BilkentMBA2010, Lessons Learned, Week3

During the third week of the class, we discussed the “soft stuff” and how they can turn into hard stuff in implementing ERP. In order for companies to overcome this problem, we talked about the importance of OCM- Organizational Change Management and its five initiatives.

It is known that around 80% of ERP implementation projects fail, and the reason is not because of the technical stuff but because of the people stuff for the most of cases. For this reason, organizations need to go through a change management program that prepares the company and its staff for the upcoming changes as a result ERP implementation. In this change management program there are five initiatives:

Business Process Procedures- this is the documentation initiative of the processes, i.e. how each transaction is used within the ERP system, to control and store all the business process procedures associated with the implementation. Once this stage is completed, the output can be used in making the training plans.

Training- The most important aspect of this initiative is to be able to address the needs of the trainees. The core team trainings and managerial seminars should be done in the early phase of the implementation. Later on, end users trainings should be made.

Security/ Role Development- This initiative is about identifying transactions for each role and giving authority to those identified. Note that, in this initiative, a help of a supervisor that is from the company is needed in order to consider the future needs of staff.

Super User Development- Super Users are the people within the company who are trained before everybody else in the company. They later are employed in the training of end users and act like an internal consultant during and after the project implementation. The selection of super users should be according to their willingness, whether they are well-respected and influential, whether they are responsible and communicate with others.

Communication- OCM is about encouraging staff to get involved with what’s going on in the company. Therefore, communicating the aim of the project and its benefits to the users is significant. As a result, they are the one who are going to use the new system and probably determine the faith of the newly implemented ERP system. Also note that communication methods should be different for each level in the organization.

We also talked about how to overcome the resistance to change. According to Palmer, there are 7 factors: leading change, creating a shared need, shaping a vision, mobilizing commitment, monitoring progress, finishing the job, and anchoring the change in systems and structures. He recommends companies to measure resistance in the organization by his scoring matrix, and advices that if they find out that their organizations are not ready for change, they should not go for it, and try to improve the situation.

During the class discussions, the following question emerged: What do you think the company should do if he both considers BPR (Business Process Reengineering) to make its processes lean and implement ERP. We concluded that it would be better if he does both at the same time since ERP already includes the best practices and can address the issues regarding optimizing the business processes.

Risk Assessment is another important measurement in implementing ERP. In this evaluation method, the company identifies what the risks are, their impacts, and the probability of it; then they estimate its index and determine how to mitigate those risks.