There are many factors that lead to successful digital transformation. The chosen ERP solution must have the right capabilities, the system configuration must support the needs of the business, and the processes put in place must align both with the business and with industry best practices.
But even more critical than the right technology and processes is effective organizational change management. No digital transformation will succeed without it, even if the tech and planning is there.
Change management is absolutely key, and it is a central component of digital transformation and an effective ERP rollout.
New processes and capabilities only make a difference when employees understand and buy into the changes, because change is hard. Sally in payroll will resent and subvert new workflows and technology when the reasons for those changes don’t clearly make sense and ultimately support her and her job function.
At best, digital transformation without organizational change management creates resistance and resentment as new tools and workflows are pushed onto employees. At worst, it also institutes systems and tools that are out of touch with the actual needs of the business because changes have been made without the full involvement of those on the front lines.
“Change management is really about aligning the people with the processes and the system,” notes Ralph Hess, executive vice president at Navigator Business Solutions, who often stresses the relationship between change management and ERP solution success.
Key decisions are still defined at the executive level, he acknowledges, “because those decisions have to align with strategy and the vision of the business that was started."
But there also needs to be employee input early and often, and buy-in.
“As part of the project,” he says, “there's a critical element of making sure that people are understanding the product charter, the vision of the executive team, and how we need to execute to align the people with the processes.”
So how do you make this key alignment during digital transformation? There are seven hallmarks.
Change management should be part of the ERP implementation roadmap. Not only should you have a plan for the process needs, the functionality requirements, and the phases of a rollout, you also should have a structured plan for managing employee adoption and change management.
This should include a stakeholder analysis to ensure that all key stakeholders are involved, and a current state analysis that outlines how work is performed before a new system is implemented. The plan should also include the new ways that processes will operate, a check-in schedule and metrics for ensuring that employees are on-board and using the new system, and an opportunity identification assessment for tying your digital transformation project into larger goals and policy changes at the company.
Employee adoption and buy-in comes from processes that actually support employee activity and are buttressed by advocates within each department who are promoting these changes.
Identifying and engaging key stakeholders throughout the company during the planning phase helps ensure that the new ERP solution is fit for purpose and meets the workflow needs of a given department. It also then seeds change management advocates throughout the organization, which can help with employees embracing this new way of working.
Nobody likes change, but almost everyone likes improved work conditions. So one of the most essential keys for ERP change management is effectively communicating how these new tools and processes ultimately make life easier for a given employee.
When explaining change and the new way that work will be performed as part of the organization’s digital transformation, customize the messaging to the needs of each department and emphasize how work just got easier. Advocates within the company will play a significant role in identifying the benefits for each employee job function.
ERP and digital transformation isn’t a tech project, it is a new and better way for conducting business.
Build excitement for this by updating employees early and often about the state of the project and its expected advantages. This way employees will understand that change is coming long before they must adjust their processes, and they can even look forward to the new processes when they are tied to workflows that make life easier.
This messaging comes from advocates seeded throughout the organization, but it starts at the top. By having updates both from the C-suite and departmental managers, employees will understand that this is an important organizational priority supported by leaders throughout the company.
Any new ERP solution will alter how employees perform daily tasks. That’s the point. But it requires training and guidance as employees learn and adopt these new workflows.
Plan and allocate sufficient resources for onboarding employees to the new systems and workflows. This should include group training sessions, manuals and cheat sheets for using the system, and clear post-implementation support so employees know where to turn when they don’t remember something from the training.
Establish metrics for this onboarding process as well, and periodically test to ensure that all employees truly know how to use the system properly.
There will be a natural tendency by some employees to revert back to what they knew before, even when there’s fundamental buy-in. Change and the new processes must therefore get embedded into the culture of the organization so there’s no going back.
As part of the ERP change management process, develop new structures, controls and rewards that recognize and sustain the change over time. With a culture that stresses change and the new processes, employees will more likely adopt the new workflows and the ERP solution overall instead of going around it.
The work is not done after an ERP solution has been rolled out and employees have been trained on the new processes. Employees will forget things, and slip into old patterns. New employees will join the organization and need both training and support. There will be new functionality and processes that evolve over time within a company as well.
So as a final piece of change management and onboarding employees, there should be a well-established schedule for ongoing training on the processes and the system overall. This ongoing training schedule should be established during the implementation process even before rollout.
A cautious wolf respects the pit, to paraphrase the Roman poet Horace. One of the most important pitfalls to avoid during digital transformation is poorly executed change management.
We can help you skirt around this danger during ERP implementation and successfully achieve digital transformation.
For guidance and help, contact one of our experienced ERP consultants by calling (801) 642-0123 or writing us at info@nbs-us.com. We’ve been helping businesses digitally transform for more than 30 years as an SAP Gold Partner, and we can help your business too.