Change management is a structured approach to transitioning individuals, teams,

and organizations from a current state to a desired future state. Change management (or
change control) is the process during which the changes of a system are implemented in a
controlled manner by following a pre-defined framework/model with, to some extent,
reasonable modifications.
In Project Management, Change Management refers to a Project Management
process where changes to a project are formally introduced and approved.
The field of change management grew from the recognition that organizations are
comprised of people. And the behaviors of people make up the outputs of an
organization.
Change management is the process of developing a planned approach to change
in an organization. Typically the objective is to maximize the collective benefits for all
people involved in the change and minimize the risk of failure of implementing the
change. The discipline of change management deals primarily with the human aspect of
change, and is therefore related to pure and industrial psychology.
Organization change:
It can be very difficult to introduce change to an organization. Failure to
recognize and deal with this fact has been the cause of many project failures.
Folger & Skarlicki (1999) - "organizational change can generate skepticism and
resistance in employees, making it sometimes difficult or impossible to implement
organizational improvements"
As the Management Team, you must be aware of the extent to which your projects
may introduce organizational change, and then you must deal with this issue.
–Coetsee (1999) states "management's ability to achieve maximum benefits from change
depends in part on how effectively they create and maintain a climate that minimizes
resistant behavior and encourages acceptance and support" (p. 205).

What is Organizational Change?

–It is generally considered to be an organization-wide change, as opposed to smaller
changes such as adding a new person. (See first slide of this section for examples)
–It includes the management of changes to the organizational culture, business processes,
physical environment, job design / responsibilities, staff skills / knowledge and policies /
procedures.
–When the change is fundamental and radical, one might call it organizational
transformation
What provokes Organizational Change? Examples:
–Management adopts a strategy to accomplish some overall goal
–May be provoked by some major outside driving force, e.g., substantial cuts in funding
–An Organization may wish to evolve to a different level in their life cycle, e.g. from
traditional government to e-government
–Transition to a new chief executive can provoke organization-wide change when his or
her new and unique personality pervades the entire organization
–Organizations go through four stages on the way to achieving their strategic objective:

Denial Resistance

1
 Exploration Renewal

–Minimizing the size and duration of this Productivity Dip is dependent upon quickly
creating acceptance to the strategic plan and all that it entails.
–But gaining that acceptance is often a difficult process, as some employees will, for
various reasons, seek to block the change

Factors in Organizational Change

–Resistance is a natural and inevitable reaction in an organization.
–Resistance is sometimes hidden, so it may be necessary to take active steps to find it
–There are many reasons for resistance; it is important to understand it
–We manage resistance by working with people, and helping them deal with their
concerns
–There are many ways to build acceptance. It is important to be flexible. But persist!

–The key to successful management of organizational change lies in the people.

They are the agents for successful transformation of the organization. They determine
the Return on Investment from this process

Resistance to Change
–Why people resist change:
Resistance to change can be a defense mechanism caused by frustration and anxiety
Individuals may not be resisting the change as much as they are resisting a potential loss
of status, pay, comfort, or power that arises from expertise

2
In many case there is not a disagreement with the benefits of the new process, but rather a
fear of the unknown future and about their ability to adapt to it, e.g. fear that one will
not be able to develop new skills and behaviors that are required in a new work setting
There may be resentment in disgruntled employees due to a perceived unfairness of the
change. This can be strong enough to lead to sabotage.
Some employees may see the change as a violation of "personal compacts"
management has with their employees. This can involve elements of mutual trust, loyalty
and commitment and go very deep. An employee may have a “competing commitment”
that is incompatible with the desired change.
An employee may be operating on the basis of a desire to protect what they feel is the
best interests of the organization
An employee may provoke insightful and well-intended debate, criticism, or
disagreement in order to produce better understanding as well as additional options
and solutions.
–
–Indeed, there are instances where an employees “resistance”, although not in the plan,
could result in beneficial consequences
–It is generally acknowledged that in an average organization, when the intention for
change is announced:
15% of the workforce is eager to accept it
15% of the workforce is dead set against it
70% is sitting on the fence, waiting to see what happens

The high-level view:

–Get senior management agreement (i.e. conflicting goals can kill the project!)
–Identify a champion who can articulate the reasons for and advantages of the change
–Translate the vision for change into a realistic plan and then carry out the plan
–Involve people from every area of the organization
–Communicate. Communicate. Educate. Educate.
–Get organizational buy-in to the change
–Modify organizational structures so that they will sustain the change

Widely communicate the potential need for change. Communicate what you're doing
about it. Communicate what was done and how it worked out. Communicate that Senior
Management backs this strategy unanimously.
Get as much feedback as practical from employees, including what they think the
problems are and what should be done to resolve them. If possible, work with a team of
employees to manage the change.
Don't get wrapped up in doing change for the sake of change. Know why you're
making the change. What goal(s) do you hope to accomplish? Communicate the goals!
Plan the change. How do you plan to reach the goals, what will you need to reach the
goals, how long might it take and how will you know when you've reached your goals or
not? Focus on the coordination of the departments/programs in your organization, not on
each part by itself. Have someone in charge of the plan.

