’re thinking that the other 37% must have found it easy, don’t get too excited – 35% were merely “neutral” on the topic and only 2% of respondents found organizational change management to be easy or very easy.
However, there is some good news. Over the last year, we have seen a slight uptick in organizations dedicating a “moderate” amount of focus to organizational change management. Our research has shown organizations investing in an organizational change management plan increasing to 57% from 48% just last year. Although this improving number is partially mitigated due to the number of those organizations dedicating little to no focus also increased from 27% to 32%. With that said, it is encouraging to see more organizations increasing their attention to this important critical success factor.
With these mixed results in mind, what can we do to ease the challenges of poor organizational change management? Here are a few things to keep in mind to help ensure a successful ERP implementation:
Build a solid organizational change management plan. Effective organizational change and employee adoption of your new ERP software starts with a strong change management plan. Make sure to look well beyond basic end-user training and communications to include all of the organizational change best practices and tools at your disposal. For ideas in this area, refer to our on-demand webinar overview of organizational change management best practices.
Devote at least as much time and resources on organizational change as you do on the technical aspects of your ERP implementation. It’s easy to invest heavily in the technical aspects of your implementation because you can touch and see the ERP software being developed. Organizational issues, on the other hand, are more difficult to detect until it is too late. Even though the people side of your implementation seems intangible, make sure you’re devoting as much time on these issues as you are developing the software – if not more.
Under no circumstances should you gloss over organizational change management. Most clients we work with have what they believe are good reasons to not spend much time or money on organizational change. Some think that they’re too simple to require this discipline while others have the false impression that their people will change simply because they are told to. Whatever situation makes you think you may be an exception to the norm, be sure to understand that it is a flawed assumption.
If you would like to learn more, check out our 2014 ERP Report: Organizational Change Management.