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.
Showing posts with label Week 3. Show all posts
Showing posts with label Week 3. Show all posts
Tuesday, July 27, 2010
BilkentMBA2010, Lessons Learned, Week 3
In managing the organizational change process it is very critical to overcome resistance to chance. A vision, strategy, goals and initiatives have to be carefully decided on. In addition, to overcome change resistance, employees should be told about how they will benefit from the new system and they should be involved in the change management system before finalizing decisions. The new system should be designed to address their needs and people should be empowered to take responsibility in change.
Organizational Change Management (OCM) involves the search for the answers of what, why, how, who, when and where questions for the ERP Implementation. Although people stuff (training, communications, security authorization, etc..) is misperceived as the soft stuff and technical issues (transporting old data into new system, blueprinting, etc..) as the hard stuff of the OCM, in practice this is not true. It is harder to confront people compared to technical issues and therefore the most important people initiatives should be identified and they should be made priority of OCM. Company culture (which includes values, beliefs and norms) also needs to be taken into consideration while managing the change. For instance, it can be especially harder to convince people on the benefits of change in a conservative/bureaucratic company culture, and issues must be handled with greater care in such an environment.
The 5 initiatives of OCM, which are interrelated and which support each other, can be addressed as following:
1. Training: core team training and management seminar should take place early in the project as an overview. End-user training which takes place later, is more time consuming, detailed and requires preliminary work such as training need analysis and course content development.
2. Communications: the determination of content/message, audience, communication channel (e.g. e-mail, lunch meeting, etc..), frequency, communicator, supporting material developer and messages and objectives constitute the elements of a communications plan. It is usually hard for the end-users to understand and embrace the system before go-live
3. Security/Role Development: the transactions that an end-user is authorized to complete should be determined.
4. Super-user Development: objectives, selection criteria (such as communication skills, being respectable, high knowledge level) should be determined and super-users must be trained. An open channel between super-users and end-users should be created. These super-users become the first contract of end-users in case of a problem. In return, they report key problems to technical analysts, who can ask the issues to business owners. The demand on super-users on the first months is very high and it is hard to estimate demand at that time.
5. Business Process Procedure: BPP should be documented to define the steps on how each transaction is used within the ERP system. This should be done before training process.
Risk Assessment: involves 5 steps which are; risk identification, impact identification, probability determination, risk index (result of impact) and mitigation of the risk (how to deal with risk).
Organizational Change Management (OCM) involves the search for the answers of what, why, how, who, when and where questions for the ERP Implementation. Although people stuff (training, communications, security authorization, etc..) is misperceived as the soft stuff and technical issues (transporting old data into new system, blueprinting, etc..) as the hard stuff of the OCM, in practice this is not true. It is harder to confront people compared to technical issues and therefore the most important people initiatives should be identified and they should be made priority of OCM. Company culture (which includes values, beliefs and norms) also needs to be taken into consideration while managing the change. For instance, it can be especially harder to convince people on the benefits of change in a conservative/bureaucratic company culture, and issues must be handled with greater care in such an environment.
The 5 initiatives of OCM, which are interrelated and which support each other, can be addressed as following:
1. Training: core team training and management seminar should take place early in the project as an overview. End-user training which takes place later, is more time consuming, detailed and requires preliminary work such as training need analysis and course content development.
2. Communications: the determination of content/message, audience, communication channel (e.g. e-mail, lunch meeting, etc..), frequency, communicator, supporting material developer and messages and objectives constitute the elements of a communications plan. It is usually hard for the end-users to understand and embrace the system before go-live
3. Security/Role Development: the transactions that an end-user is authorized to complete should be determined.
4. Super-user Development: objectives, selection criteria (such as communication skills, being respectable, high knowledge level) should be determined and super-users must be trained. An open channel between super-users and end-users should be created. These super-users become the first contract of end-users in case of a problem. In return, they report key problems to technical analysts, who can ask the issues to business owners. The demand on super-users on the first months is very high and it is hard to estimate demand at that time.
