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Saturday, July 24, 2010
Lessons Learnt - Week 3
ERP Week 3 – Change management
“Changes that fail usually do so because of human, not technical, reasons” – Brien Palmer
Organisational Change Management (OCM) is a set of initiatives to prepare a business for a significant change, such as an ERP implementation. OCM encompasses both the hard (technical) changes and the soft (people) changes.
So how do we know if a business is ready for change?
Palmer recommends a 7 step model to minimise this risk. The model is designed to be used as a self-check score card for change management. The company should assess itself on each of the criteria, and if it is not adequately prepared, the change or new implementation should be delayed or scrapped.
Palmer’s 7-Step Model:
Leading Change – the initiative needs a champion/sponsor with access to resources
Creating a Shared Need – the reason, need, and drive for change must be shared throughout the organisation.
Shaping a Vision – the desired outcome of change must be widely understood and shared
Mobilising Commitment – there must be a strong commitment from all key constituents
Monitoring Progress – benchmarks need to be set and realised
Finishing the Job – once the change is in motion, ongoing learning and skill transfer needs to be implemented
Anchoring the Change in Systems and Structures – systems such as Audits, performance reviews, IT and ERP, should be used to reinforce the change.
Palmer’s list is also an instructional to-do list for businesses; it’s a guide for the business as to how it can prepare for change.
Key elements of OCM:
Training: this includes training all levels of the company, from the Core Team, to Management and finally, the End Users. It is critical that the needs of each level are fully understood, and that training is administered in the most effective way for each audience.
Communications: In OCM, managing communications is about keeping all relevant parties informed as much, or as a little, as is necessary. The purpose of this is not just for reporting, but also to help create the “shared vision” as discussed by Palmer. Security and Role Development: The most important role of OCM here is to understand each user’s before-implementation and after-implementation needs, and to ensure that they have the access to complete their old and new duties. Super Users: To help ensure a successful implementation, super users should be selected and trained carefully. These people should be natural change agents in the organisation; their influence and leadership will help minimise resistance to change. Business Process Procedures: in this area, the OCM team needs to make sure business processes are properly documented, stored appropriately, and easily accessible. The documentation should capture the transactional process as well as the core business process – this will help users to better understand why they are performing a particular business procedure, now just how to perform it.
Culture vs. Strategy
All elements of the change management plan should be tailored around a company’s culture. The OCM team must recognise the existing culture and adapt the elements of the change plan to foster an inquisitive culture. If this is achieved, employees will seek out learning, they will ask questions, and they will take responsibility for their own actions.
Risk assessment is an essential element of any project or major implementation. This process for assessing risks is as follows
What is the risk?
What is the likely impact?
What is the probability of the event occurring?
Calculate the risk index
Create a mitigation plan
Risks that score high on the risk index must take priority. If possible, the ‘expected cost’ of each risk event should be calculated and a mitigation plan created accordingly.