An Experts Guide to ERP Success

By Eric Kimberling, Managing Partner Panorama Consulting Solutions

Chapter 6. Organizational Change Management

As any project manager worth his or her salt knows, one of the critical success factors for effective ERP projects is organizational change management (OCM). But what exactly is OCM, and what key activities should you include in your project plan? OCM means a lot of different things to different people. It is a broad topic that encompasses everything from ensuring employee buy-in to organizational design to communications and training. It might include cultural assessments, organizational assessments, steps to ensure executive alignment and so on. While certain OCM tactics are beneficial to any organization undergoing an ERP implementation, the scope is truly determined by the specific needs of the company. A distressingly common reality of ERP projects, however, is that there typically is not an unlimited budget or resources to implement a huge amount of change management activities. Leadership will sometimes become too focused on the technological aspects of the implementation and pay far too little attention to the people side. The effects of this short-sightedness can be disastrous. But while OCM is very important to successful IT projects, some aspects of change are more important than others and have a more immediate impact. At the start, Panorama consultants typically advise focusing on organizational change activities that will have immediate (and long-lasting) effects on the business and the success of its ERP implementation. Steps include: Define your as-is business processes for each location, as well as what the to-be operating model will be across locations. As previously mentioned, this is an opportunity to standardize your operating model, if it isnt already. This documentation will also help you identify how your organization and processes will change after ERP implementation. Define key stakeholders and change agents from each functional area to ensure you have sufficient involvement and representation. These people are instrumental in helping to identify change activities that will work for their specific locations or departments as well as implementing business process and organizational changes. Define performance measures for each functional area and link them back to your high-level business case and ROI analysis. This will operationalize your business case and assign accountability to people in each department to ensure you realize measurable business improvements as a result of ERP implementation. Nothing motivates like metrics! Measure baseline pre-implementation measures and define performance targets to quantify how ERP software will improve your business. Just as importantly, plan to conduct a post-go-live audit to measure performance after your implementation to ensure that you are realizing your projected business benefits. If the numbers arent positive, reexamine organizational change management activities. Identify the impacts that ERP software will have on employees jobs, and develop a change management plan, communications strategy and training program. Ensure that you take into account the entire organization and have clear tactics laid out for those employee groups that will have the largest impact on the success or failure of the ERP system implementation and subsequent usage.

While the benefits of new business software may be a no-brainer to executives, it isn't always as clear to employees especially those who have developed their own processes to get their work done and/or have enjoyed minimal oversight. These employees can, and often do, view the implementation of ERP software as a
Page 1 of 14 3773 Cherry Creek North Drive - Suite 720 - Denver, CO 80209 720-515-1377 Panorama-Consulting.com Copyright 2012 Eric Kimberling. All Rights Reserved.

very clear threat and will react with a fight or flight mentality. Therefore, OCM is critical to a successful enterprise software rollout. If your leadership team is on board with the importance of change management, then youre already one step ahead. In our ongoing research of ERP implementations across the globe, we found that nine things separate best-inclass enterprise system initiatives from those that fail. Of those nine failure points, six of them are either directly or indirectly related to OCM. See if you recognize the six sources of ERP failure that are mitigated by an effective organizational change management strategy: 1. 2. 3. 4. 5. 6. 7. 8. 9. Lack of purpose for implementing ERP Not going into the project with eyes wide open Lack of executive and management buy-in Not leveraging internal and external A-Team resources Not choosing software that is aligned with key business requirements Misalignment between software configuration and business processes/workflows Lack of effective training Weak internal and external project management Underdeveloped business case to manage business benefits

With the exception of items four, five and eight, OCM activities can positively impact everything on the above list. Given how much of an impact OCM has on a projects success or failure, its still surprising to see just how many organizations think Oh, well just tell them to use the system what choice do they have? The answer is staff members have plenty of choices from subtly undermining the value of the system and the choices of the C-suite to actively seeking workarounds to flat-out refusing to change their processes. Any of the above can be disastrous, but a combination of all three across the workforce can completely ravage ROI on the ERP initiative. OCM and Business Performance Improvement Any successful OCM project should be developed hand-in-hand with the business performance improvements made possible by the implementation. Business performance improvement demands that your core business processes are optimized for efficiency and aligned to company goals. This ensures maximum visibility and control, while also producing immediate and lasting improvements. Optimized and Aligned Processes Require: Processes aligned to strategic focus and goals Quantified business value Positive productivity impacts to drive top-line revenue and cost reduction Customer value and service focus Technologies that drive critical process with automated workflows and integrated data that support increased throughput, consistently high-quality delivery, and timely and effective decision-making

Page 2 of 14 3773 Cherry Creek North Drive - Suite 720 - Denver, CO 80209 720-515-1377 Panorama-Consulting.com Copyright 2012 Eric Kimberling. All Rights Reserved.

