Change Management ROI: How to Maximize it

While you may know that an organizational change management (OCM) plan is an essential part of an enterprise resource planning (ERP) project, do you know the actual steps you need to take to maximize your change management ROI?

It’s easy to develop an OCM plan with good intentions, only to find it’s inadequate for the scope and complexity of your project. 

Today, we’re sharing how to derive maximum benefits from your OCM approach so you can lay the groundwork for a successful project. 

Understanding the Human Side of ERP

While there are usually plenty of resources in place to handle the technical components of a project, the human side of the project often falls by the wayside. Business leaders become so wrapped up in selecting and implementing the right software that they fail to properly prepare their workforce. 

A change management plan is designed to focus on the human side of an ERP implementation. This side of the project is essential because it directly influences three of the main human factors that determine ERP success:

• Speed of Adoption – This refers to how quickly your employees adapt to the system. How long does it take them to embrace (and use) the new technology, workflows, and job roles?
• Ultimate Utilization – This measures the number of employees that are using the ERP system and demonstrating buy-in.
• Proficiency – This measures how well those employees are performing their jobs using the new system.

If even one of these factors is lagging, it’s the equivalent of low change management ROI, and subsequently, low ERP ROI.

3 Steps to Optimize Your Change Management ROI

Step 1: Mitigate Change Resistance

Any time someone is asked to learn new processes or abandon a preferred best practice, there’s bound to be some level of resistance. 

To minimize any dissent and keep the project moving forward, you must understand the ADKAR model:

• Awareness
• Desire
• Knowledge
• Ability
• Reinforcement

Then, conduct an ADKAR Assessment where you evaluate how well you’re meeting employees’ needs in each of these areas. If possible, managers should complete the ADKAR process first, followed by the employees in their departments. 

Desire is one of the components of ADKAR that many organizations overlook. They see change as a mandate that employees will follow whether or not they desire it.

While this may be the case with some employees, software usage isn’t the ultimate goal anyway. Proficiency is more important, and becoming proficient requires a desire to change.

Another aspect of ADKAR that many organizations forget is employees’ need for reinforcement. When employees revert to old processes, this may indicate the need for reinforcement. The best way to reinforce change is through recurrent training and frequent communication.

Step 2: Prepare Change Leaders

While you need to make sure that your employees have everything they need for the upcoming change, it’s equally important to equip your change leaders as they prepare to spearhead the effort. 

These are the people who will become the face and voice of your project. They’ll communicate key updates, field user questions, and help boost morale.

As such, each change leader should:

• Understand everything that the change entails
• Understand how those changes will impact their teams and why
• Have the opportunity to express concerns about the change
• Commit to supporting the change in its entirety
• Possess the core competencies required for this role

In terms of competencies, change leaders should have the ability to wear many hats because in addition to being communicators and advocates for the project, they’ll also act as liaisons, resistance managers, and project coaches. 

Step 3: Coach Employees Through the Change

Managers who assume a coaching role can significantly impact how employees perceive change. By listening to employees’ concerns, these managers can identify barriers to change and develop a plan to address them.

Executives can also assume this role. In fact, they can be some of the most effective coaches because of their level of influence.

Regardless of who you assign to this role, you must ensure that they follow certain best practices:

• Remove barriers – Barriers to change may relate to family, personal issues, physical limitations or money. Coaches should fully understand the individual situation of each employee to determine how to remove barriers.
• Build desire by providing choices – Employees need to know in simple terms what their choices are and what consequences they face for making a particular choice. This puts a level of control back into the hands of employees.
• Create hope – Employees are more open to change when you frame it as an opportunity for a better future. Coaches can create desire for change among employees by expressing their own excitement and enthusiasm. While this tactic is effective, it can be misused if coaches create false hope and don’t believe in the change themselves.
• Convert the strongest dissenters – By focusing their energy on the most vocal dissenters, coaches can reduce the spread of negativity. Another reason that converting vocal dissenters is worthwhile is because they may be some of the most vocal advocates when converted.
• Highlight the tangible benefits – Case studies and testimonials can tangibly demonstrate the benefits of change. Conducting pilot programs and sharing the successful outcomes is also useful for generating buy-in.
• Use money or power – This tactic works well with mid-level and senior managers that are critical about the success of the project. Offering higher pay in exchange for project support can be worth the investment.

Maximize the Benefits of Your OCM Investment

It takes a deep investment of internal resources, time, and budget to get organizational change management right. Yet, when it is done correctly, it can result in quantifiable benefits. 

If you want to make the most of your OCM investment, our team of change management consultants can help. Contact us below for a free consultation.