3
Delegate decisions to Employees as much as possible. This includes granting them the
authority and responsibility to get the job done. As much as possible, let them decide how
to do the project.
The process won't be an "aha!" It will take longer than you think.
Keep perspective. Keep focused on meeting the needs of your customer or clients.
Take care of yourself. Organization-wide change can be highly stressful.
Don't seek to control change, but rather expect it, understand it and manage it.
Include closure in the plan. Acknowledge and celebrate your accomplishments.
Read some resources about organizational change, including new forms and
structures.
Consider using a consultant. Ensure the consultant is highly experienced in
organization-wide change.
Summary
–Organizational Change Management is “all of the actions required for an organization to
understand, prepare for, implement and take full advantage of significant change”.
–The goals of Change Management are:
The successful design, implementation, measurement and maintenance of an
organization’s change initiative. Enhancement of their on-going capacity for managing
change
–Enterprise Transformation is driven by an underlying strategy that organizes and
energizes People to understand, embrace and make full use of new Process and
Technology
–Degree of success of this endeavor is measured by the level and nature of the Business
Impact achieved

Change Management is a planned approach to change within an organization. The

objective is to maximize the benefits for the organization and lower the potential risk
associated with any ERP solution changes. These changes are either reactive, which is
caused by external source, or proactive, which is a goal oriented change. A huge aspect of
integrating any new ERP technologies is human based. There are psychological aspects
of any change, such as resistance, that many people go through. Any effective change
management touches on all these aspects within an organization. The key process of
change management begins by measuring attitudinal changes as the process of ERP
implementation begins which is not just recording how people feel about the changes
anticipated in technology implementation of the business processes that is primarily
focused on the automation over a period of time and how to manage the shift in their
expectations. This requires a communication as well as a training process.

Implementing an ERP will bring in changes to the way people work within the
organization, processes will change and there may be job cuts and rationalization of
responsibilities within departments. All this will definitely evoke resistance from the
employees and this has to be managed effectively before, during and after the
implementation of the ERP package. Top management has to lead the way in propagating
the reasons for the implementation and the business benefits that can be expected by

4
implementing a new ERP package. A strong change management team needs to be
involved to approve, implement and track the changes in the organization, which includes
the impact and detailed structure (ie. documentation) associated with the life cycle of the
ERP project.

The ERP are made to flexibly the enterprise and the management of the internal supply
chain.

What is Enterprise Resource Planning and why ERP is related to Change? At first
we must make it clear that when we are talking about ERP, we mean the Enterprise
Resource Planning solutions which are really following the concepts and characteristics
of ERP. Enterprise Resource Planning is not only a technology that automates the
processes of the organizations but is a solution to run the business more efficient
and beneficial. That means implementing a world class Enterprise Resource Planning
involves not only with changes in the technical layer of the organization but also changes
in the mission layer of the organization. This happens mainly due to the Best Practices
which Enterprise Resource Planning solutions offer. Best Practices refer to the business
models that are stored as workflow engine and the logic of programs in ERP package.
Such models are made thorough benchmarking from the practices and business processes
of the world-class organizations and excellent enterprises.

So when an organization uses such ERP solutions, in fact it employs these

Business reference models. Thus, Enterprise Resource Planning implementation is
equivalent to running the business as per new processes and practices. On the other hand
the employees of the organization should change to work on a new practice. This exposes
why ERP is tied with change in the organization and organizational change must be
considered as a consequence of such Enterprise Resource Planning implementation. What
areas will undergo change? The change as told begins from the business processes. This
includes new way of doing works and functions to run the business. Furthermore change
in the attitude to the organization tasks might become necessary if the current habits of
doing tasks have significant gaps with the new processes.

For a very simple example if the employees currently are doing their dedicated
tasks separately in their defined boundaries they must to change to work on the basis of
an interlocked chain of the tasks called business processes. This is due to the primary
feature of any Enterprise Resource Planning which is process oriented. This obviously
needs a change in the attitude and behavior of the organization people from a task
oriented approach to process oriented approach. People concentration in such integrated
business must move from focusing on their separate jobs not being worried about the
other parts, to taking care of the entire process and do what all they can to accomplish the
entire process perfect. Further more process integration also must happen. The business
processes themselves are in relation together and each process might trigger other
processes to be launched. In this way team working also makes sense and will get in to
the scope.

