Organization Change Management (OCM) in an ERP Project
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1 Organization Change Management (OCM) in an ERP Project By Tommy Krohn Business Area Manager Citec Engineering OY, Finland Agenda 1. Reason to start an ERP project? 2. Tasks in an ERP project 3. Valley of despair 4. Stakeholders in an ERP project 5. Communication Plan 6. Feedback 7. Risk assessment in OCM (Organisation Change Management) 8. Country impact 9. Why do people resist to changes? 10. Resistance, how to handle? 11. Important skills when dealing with resistance
2 Why to start an ERP project? (1/11) Some reasons to start an ERP Project: Merging/acquisition of companies (with different business systems) When companies set up subsidiaries in other places there is a need to get financial consolidation on group level Reduce number of software's used in the order-to delivery process (many different software's = manual entries / exchange files => possible errors) > Integrate Data Existing systems are outdated Unify the processes (way of working) Why to start an ERP project? (1/11) An ERP project is not only a software project, it has impact on almost all persons way of working in a company (integrated system) The persons involved in the ERP project (PM, Key persons) should be given enough time (one of the biggest problems) Involve persons from top-management, either in the steering group or preferable in the project-team itself, (ref SAP)
3 Tasks in an ERP project (2/11) Phase 1 Normally handled by a few persons only Internal Project Kick Off Pre-Planning of the scope (what modules to cover) Vendor (consultant) Selection criterias Scope / Time / $ Contract Negotiations Contract signing (big celebration and confusion ) Tasks in an ERP project (2/11) Phase 2 Start to involve more persons Project Team nomination (who to select? all the good ones are already busy!) Key User identification Process analysis and start of the Definition phase (all the consultants shall try to understand how the company is doing in daily life AND the company project team shall understand how the process is working in the ERP system) Training preparation Legacy Data Interface definition
4 Tasks in an ERP project (2/11) Phase 2 cont. Master Data (Static / dynamic plan, conversion plan) Corporate network (hardware) > IT department (change of server location?) Test Requirements Key User Training Data Conversions (Master Data > test environment) System environment setup (testing / training / production) Testing phase (test criteria's, module- / process test End user training (training schedule) Tasks in an ERP project (2/11) Phase 2 cont. UAT (User Acceptance Test) Support set up Cut Over Plan Go-Live Phase 3 Further Roll - Out
5 Valley of despair (3/11) It is natural that changes in way of working creates some kind of resistance By understanding and take it as a natural part of the project it makes it easier to handle. One way to describe motivation is Valley of despair Valley of despair (3/11) Kick Off Definition start Go-Live Roll-Out Normal production motivation Carefully Optimistic Pessimistic Hopelessness Exploring Acceptance Optimistic time
6 Stakeholders in an ERP project (4/11) Project team End users Consultants Owners Vendors Customers Lenders Distributors Agents etc Stakeholders in an ERP project (4/11) Understand the role of stakeholders, are they Resource providers Affected personnel Decision makers Affected external partners Public interest group As a part of change management it is important that the stakeholders will get timely and correct information of the project progress
7 Communication Plan (5/11) Understand the stakeholders and their expectations Evaluate their impact and importance for the project Plan the communication towards stakeholders Communication Plan (5/11) A communication plan is good to ensure that the communication is done timely and reach stakeholders as planned. Nominate a person to take care of this work VENDORS PRESS LENDERS DISTRIBUTIRS CUSTOMERSRS OWNERS EMPLOYEES GL EMPLOYEES Face-to face INT. INFO Intranet Extranet BULLETINE Ad-hoc
8 Communication Plan (5/11) A communication plan contains Identified stakeholder What media to use When to send Content (what type of information) VENDORS PRESS LENDERS DISTRIBUTIRS CUSTOMERSRS OWNERS EMPLOYEES GL EMPLOYEES Face-to face INT. INFO Intranet Extranet BULLETINE Ad-hoc Communication Plan (5/11) Face-to-face is most efficient Use many different communication channels Give same message to different stakeholders Bad news should also be communicated
9 Feedback (6/11) 1. Keep a record of the feedback you will get from the stakeholders 2. Go thru the feedback on a regular basis 3. Make action plans to address the top concerns 4. Communicate back to the entity what is planned to be done Risk Assessment Plan (7/11) A risk assessment plan (similar as a Project Risk Assessment) is a good way to identify and prepare for changes: Are the personnel ready for changes Are the vision / objectives clear Are the Project management capable Is the communication plan clear Are the stakeholders identified Is the management committed Probability Severity Mitigation
10 Country impact (8/11) Company cultures are different in every countries In some countries there is a big difference between the organisation levels. When planning an ERP project that is rolled out in different countries it is important to involve both the persons that have the correct knowledge level for the ERP project AND persons that are on the correct level in the organisation. Failure to do so might lead to a competent project team that are not able to fulfil the objectives OR a tem that does not have the right competence. Why do people resist to change (9/11) MR or MS I don t want to For example: a person that is unsure of how the change will impact on the work or a person that knows that the new system will remove his/her work task For example: experts or persons in foreman positions that have been doing the work the same way for years. They are skilled in what they do but does not want to give up their position Mr or Ms I m not capable to For example: persons that might have some lack in some skills or other limitations for the change Could be language problems or computer skills (ref: group decision) Mr or Ms I do not care, another stupid decision from mgmt Often a large group of persons that are quite far away from the decision making. For example blue-collar, site-personnel, engineers in big engineering-companies, etc.
11 Resistance, how to handle (10/11) Poor approach to handle resistance.. ERP mgmt start to fight the resistance Often creates negative feeling and even more resistance ERP mgmt does not take any notice Valuable ideas and information is not taken into account ERP mgmt give in The project team / users feels that there is poor leadership ERP mgmt penalizes the persons that resist the project Mgmt will not receive any more feedback and it creates a dictator culture. Resistance, how to handle (10/11) Possible actions to meet resistance MR or MS I don t want to Implement new way of working that shows how the new system and wow also have positive impact on the personnel level (for example measures and incentives) As part of above explain and also involve them in the project team Mr or Ms I m not capable to Make a training program / development plan for the person Mr or Ms I do not care, another stupid decision from mgmt Make sure that the persons are well informed about the project, Communicate progress and involve the persons as much as possible. Get feedback from them and show that it is taken into account.
12 Important skills when dealing with resistance (11/11) Same skills as being a good PM are needed Communication, Supervision, Coaching, Leading and TO KNOW THE OBJECTIVES OF THE PROJECT Stay focused! Thank you!
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