Enabling Technology Means: Designed to identify and improve process capability Selected on the basis of business value Staged for execution in rapid ROI phases Focused on customer value and productivity gains via data and workflow integration

A High-Performance Organization Encompasses: A process-based, vertically and horizontally aligned goal system Optimized organizational structure and authority relationships Fact- and accountability-based performance management Clear understanding of company direction and goals Coordinated and focused action across functions and levels Leadership that incorporates structure and incentives to reliably generate high performance

From an OCM standpoint, the value of changes to business processes must be clearly communicated at all levels of the organization. Will the new processes speed growth? Will they make employees job functions easier? Will they increase profit? When crafting change management communications regarding the processes, remember to address both Whats in it for me? and Whats in it for the company? for each functional area. Why OCM is So Important to the Success of ERP Implementations Although it is one of the key success factors for any ERP implementation, OCM can be difficult to quantify and rationalize. Each year, Panoramas annual ERP Report shows the impact change management (or the lack of change management) can have on an organization. Though slightly dated, its still important to note the following metrics from our 2010 ERP Report (available online at Panorama-Consulting.com): Over 40-percent of organizations are dealing with significant change concurrent with a new system rollout. An ERP system rollout alone will impose significant pressures on an organization and its resources. Throw in other changes, such as a new CEO, acquisition of another company or even layoffs, and that change can be the straw that breaks the camel's back. Over 40-percent of companies implementing ERP software are dealing with either a new CEO or the addition of new office locations. In addition, 26-percent experience a merger or acquisition around the same time as their ERP deployment, while 19-percent go through layoffs. The magnitude of these changes make the implementation of a strong OCM program in conjunction with the ERP system implementation even more imperative. People do not adapt well to change and organizational communication is weak. More than 53percent of implementing organizations assess their own ability to deal with change as fairly poor or very poor. In addition, 47-percent say communication between management and employees is poor. These types of environments are not conducive to effective ERP implementations. OCM strategies and tactics, however, help address these organizational risks and barriers to make the rollouts more successful. More than 60-percent of organizations suffer from poor visibility to data and poor integration in their old systems. This finding suggests that employees using a new ERP system have strong organizational resistance and a steep learning curve to overcome. Poor integration between functional areas in the old system was cited by 64-percent of organizations as a driver for a new system, followed by poor visibility to reports and key operational data at 62-percent. These metrics underscore the
Page 3 of 14 3773 Cherry Creek North Drive - Suite 720 - Denver, CO 80209 720-515-1377 Panorama-Consulting.com Copyright 2012 Eric Kimberling. All Rights Reserved.

magnitude of change that a single, integrated enterprise software system such as ERP or CRM will entail. An effective OCM plan is critical to help employees understand and leverage the improved operational visibility in the new system. Organizations expect a lot from their ERP systems. Despite the organizational challenges outlined above, companies expect their enterprise software systems to deliver real business value. Sixty-nine percent of companies expect their systems to improve business performance while 39-percent expect systems to standardize business operations and 39-percent expect systems to make employees' jobs easier. Not to be the bearer of bad news, but our experience and research shows that these goals simply don't happen without effective OCM. Most companies are not yet ready for the organizational changes of ERP software. Perhaps most alarmingly, a majority of companies are not ready to address the people, process and benefits realization aspects of their enterprise software implementations. Nearly 50-percent of companies in the process of implementing ERP software have not yet started their organizational change, training, or communication plans. In addition, 42-percent have not developed a business case or ROI analysis, which suggests companies are not ready to measure and manage the business benefits they expect to achieve. All of these areas need to be addressed prior to an effective implementation, which does not bode well for a large number of companies.