5. Business Process Procedure: BPP should be documented to define the steps on how each transaction is used within the ERP system. This should be done before training process.
Risk Assessment: involves 5 steps which are; risk identification, impact identification, probability determination, risk index (result of impact) and mitigation of the risk (how to deal with risk).
Monday, July 26, 2010
BilkentMBA2010, Lessons Learned, Week 3, Gun Gokmen
Week 3 started with the concept of change management.
- As an introduction, we started with the source of resistance: why do people resist to changes in their workplaces, and we talked about some instances. A salesman, for example resists to an ERP system because entering the information to the system requires time, which can be traced to lost sales eventually. Or they may not want to share their sales or customer information with the others. There ale solutions to this problem, like communicating and convincing them that the system will benefit them eventually, and to show them how to get benefit from the system as a tool. Or these people could be given incentives to use the system.
- Norm is a culture, which is not written. This affects the change efforts.
- The change management also involves trainings for different levels in a company: Core team training, management seminar, end user training. I used to give end user trainings and remember my hard times because of the resistance of the users. They looked forward to seeing some problems with the software and not to use it. I learned that training the trainers sessions I've once attended was a mean of change management concept.
- Business process reengineering makes business processes leaner.
- Do biz process optimization or ERP implementation first? Best to do hand in hand, but getting ERP before could be better because ERP already provides "best practices"
- Business process procedures (BPP): documents to define steps in processes. They also represent the actual business processes of a company because ERP processes REPLACE the old processes. A good transactional document also includes clues of the actual process.
- The Silo Problem: Departments working distinctly of each other, doing their own work and "throwing off the wall" But they should work together.
Then we did Risk Assessment and analysis
- 1. identify the risk 2. identify impact 3. identify probability 4. Risk index 5. Find its mitigation
- Risks: technical or related to people
- We did an example of network down for a day... Red index.
- Risk assessment can be used as a project management tool. Could be done monthly, twice a year, in the phases of a project, etc.
BilkentMBA2010, Lessons Learned, Week 3, Rostislav Smolin
OCM
One of most valuable assets to an ERP project is sponsorship. Project managers must involve and support sponsors from day one. Even a seemingly successful implementation can be halted if sponsors lose their influencein the company, so project team must inform executives about project successes allowing sponsors to maintain and grow their pro-ERP coalition.
Next in order of importance is the communication with the core team. These people will, hopefully, work long and stressful hours to make the implementation happen. They need to be trained, supports and informed about flow of the project.
End users training can be the most expensive item on the OCM budget, depending on the number of people trained. Effective training schedule can minimize costs as courses are grouped in related topics.
One important aspect of OCM is mitigating the risks associated with company culture. “Culture eats strategy for breakfast every day”, and sometimes cultural and structural changes in the company must be implemented in parallel with ERP.
ERP specialists can backup themselves politically by timely informing management of arising risks. The usual way to present risk is to follow risk, impact, probability and mitigation sequence.
One of most valuable assets to an ERP project is sponsorship. Project managers must involve and support sponsors from day one. Even a seemingly successful implementation can be halted if sponsors lose their influencein the company, so project team must inform executives about project successes allowing sponsors to maintain and grow their pro-ERP coalition.
Next in order of importance is the communication with the core team. These people will, hopefully, work long and stressful hours to make the implementation happen. They need to be trained, supports and informed about flow of the project.
End users training can be the most expensive item on the OCM budget, depending on the number of people trained. Effective training schedule can minimize costs as courses are grouped in related topics.
One important aspect of OCM is mitigating the risks associated with company culture. “Culture eats strategy for breakfast every day”, and sometimes cultural and structural changes in the company must be implemented in parallel with ERP.
ERP specialists can backup themselves politically by timely informing management of arising risks. The usual way to present risk is to follow risk, impact, probability and mitigation sequence.
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