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Challenge of ERP Implementation Q & A

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Question: ERPs seem like a good idea, so why is return on investment so low?

Answer: Resistance often kills many of these new systems. Even though the promise of what an ERP can do is high, the planners often fail to look at how the users are likely to view this “improvement.” ERPs take away the old tried-and-true ways of working. Even though some of these cobbled together systems aren’t all that good, people understand them. When they are asked to give up what they know and what they can rely on, you often get resistance to using a new software system.

ERPs also threaten the fragile balance of power and control. The old system allows departments and some individuals to control the type of information that gets out – and control the way data gets disseminated. The new system destroys all of that and that can be threatening.

One manufacturing plant has spent millions on an ERP, and kept throwing money at the technical parts of project, with no success. What they failed to see was that the technical problems they faced were minor compared to the human reactions against these changes.

Question: What are the biggest pitfalls when planning an ERP?

Answer: The biggest pitfall by far is assuming that ERP implementation is solely a technical and financial challenge. The human side of change is the most neglected, and consequently most likely to result in cost and time overruns, or failure to meet the intended goals.

Question: How can we increase the odds in our favor?

Answer: Plan for the human part of the ERP. There are three major reasons why people resist a change. They don’t get it (Level 1), they don’t like it (Level 2), or they don’t like you (Level 3). Any one of those can stop the ERP dead in its tracks. And what you need is the opposite of all three: people need to get what it’s all about, they need to like it and be willing to take part in making sure it is a success, and they need to have confidence in you.

Create strategies that speak to people in their own language to help them understand why these changes are critical to your organization. Spend a lot of time building the case for the change before you get into the often mind-numbing details of the ERP process itself. This attention to Level 1 is necessary but not sufficient for success. You must attend to the other two levels as well.

If people react against the change, find out why. It is usually fear. In some cases people are afraid that the new ERP will cost them their job. If that’s the case, why would they support it? You need to find ways to engage people to help you address the downside of the change. For example, if people are afraid that the new system will not allow them to customize and be as responsive to customers, invite them into the planning to ensure that the new system provides the features they need.

And if they don’t have confidence in you or your team (Level 3), you must do everything you can do demonstrate that you are worthy of their trust. This probably won’t happen over night. One meeting won’t do it. You need to prove yourself time and time again. No, it’s not easy, and working on Level 3 issues can be exhausting, but it may be the only game in town if you really want people to make a commitment to you and the new system. Good luck.

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Rick Maurer is an advisor to organizations on ways to lead Change without Migraines. He is author of many books on change including Beyond the Wall of Resistance. His web site offers over 100 free tips and tools for leading change successfully. www.beyondresistance.com

Challenge of ERP Implementation Q & A
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  • http://www.batchmaster.com BatchMaster Software Inc.

    The benefits of an ERP application is limited unless it is seamlessly integrated with other information systems. Organizations face many challenges in ERP integration –

    1) the challenges of integrating various functional ERP modules,
    2) the challenge of integration with other e-business software applications, and
    3) the challenge of integration with legacy systems.