So what are the lessons learned from this benchmark data? Its clear that OCM is one of the key reasons why companies succeed in their ERP initiatives, while lack of OCM is the reason behind most failures. Success or failure has very little to do with software, which is why organizations need to carefully plan and allocate project resources to effectively include OCM activities as part of their enterprise software initiatives.

Managing Change Locally and Globally

Over the course of hundreds of ERP software selection, implementation, recovery and benefits realization projects, Panorama has identified the following steps to help organizations address cultural obstacles in their ERP projects: Conduct a cultural and organizational readiness assessment across all of your departments and geographies that will be impacted by the implementation. This can be done through a combination of online surveys and focus groups and should be repeated several times over the course of the project. These assessments help leadership identify pockets within the organization that are the most change-averse and will require the most organizational change management attention. This information facilitates the building of an organizational change management, cultural change and communications program to address the problem areas. Implement cultural change activities. Your companys culture took a long time to get to where it is, so it will take a long time to change it. However, based on the findings in the above step, there are things you can do to have an immediate impact and start to remove cultural obstacles to change. For example, if there is historically an adversarial relationship between employees and management, it may be helpful to develop collaborative management and employee teams to help define to-be business processes during the early phases of the ERP project. Or, if you have found that employees do not feel empowered to make key business decisions, you may want to take key employees and put them in positions with decision-making authority. Obviously, these activities are easier said than done, and how you change your culture depends on your unique situation, but the point is that there are ways to have an immediate and very effective impact on reducing cultural obstacles to change.
Page 4 of 14 3773 Cherry Creek North Drive - Suite 720 - Denver, CO 80209 720-515-1377 Panorama-Consulting.com Copyright 2012 Eric Kimberling. All Rights Reserved.

Ensure that you have a solid organizational change management program in place. OCM is much more than just training. You should ensure that you are holding regular workshops with end-users and management, involving them in process and organizational design workshops. Formal communication keeps users informed of the purpose of the project, your progress, why you are implementing the ERP system and so on. We always tell clients that organizational change management is more important than the software selected. Many will argue, but no one can deny the importance of change management. Develop an implementation and roll-out strategy that fits your culture. Weve seen too many clients try to slam in an ERP system in as little time as possible. What these companies inevitably discover is that this type of organizational pressure amplifies cultural obstacles that have always been in place. For example, if company employees feel like managers dont value their contributions, this belief will be confirmed when they find out at the water cooler that they are suddenly going to have to start using a new IT system. Spending the time to address cultural obstacles and to develop an implementation plan that considers these needs helps minimize the obstacles inherent in any project of this magnitude.

The Role of Change Agents A change agent is the direct liaison between the technical project team members and the end-users. The change agent understands the new business processes being implemented and the impacts of those processes to the business. The role needs to be a formal role, both explained to and recognized by the end-user population. Without formal definition the role may be confused or overlooked and will not be able to provide the needed support to the ERP project. A change agent is an experienced employee who is considered at or near super-user status of the current system. He or she is a highly influential employee and is respected by peers. Change agents make great trainers and most importantly, they are good communicators, progressive thinkers and focused on continuous improvement. There is a delicate hand-off between technical team members and change agents. The technical team is greatly involved in understanding the business requirements, designing new business processes and configuring and testing the system. The change agent accepts the newly designed business processes and focuses on socializing the new process, obtaining buy-in and training users if required. Too often we see chaos just prior to go-live with technical team members scrambling to complete testing, approving and possibly even creating training documents. With a team of change agents on board, the technical team can stay focused on the technical aspects of the system while the change agent introduces, promotes and delivers the new ERP system and processes to the end-users and stakeholders. With change agents in place, the technical team members will never be faced with competing priorities and the end-users will be introduced to the new ERP system in a timely and strategic manner. OCM Tips for Global ERP Software Implementations OCM is one of the most important success factors for any enterprise software initiative, but it is even more critical for global ERP software implementations. Issues related to cultural differences, inter-office politics, language barriers, and organizational complexity magnify challenges such as employee acceptance of redesigned business processes.
Page 5 of 14 3773 Cherry Creek North Drive - Suite 720 - Denver, CO 80209 720-515-1377 Panorama-Consulting.com Copyright 2012 Eric Kimberling. All Rights Reserved.

