What is Effective Change Management? [A Key ERP Project Success Factor]

Whether you’re planning an ERP implementation or a digital transformation, you must remember one thing: 

It’s not a technology project; it’s a business initiative.

Business initiatives view technology as a tool for enabling organizational goals. Organizations that view their project as a business initiative know that their digital strategy must align with their overall business strategy. They also know that their digital strategy will falter if all business stakeholders aren’t ready to embrace change.

Today, we’re talking about how to engage end-users and other project stakeholders to secure project buy-in and ensure full system adoption. We’ll discuss the meaning of “organizational change management” and illustrate what effective change management looks like.

What is Change Management and Why is it so Challenging?​

Organizational change management (OCM) is a structured approach to transitioning individuals, teams, and organizations from a current state to a desired future state.

While the concept of change management is relatively straightforward, it’s not easy to effectively execute. Here’s why:

1. Resistance to Change: Employees may feel threatened by new processes and technology and may worry about their ability to adapt. 
2. Lack of Leadership Support: Without strong leadership support, change initiatives often fail due to inadequate resources and commitment. 
3. Insufficient Communication: A lack of clear and consistent communication can lead to confusion and misalignment among stakeholders. 
4. Inadequate Training and Support: Without proper training and ongoing support, employees may struggle to learn new processes and technologies.

What is Effective Change Management? [5 Key Components]

Organizational changes are exciting for the “inner circle” but are sometimes frightening for end-users. 

Fortunately, with effective change management, you can help end-users and other project stakeholders adapt to new business processes and systems. Here are some best practices to follow.

1. Conducting a Readiness Assessment​

An organizational readiness assessment can help you anticipate change barriers, like significant change resistance. 

The first step is understanding the degree of change you’re planning – are you just replacing an accounting system, or are you transforming your entire digital strategy?

Once you understand the scale of the change and know all affected departments, you should begin to identify change barriers so you can proactively address them.

Many of these barriers are difficult to anticipate. It can be done, though.

Our ERP consultants recently worked with a manufacturing company that didn’t want to invest in an ERP implementation unless they could be sure that employees would embrace the new system. We helped the company conduct an organizational assessment to identify potential change barriers and put the wheels in motion to address them. 

Across our entire client base, some of the most common barriers we’ve seen include:

• Skills Gaps: Employees may lack the necessary skills to adapt to new systems and processes, leading to frustration and resistance.
• Cultural Resistance: Employees may have ingrained ways of working and a strong attachment to the current state.
• Fear of Job Loss: Change, especially technological, can spark fear of redundancy among employees, causing anxiety and resistance.
• Lack of Trust in Leadership: If employees don’t trust the management team, they are less likely to buy into change initiatives.
• Insufficient Communication: Poor communication about the change process can lead to misinformation and uncertainty among employees.
• Previous Negative Experiences: Past experiences with poorly managed change initiatives can make employees skeptical and resistant to new changes.
• Data Silos: Siloed departments and outdated technology can block the flow of information and impede data-driven decision-making.

2. Communicating With All Stakeholders​

When it comes to effective change management, communication must reach every organizational level.

Our change management consultants frequently help clients develop communication plans outlining how and when project team members will communicate with project stakeholders. Through effective communication, our clients have brought their end-users into the “inner circle,” from which they shouldn’t have been excluded to begin with.

By sharing your “secrets” about the reason behind the change, the impacts of the change, and the expected benefits, you can help employees visualize the outcome. This instills confidence and increases system adoption.

3. Prioritizing Project Sponsorship​

Without visible and active leadership, ERP implementations often lack direction and momentum. Change management sponsorship ensures that your project has the necessary resources and support to succeed. 

It’s important to make a distinction between sponsorship and support. Executive leaders can support an idea in theory but not sponsor it in practice.

To secure hands-on project sponsorship, we recommend creating a sponsorship roadmap to facilitate conversations with potential sponsors. Two of the key points you must communicate to sponsors are why the change is required and the level of engagement you would need from them.

While you may have only one project sponsor, this person should be supported by a coalition of leaders, stakeholders, and decision-makers. When all of these sponsors support the change with their actions, and not just their words, their peers typically follow suit.

4. Training End-Users​

Comprehensive training is vital for ensuring that users can effectively use new technology, whether it’s an ERP system, SCM system, or another type of enterprise software. 

Your software vendor may only train your core project team, so it’s up to you to design an end-user training strategy that encompasses all levels and departments that will be impacted by the change.

5. Measuring Success

As you roll out your change management plan, it’s important to regularly measure progress. 

Celebrating milestones maintains your momentum and helps motivate employees. 

On the flip side, addressing shortcomings helps you stay on course throughout the project and post-implementation.

Our ERP selection consultants always tell clients that ongoing optimization is essential during the first year after ERP go-live.

Without Employee Buy-In, Your New Software Will Sit on the Shelf​

As the business environment continues to evolve, mastering change management will remain a key differentiator for long-term success.

Now that you know the components of effective change management, it’s time to find a team of experts that can develop a plan tailored to your unique needs.

Our organizational change management consultants can help you understand the components of successful change management in more detail. Contact us below for a free consultation.