Organizational Change Management Tips for Global ERP Software Implementations
Organizational change management is one of the most important critical success factors for any enterprise software initiative, but it is even more critical for global ERP software implementations. Challenges such as employee acceptance of redesigned business processes are magnified by issues related to cultural differences, inter-office politics, language barriers, and organizational complexity.
A coordinated global organizational change management initiative can help alleviate some of these risks. We have helped manage organizational change for enterprise software initiatives for numerous multi-national companies such as Samsonite, Kodak, and Nufarm. Based on this experience, below are five tips to address the organizational complexities of a global ERP implementation:
- Business process standardization. Companies with global offices, particularly if those locations were acquired from another company, often have very non-standardized business processes. A global enterprise software implementation provides an opportunity to standardize processes across locations, but it can be very challenging to make that change happen. Organizational change management is crucial to overcoming such challenges.
- Understanding of local needs. Standardization is important to optimize ERP benefits and achieve a positive return on investment. On the other hand, it is also important to understand local needs to ensure that the standardized operational model of the new system will accommodate local needs. Even if every local need or want is not addressed via the new system, listening to local needs goes a long way toward securing employee buy-in and support for the new system across the globe.
- Localized delivery of employee communication and training. Not everyone speaks English or the preferred language of your corporate headquarters, so it is important to communicate and train in the language most appropriate for each location. We have worked with many multi-national companies where management and key team members in overseas locations speak perfect English, but it is not necessarily the case for lower-level employees. New ERP software takes enough time to learn without language barriers, so translation of key messages and training will typically pay dividends in the long run.
- Rely on your change agents. Each major office should have a local representative that acts as a change agent for the project team. These change agents typically represent the local interests of their offices, validate how standardized business processes will work with their location, and communicate key process and organizational changes to their respective stakeholders. This employee representation is key to a successful implementation.
- Leverage performance measures. Performance measures transcend language and culture in a way that everyone can understand. They should be used to quantify the results you expect to achieve from your ERP software investment and how each local office is expected to contribute to the improvements. These measures become important in identifying opportunities to improve results after go-live.
These are just a few of the many things to keep in mind when managing change in a multi-national environment. Visit our resource center to view our detailed presentation about how to handle organizational change management for global ERP software implementations.
About Eric Kimberling
After 15 years of ERP consulting at large firms including PricewaterhouseCoopers and SchlumbergerSema, Eric realized the need for an independent consulting firm that really understands ERP. He began his career as an ERP organizational change management consultant and eventually broadened his background to include implementation project management and software selection. Eric’s background includes extensive ERP software selection, ERP organizational change, and ERP implementation project management experience. Throughout his career, Eric has helped dozens of high-profile and global companies with their ERP initiatives, including Kodak, Samsonite, Coors, Duke Energy, and Lucent Technologies to name a few. In addition to extensive ERP experience, Eric has also helped clients with business process re-engineering, merger and acquisition integration, strategic planning, and six sigma. Eric holds an MBA from Daniels College of Business at the University of Denver.
Hi Eric,
I am glad to see that this is not another fluffy article on some odd theory but that you pinnpoint exactly where the rubber meets the road: going local. In our book on the same subject we have a specific name for this: ‘LOCAL PETS’. Consequently we look at the subject a ‘taming the local pets’.
Every country and every project has its specific elements, and every industry has its specific exceptions. We are referring to the processes that are not the core processes but the exceptions that people warn you about 80 % of the time. Examples of these local pets include the following:
- Imperial versus metric systems in US deployments of global programs
- Nota Fiscal in Brazil
- Luxury taxes in Indonesia
- Post-dated checks in Taiwan
- All kinds of industry specific pets like samples or returns
The sensitive atmosphere hanging around local pets illustrates the need for psychological safety. Even though the program may have completed the 80 % of the processes that are business-critical, people won’t place their trust in the program until you tame their local pet. It becomes a symbolic hurdle that you have to clear. Taming the local pet equals creating buy-in by investing all of your attention into these special processes. Make sure that you involve the local key players!
Source: Managing Organizational Change during SAP Implementations: Luc Galoppin, Siegfried Caems: Books http://ow.ly/14Xq7
Here you can get a free chapter: http://ow.ly/14XwS
Best regards,
Luc.
Eric, thank you, your five tips are all very relevant to an ERP implementation. I want to build on two of your tips.
Performance measures are essential. Unfortunately, in my experience these measures all too often focus on installation rather than realization. The realization of the desired outcomes such as increased customer loyalty, business growth, and operating efficiencies are often lost in the focus on installing software and meeting deadlines. Of course, if the desired end state has not been clearly envisioned and senior leaders are not aligned around the case for change, the future state, and the desired outcomes, an installation focus is most likely to be the result.
Relying on change agents is all very well, but without effective sponsorship all the way down the organization, agents cannot hope to succeed. Declaring who is the executive or initiating sponsor is important but without cascading sponsorship all the way to the end user, these end users with not be engaged, and the essential behavior and mindset shifts will not occur. Once again, the desired business results will not be fully realized.
Paul G. Ward
http://www.connerpartners.com
Luc, great comment about and examples of “local pets.” I agree with you, and sometimes it can be these little things turn into big sources of resistance for global ERP software implementations.
Paul, I agree with you. Executive sponsorship is arguably the most important critical success factors for any ERP implementation, whether it’s for a small organization or for a large, multi-national company. Some of our white papers cover this topic and other ERP implementation best practices.