A coordinated global OCM initiative can help alleviate some of these risks. Panorama has helped manage organizational change for enterprise software initiatives for numerous multi-national companies such as Samsonite, Kodak and Nufarm and weve learned many lessons along the way. Below are ten tips to address the organizational complexities of a global ERP implementation: 1. Business process standardization. Companies with global offices, and in particular those with locations acquired from another company, often have non-standardized business processes. A global enterprise software implementation provides an opportunity to standardize processes across locations, but it can be very challenging to make that change happen. OCM is crucial to overcoming such challenges. 2. Understanding of local needs. Standardization is important for optimizing ERP benefits and achieving a positive return on investment. On the other hand, it also is important to ensure that the standardized operational model of the new system will accommodate local needs. Even if every local need or want is not addressed via the new system, listening to individual concerns goes a long way toward securing employee buy-in and support for the new system across the globe. 3. Understanding of local requirements. Global changes that are pushed to the local level by corporate headquarters often do not adequately consider local requirements. Each country has its own regulatory, resource and employee constraints, so it is important to plan accordingly when implementing the changes. Obviously, completely localizing a global initiative defeats the purpose of having a single global change, but no matter how well-designed a solution, it is simply not going to work perfectly for 100-percent of the world. 4. Localized delivery of employee communication and training. Not everyone will speak the preferred language of your corporate headquarters, so it is important to communicate and train in the language most appropriate for each location. We have worked with many multi-national (and even domestic) companies where management and key team members speak one language and the lower-level employees another. New ERP software takes enough time to learn without language barriers, so translation of key messages and training will typically pay dividends in the long run. 5. Reliance on your change agents. Each major office should have a local representative that acts as a change agent for the project team. These change agents typically represent the local interests of their offices, validate how standardized business processes will work with their location and communicate key process and organizational changes to their respective stakeholders. This employee representation is key to a successful implementation. 6. Leveraged performance measures. Performance measures transcend language and culture in a way that everyone can understand. They should be used to quantify the results you expect to achieve from your ERP software investment and detail how each local office is expected to contribute to the improvements. Measuring and rewarding managers in areas that will be enhanced by the ERP or IT implementation is a great way to ensure they collaborate with other geographies and functions to make decisions that are best for the company. This should be part of a larger performance measurement and IT benefits realization strategy. These measures also are important in identifying opportunities to improve results after go-live. 7. Culture and values. Not all people in the world value or are motivated by the same things. For instance, many western European countries value history, tradition and work-life balance, while many developing Asian countries value hard work, entrepreneurship and teamwork. Managing change in these very different environments requires differing approaches and messages.
Page 6 of 14 3773 Cherry Creek North Drive - Suite 720 - Denver, CO 80209 720-515-1377 Panorama-Consulting.com Copyright 2012 Eric Kimberling. All Rights Reserved.

8. Propensity for change. More established and developed countries have business operations that have worked well for a long time, while many developing countries have less mature operational models. Therefore, it is often common to see more resistance to change in developed countries versus emerging ones. For example, a small company in India that is struggling to keep up with new demand with a very limited staff and manual processes may be more welcoming of an operational improvement than a large office in the UK that has refined its operational model and implemented automated processes over a long period of time. On the other hand, the small office in India may have fewer employee resources to assist with a change effort. 9. Varying degrees of understanding of best practices. Employees in different countries have different levels of understanding of business and technical best practices and methodologies, which may affect the amount of change management required to sell the ideas to affected employees. For example, employees in eastern Europe may be less likely than Americans to understand the value and benefits of Six Sigma or business process management methodologies, which would likely increase change management effort. 10. Buy-in is important. This is true for domestic ERP projects, but it is even truer for global initiatives. Involving a broad geographic and functional cross-section in the planning, process improvement and implementation activities early in the process will help identify and address some of the issues mentioned above. It also helps overcome potential pockets of resistance by ensuring that employees across the globe are involved in the decision-making and planning surrounding the particular change and feel a sense of pride and ownership in the project on a whole.