5
 In fact teams are to be formed around the business processes. Team work needs
improvements in the horizontal relationships between employees and enhancements in
their communication abilities. You see how principle concepts of ERP involve wide
changes in the people side of the enterprise. New business processes consequences with
new organizational roles and jobs descriptions for the employees. It may cause some
changes in organizational chart due to adoption to the new processes and job definitions.
In addition the technology also is being changed. The reports and data forms of ERP
makes differences in the ways of data movement as well as reporting in the organization.
On line access to required data for any employee and computerized data flow requires the
people to change from paper based working to use the automated data. Trust to
mechanized data is not so easy for the people who have been working in a paper based
organization for a long time. This exactly needs change in habits and attitudes. Managers
also must get used to take managerial reports from the system and spend their time for
analyzing information.

Conclusion As per the above we can easily conclude that implementing and utilizing a
world class ERP solution is tightly associated with managing people side of change. In
fact even if you setup ERP applications correctly but the people side of change does not
happen the company will not be working on the ERP practices and so it will not gain the
expected benefits.

Further more Enterprise Resource Planning implementation regardless of

changing the employees can cause stoppage in your business. If you look at the failure
stories you can see that many of ERP implementations are failed after the software
implementation, due to organization was not capable to perform as per the ERP business
processes and its necessities. In the other world the employees did not adopted with these
new practices. The major reason is lack of a Change Management program. Indeed
implementing an ERP solution in addition to a technical project management needs a
people side of Change Management program. This Change Management will have its
own scenario, activities and responsible. We can say you must run two projects. The goal
of the Change Management project is to make the people ready for change and conduct
them to move to the new environment and map them to the new way of running business.

Organizational structure

Although the type of organization would largely depend on the size and nature of the
enterprise, yet there are 4 common forms of organizational structure, namely

(a) line organization

(b) functional organization
(c) line and staff organization
(d) committee organization

6
Line Organization an organizational structure in which authority moves down in a line
from the chief executive; typically, there are no specialists or advisors, the chief
executive having complete authority over decision-making.

(a)Functional organization : As the name suggests, under this type of organizational

structure, all activities in the organization are grouped together according to
basic functions like production, marketing, finance, human resource etc. Each
function is put under the charge of a specialist who is fully responsible for
carrying out the function for the entire enterprise. The authority flows
functionally to the divisional heads. The divisional heads report to one
specialist with reference to one functional and to another, for another function.

(b)Line and staff Organization : This type of organization has been evolved to
achieve the advantages of the two forms of the organizational structures
mentioned above. While the line organization insists too much on the unity of
command, the functional organizational emphasizes too much on the
decentralization of control. In order to strike a balance, line and staff
organization structure has been evolved. In this form of organization, the
structure is basically that of the line organization but functional experts are
provided to advise line authorities in he performance of their duties.
(C)Committee Organisation: In today’s complex business world, each activity taken
out by any department affects the work of other departments. A slight change in
production policy will affect the sales department. Similarly, change in the dales policy
or a new sales policy, cannot be followed by the sales managers, without consulting the
finance department or the production department.
It should therefore be well understood that important policy decisions, which
affect other departments should not be taken by the in-charge of the department alone,
but they should be referred to a committee consisting of the managers of the affecting
departments. For example, a blinds company, who is selling vertical blinds and roman
shades products online, if production department stop a particular size production than
they should inform the marketing departments. It ensures co-operation and better co-
ordination. Thus committee organization is extensively used to solve the multifaceted
problems of large and complex business units. Committee is a group of individuals
especially designated to take the decision in matters referred to it through free
interchange of ideas among its member

Post implementation problem:

Problems associated with enterprise resource planning (ERP) implementations
become more rampant during the post implementation phase because once users learn
their way around the system, they can test its limits, setting off shockwaves that can
devastate an otherwise successful control environment. While extensive integration and
acceptance testing flushes programming errors and exercises pathways through the
system, post implementation brings an explosion of bug reports that hits the maintenance
team, along with a slew of frenzied requests for new functions.
As a result, the post implementation phase requires an ongoing process of
improvement and fine-tuning. It is the greatest challenge to audit, because an audit is