Resistance
Overcoming an Organizations Resistance to ERP and Change Its commonly perceived that people in general dont like change, and ERP involves quite a bit of change. So that alone may explain why resistance to change is so common in ERP projects. Below are some key activities that will help minimize this type of resistance to change: Identify change agents early in the project. As mentioned above, these should be people that know the business well, embrace change and are well-respected in the organization. This group of people, which should represent all the functional areas affected by ERP, will serve as champions of the project. They will also be key in helping other employees understand and learn the value of ERP and how it affects their jobs. Train, train, train. Very few disagree that training is important. The problem, however, is that many projects tend to focus on training users how to use the new system prior to go-live. While this is certainly important, it does not address other issues such as how key business processes will be affected by ERP. In addition, not enough companies take advantage of making training tools (such as online help, refresher training, etc.) accessible for employees after go-live. Involve employees in the ERP process. The more involved employees are in the ERP decision and implementation, the more ownership and buy-in they will have into the project. This is not to say that every single employee should be involved. However, involving more employees than just senior management in the decision and implementation planning process will go a long way to make people feel more ownership, which inevitably results in less resistance in the future.
Page 7 of 14 3773 Cherry Creek North Drive - Suite 720 - Denver, CO 80209 720-515-1377 Panorama-Consulting.com Copyright 2012 Eric Kimberling. All Rights Reserved.

Over-communicate. There is no such thing as communicating too much with employees. The more they know about why your organization is selecting ERP, how it will benefit the company, and what it means to them and their jobs, the less likely they will be to resist the changes when they are implemented.

Change Leadership vs. Change Management We are currently working with a client that is experiencing a common but unexpected challenge as they implement a new ERP software solution. The ERP implementation is organized with a senior team functioning as a Steering Committee. Reporting to them are the project manager, our consultants, a Core Team and endusers. The implementation was preceded by an ERP selection project that focused on the business requirements and the business case for the ERP implementation. Most of the members of the Core Team played a part in the ERP selection process in one capacity or another. Now that the ERP implementation is underway and the heavy lifting has begun, the organization is experiencing some resistance within the ranks that needs to be addressed. The interesting element of this resistance is the source the Core Team. The expectation is that the Core Team would be the most intimate and committed members of the whole ERP implementation effort. Most of them were closely involved in the ERP software selection process. However, now their initial enthusiasm for the project has evolved into several forms of resistance. Sources of ERP Resistance The reality of their required commitment for completing the project The amount of their resources that need to be deployed on the project The difficult functionality decisions that have to be made, with the accompanying compromises Their own competing personal agendas

Critical Success Factors (CSFs) for Change Management Truth Accountability Leadership Engagement Alignment

These CSFs also apply to change leadership. The subtle but significant difference is that in change management we focus on what must be done to make the users of the ERP software successful with the new tools. Change leadership focuses on supporting all of the participants in the change management process. The project manager and project lead need to address this and still deliver an on-time and on-budget ERP implementation. The Steering Committee wants to provide support and wonders what to do. Here is what we have suggested: Lead by example. In addition to communicating the priority of the ERP implementation, show it. A decision was made to suspend one of the quarterly tasks that required a lot of time from the Core Team. The reason communicated was that right now the ERP project is the priority and the Steering Committee recognizes the Core Teams resource challenges.
Page 8 of 14 3773 Cherry Creek North Drive - Suite 720 - Denver, CO 80209 720-515-1377 Panorama-Consulting.com Copyright 2012 Eric Kimberling. All Rights Reserved.

Support the champions. Vocal, public acknowledgment of the work being done on the project by the Core Team is tangible reinforcement of the priorities. Challenge the undecided. Calling out the Core Team members constructively in the meetings (not in public) will reinforce their accountability to the Steering Committee and each other. Promote accountability. Be crystal clear with every member of the Core Team regarding choices and consequences. If there is responsible dissent about a deliverable or deadline, get it out on the table for debate in the meetings. Work the discussion to hammer out the best answer. Once a decision has been made, make sure everyone understands the shared commitment to it. The debate is over. Now, clearly explain the expectations. Get everyone possible on board the train because its leaving the station. Following the prior point, the consequences of not delivering should be clear. Managing dissent constructively is a great way to create a much higher performing team. This approach might be new, and it might be uncomfortable, but it is this clients reality and should be seen as an opportunity.

Other lessons learned from the situation: Do not let yourself get painted into a corner by early communications. One factor contributing to this situation was the premature and ill-advised comments made by a senior team member in a public forum regarding the project. His comments were truthful (at the time) and open, but they were ultimately problematic because they were unguarded at a time when caution would have been helpful. One thing led to another, and all of his other comments were lost in the storm that focused on one response to a question. His response was not a policy statement. It wasnt the declaration of a formally decided business decision. It was a well-intended, but premature reply to a legitimate question. As they say, hindsight is 20/20. We would all like to have that one back. The law of unintended consequences has not been repealed, so as seductive as the opportunity to tell it like it is might appear resist it. You can always say more later. Do not automatically resolve to say absolutely everything. There are appropriate limits to what should be shared in almost any communication. Some communications should be limited in the interest of certainty, fairness or discretion. It is not wrong to be sensitive to the impact of comments that will cause concern, anger or fear. When difficult information needs to be shared share it thoughtfully, with balance and solutions. Do take the long-term view. One thing that we have learned is that sooner or later the truth always comes out. Always. Sooner is usually better than later, and truth is always better than any deviation from it. But sometimes sooner is not the right time to share everything. There may still be uncertainties, unforeseen changes, options, alternatives, etc. Still, the dilemma is how to be sure, after all has been said and done, that you were on the side of truth. A mentor once told me, If you always tell the truth you dont really need a good memory. Empathize honestly. Bad news is a part of life. People who are on the receiving end of bad news seem to react much better when they believe that they heard it from someone acting in good faith. So, resolve to speak as though you were the person most negatively affected hearing the news. None of us with any amount of life experience should have too much trouble empathizing since we all have been there at some point.
Page 9 of 14 3773 Cherry Creek North Drive - Suite 720 - Denver, CO 80209 720-515-1377 Panorama-Consulting.com Copyright 2012 Eric Kimberling. All Rights Reserved.

Do the right thing. If what is needed is a retraction retract. If an apology apologize. If an explanation explain already. This is not just damage control; it is the rebuilding of trust.

Training and Communication

In any ERP implementation, it is generally understood that training is a key component of organizational change management and of the overall success of the ERP implementation. However, there is a distinct difference between training and effective training. ERP training programs often erroneously focus on transactional training. ERP software companies and implementation teams are generally good at creating documentation and delivering training that teaches people how to complete transactions in the system. However, running a business entails much more than merely completing transactions within a software program. Instead, ERP training programs should be built using the new business processes as the foundation. In fact, the software itself is relatively irrelevant to these types of training programs. Granted, ERP software is an enabler of new business processes, but the software should certainly not be the exclusive focus of a pre-golive ERP training program. Conversely, these training programs should teach employees how to perform their business processes and workflows in the new environment. It is important for ERP training programs to deliver knowledge in the context of how employees perform their day-to-day jobs, not simply how to complete transactions in a system. For example, transactional training might focus on how to create a purchase order (PO) in a system. While this transaction is important to understand in a new system, it does not address the business rules behind the PO: who will approve it, what will happen after the PO is approved, how orders are received against the PO, etc. It is these business processes that employees need to understand for maximum efficiency and buy-in, not just the technical transactions in the system. ERP project managers can go a long way toward making adoption easier if they focus on effective business process and workflow training, as well as ERP transactional training. This type of process-focused training should be a centerpiece of any ERP OCM program.

Page 10 of 14 3773 Cherry Creek North Drive - Suite 720 - Denver, CO 80209 720-515-1377 Panorama-Consulting.com Copyright 2012 Eric Kimberling. All Rights Reserved.