7
expected to unravel the root of problems in the ERP processes and provide effective
solutions.
Post implementation reviews reveal the unique learning curve that occurs for
experienced users after the implementation of an ERP system. This learning curve is
different from that of systems used by clerical workers for routine tasks. It often takes
many months for experienced users to get comfortable with the system because early in a
system’s life, these users tend to resist using it for their important work. They already
have a set process and comfort level in getting their work done, and the complex ERP
systems may appear threatening and intrusive.
Many experienced users (at all levels of seniority) secretly harbor a fear of
appearing incompetent by failing to master such a tool. In response to these fears, many
experienced users greet the new system’s implementation by continuing to do things as
they always have, though they do log on to the new system occasionally to demonstrate
to management that they are giving it a try. They usually use the features of the system
that require the least effort to learn and that pose the least risk of error. These patterns can
be seen if a monitoring function is included that reports statistically on which functions of
the system are being used, how often and by whom (i.e., monitoring post
implementation).
Typically, some users use the system only to receive e-mail and look at calendars
created by their secretaries. They do not use the document creation routines themselves or
store files in the document database. They may often override sophisticated automatic
processing and use only manual functions that give them a greater feeling of control.
These users also may prefer looking at reports to using an online inquiry. It takes
a period of months for users to begin to feel comfortable with their new tools. However,
at some point in the ERP system's life history, as users begin to see the advantages of the
new system, they gingerly begin to explore its functions, gradually getting over their
shyness as their efforts are greeted with success. After all, the system would not have
been implemented in the first place if it were not a terrific aid. Finally, as the post
implementation period sets in, a critical mass of users emerges—users who are
enthusiastic about the system and, more important, are beginning to understand from a
functional standpoint how it operates.
At this point, an explosion takes place. Monitoring programs, if they are in place,
suddenly show a tremendous upsurge in system use by all users. If the system includes
communication features, such as electronic mail or work group computing, enough
people in the user group are sufficiently comfortable with these features to begin to use
them instead of the telephone or paper documents. If the system tracks investment or
accounts, the users may start relying on online inquiry in place of hard-copy reports, and
use all the sophisticated transactions with which they have been provided.
Finally, having mastered the system, the users begin to get creative with it. Now
they are likely to apply their functional understanding of how the system appears to
operate and try to push it a step further than it was designed to go. They start using the
system to deal with (or attempt to deal with) situations that were not envisioned by the
system’s designers, no matter how hard the designers tried to imagine the system in
operation.
It is at this point, when a critical mass of users is fully using the system, bringing
to it all their ingenuity and creativity, when post implementation aftershock strikes and

8
bug reports start flooding the maintenance group. The bugs they report are rarely trivial
and are difficult to track down. Many of these bugs result from users doing tricky things
with the system in hopes of "fake it out.
" For example, some users understand the way a parameter file controls what they
can and cannot do with the system, and they begin to alter parameters temporarily so they
can slip in transactions that contain combinations of field values needed in a particular
case but not anticipated by the system’s designers. Without such finagling, the
transactions would not make it through a series of online edits, but with the finagling they
will. Having made their changes, the users then politely change the parameter file back to
its earlier values. The records generated by these tricks cause problems of which the
administrators are not aware in the subsystem. It takes major detective work to determine
the source of these illegal records.
At the same time that these bugs occur, requests begin to Many experienced users
(at all levels of seniority) secretly harbor a fear of appearing incompetent by failing to
master such a tool. pour in from the same users for more function.
The functions requested are often complex, and user management may start
wondering why such "obvious" functions were not included in the original system's
design. But this slew of system requests is not a sign of bad design; rather, it is a sign of
the system's success. It shows that users have accepted the system and are putting it to
use.

It also demonstrates that the experienced users are confident enough to go beyond a
cookbook approach to using the system and are becoming creative and innovative
partners in the system’s design. Now, having digested the system that their
representatives said they wanted, these sophisticated users want to push the system’s
limits further. It is highly unrealistic to expect representatives of system groups or user
groups to be able to design into the initial version of a complex ERP system every feature
that experienced users require; that is why commercial ERP systems are developed in a
series of releases.

MEASURING THE BENEFITS OF ERP

Description: Companies spend tens of thousands -- even millions -- of dollars on their

ERP (Enterprise Resource Planning) or business management software. Unfortunately,
all too often they focus on phases like initial implementation or consolidation and assume
that all of the work will end after the project goes live. Join Microsoft® partner AMR
Research to learn valuable strategies on identifying and addressing your enterprise’s
organizational and business process challenges, in order to realize the most value from
your business solutions, as well as how to measure the value of major IT investments.
Then hear how Microsoft Business Solutions provide flexible, scalable, and fully
integrated financial, analytics, supply chain management and CRM solutions to help
bring all aspects of a business together. You’ll also learn about Microsoft Business
Solutions customers, who coupled business process improvements with Microsoft’s
leading technology to realize a strong return on investment and lower total cost of
ownership with their ERP investment, especially when compared with alternative Tier 1
applications on the market.

9
Presenter: Bill Swanton, Vice President, Research, AMR Research
AMR Research is a strategic advisory firm that provides critical analysis and actionable
advice to business and technology executives to help them manage resources, assess and
mitigate risk and increase business value. Bill Swanton, Vice President of Research for
AMR, is responsible for expanding their coverage of enterprise applications issues,
including research on Enterprise Resources Planning (ERP) solutions.

10