The Importance of Communications Employee communications is just as important as training. Throughout the deployment, employees should be apprised of the status of the project, as well as how and when the rollout will affect them. Employees should know when they can expect to be trained, when they will be expected to convert to the new system, and what tools they will have at their disposal should they have problems or questions. Perhaps most importantly, employees from each workgroup should be informed about how their business processes and day-to-day jobs will change. These types of employee communications go a long way to help alleviate the anxiety and confusion of an ERP rollout. In addition to communicating with employees, it is important not to overlook other key stakeholders. For example, customers and vendors also need to prepared for what to expect from your ERP project, especially if you are involved with a high-visibility organization or ERP implementation. What precautions are being taken to ensure customer deliveries arent delayed? Are there changes to the ways orders will be processed? What are the benefits that these changes will bring to the supply chain? These are just a few examples of items that should be proactively defined and communicated with customers and vendors. Last but certainly not least, it is crucial to keep your executive stakeholders informed as part of your communications plan. What is the status of the project? What are the major risks and risk mitigations in place? Where do you stand on budget vs. actual dollars spent? Regular updates and meetings with key executives must be incorporated into your projects communications plan. Many of the above items should be handled by the change agents or the OCM lead to ensure there is focus on these important activities. These communications are critical to an effective organizational change and ERP benefits realization plan and should be carefully considered during your ERP planning efforts. The Incredible Shrinking Scope of ERP Training If good ERP training has a direct correlation with prepared and engaged employees (a requirement for maximizing productivity during go-live), why does the Incredible Shrinking Scope of ERP Training phenomenon happen? What can be done to mitigate the powerful forces that squeeze training into whatever timeframe happens to be available between finalizing the system testing and the go-live date? Its a simple fact. The ERP system is the priority of the ERP project. However, the humans that use the system must be prepared for the new processes and transactions needed to continue operations without disruption. All too often, the users are on the short end of the deal when an ERP project exceeds any of its deadlines. Trainers and users are required to work faster and for longer hours, and to prioritize as needed to meet the project deadline. Theyll just have to get it done in less time. So what is the common result of this adjustment? Five Results from the Incredible Shrinking Scope of ERP Training Training end-users on an ERP system without expected functionality or transferrable data Training end-users for activities that do not match their roles or address the expected changes to the organization Not training end-users in the activities that they actually perform Inadequately setting up access and profiles for end-users Using inadequate or canned training course content

When training is handled in this fashion, end-users are left with a number of negative perceptions. Possibly
Page 11 of 14 3773 Cherry Creek North Drive - Suite 720 - Denver, CO 80209 720-515-1377 Panorama-Consulting.com Copyright 2012 Eric Kimberling. All Rights Reserved.

most damaging, is the perception that the organization does not understand the work and processes of the employees. The natural conclusion is that the important decision makers are disconnected and unaware of reality within operations. The last thing any employee needs is a lack of confidence in leadership and direction of their organization. This is especially true during times of major transition. Yet, based on the frequency with which it happens, this is an acceptable outcome. What can an organization do to avoid allowing the ERP training phase to get squeezed beyond recovery? The following is based on lessons learned, in hopes that some of these steps make it into upcoming ERP implementation plans. Six Steps to Maintain and Strengthen ERP Training Validate your ERP project scope with an independent third-party consultant to get an expert assessment of forecasted time and resource requirements. Incorporate a strong statement into the project vision to enforce the need for quality ERP training and respect the experience of the project team and end-users affected by the ERP implementation. Recognize the connection between productivity and employee output and the need to deliver quality training, at the right time, for the right activities. Understand your steering committee and appeal to their objectives for they have the power to make decisions that will make or break your training plan. Engage the involvement of an influential advocate / change agent to present the negative impacts that can occur when training timelines and quality of delivery are at stake. Acknowledge that designing and delivering an ERP training program that addresses complex business process changes is a monumental task and should not be considered additional duties as assigned for persons with other full-time obligations. Backfill and hire consulting firms to ensure the job is done and done right.

Training for Paperless Information Flows One of the most common benefits cited with an ERP implementation is the reduction of paper forms to manage information flows. Easy, right? You just enter data into the ERP system and enjoy the speed and environmental benefits of electronic processing. Actually, you need to consider what this change means to your organization and plan accordingly to avoid surprises. Here are some lessons learned that can help prepare your workforce for this seemingly easy change in process: Evaluate the current information flow. If reviews and signatures are involved (for expense reimbursement or time-off), is the purpose to approve/decline the request or is it actually only to be made aware of the request? If an electronic notification will suffice, the company may be able to remove some bureaucratic tasks. Managing the exceptionally problematic request takes less time and effort than routing standard transactions through a gauntlet of approvals and managing delegations during absences. Create a naming convention that clearly labels information. When employees are used to flipping
Page 12 of 14 3773 Cherry Creek North Drive - Suite 720 - Denver, CO 80209 720-515-1377 Panorama-Consulting.com Copyright 2012 Eric Kimberling. All Rights Reserved.

through a physical folder with labeled sections to easily identify the contents, searching through vaguely meaningful menu options can be frustrating. Ask for input to create a useful, user-friendly naming convention. Understand that paper forms may allow less accountability. Lets say you have a supervisor who has been slow to process a rate increase for their not-so-favorite hourly employee. Its easy to hide behind I sent the form in to HR and Payroll, Im not sure where its at. The employee then sends HR and Payroll on a hunt to find the form, often cycling back to the supervisor to determine when (and if) the form was actually submitted. Going electronic means the supervisor can track the request and report directly back to the employee, which also requires the supervisor to understand processing cutoff dates and payroll cycles. Both employee and supervisors have a learning curve to understand the new information that is available through an integrated electronic system. Anticipate role changes. Administrative assistants, HR and payroll positions may have a significant portion of their time consumed with the management of paper forms. If the process is streamlined, they may no longer be the gate keeper of requests. Retraining in new tasks may be required if a role is significantly impacted. For example, clerks who have previously approved and tracked forms may apply their knowledge about the rules and processes in a role where they support new users in the electronic processes. Understand that paperless doesnt negate the need to track and report. Paper forms often trigger a manual entry into a tracking system (usually designed to produce easy reports). Think about a request for time-off and the frequency employees want to know their vacation balances. How will this information be made available? Electronic processing allows for increased self-serve, which requires education and training. If employees have been going to a certain person for years and years for answers, leadership will need to deliberately break the habit of being served up information upon request.

Training for Increased Data Visibility One of the big advantages of ERP is visibility to enterprise data. Companies without ERP often times have fragmented silos with no knowledge of what is going on in other departments. For example, when a customer calls customer service to order a product, the CSR may not know when an out-of-stock item is due to be replenished. Or, in another case, a product manager might not have access to pending sales of a particular product. When implemented correctly, ERP software erases problems such as these. The downside, however, is that increased access to information often means more employee anxiety and uncertainty. In order for organizations to realize the benefits of ERP, employees need to leverage improved processes and functionality. The best way for them to do that is to understand what is expected of them. In our example above, what is a CSR supposed to do when a customer places an order thats out of stock? In the old world, maybe they would have just transferred the customers call to purchasing to find out when the product was going to be ordered. Or maybe the CSR would put them on hold, call purchasing to find out the answer, and verbally give the status to the customer. But in a new system, they need to understand what the new information means, where to find it and what they are expected to do with it. A big reason for ERP implementation failure is that employees do not understand process changes such as these. Therefore, rather than utilizing generic system training, organizations need to implement a comprehensive and process-based training program that is specific to the organization. This should be an integral part of the companys OCM program.
Page 13 of 14 3773 Cherry Creek North Drive - Suite 720 - Denver, CO 80209 720-515-1377 Panorama-Consulting.com Copyright 2012 Eric Kimberling. All Rights Reserved.

About the Author

After 15 years of ERP consulting at large firms including PricewaterhouseCoopers and SchlumbergerSema, Eric Kimberling realized the need for an independent consulting firm that really understands both ERP and the business benefits it can enable. He currently serves as managing partner of Panorama Consulting Solutions, the worlds leading independent ERP consultant. Eric began his career as an ERP organizational change management consultant and eventually broadened his background to include implementation project management and software selection. Erics background includes extensive ERP software selection, ERP organizational change, and ERP implementation project management experience. Throughout his career, Eric has helped dozens of high-profile and global companies with their ERP initiatives, including Kodak, Samsonite, Coors, Duke Energy, and Lucent Technologies to name a few. In addition to extensive ERP experience, Eric has also helped clients with business process re-engineering, merger and acquisition integration, strategic planning, and Six Sigma. Eric holds an MBA from Daniels College of Business at the University of Denver.

Page 14 of 14 3773 Cherry Creek North Drive - Suite 720 - Denver, CO 80209 720-515-1377 Panorama-Consulting.com Copyright 2012 Eric Kimberling. All Rights Reserved.