What is ERP?
ERP (Enterprise Resources Planning) software or systems can be described as a single complete system which aims at integrating all business processes and the sub processes in a single system. This system is integrated in an organization so that the business goals are managed and organized effectively and efficiently. Organizations implement the ERP system to manage their day-to-day business activities such as accounting, procurement, project management, risk management and compliance, and supply chain operations in a more effective way. The organization’s needs determine which of the various ERP modules will be implemented.
Why do organisations move to ERP Systems?
Organisations move away from systems that are not integrated (also referred to as standalone systems) to ERP systems to obtain some of the following benefits:
- To get better reporting tools with real-time information.
- To improve business processes.
- Better access to customer information.
- Improved inventory costs.
- To boost cash flow.
- To assist with cost savings.
- Better data & cloud security
What is meant by Change Management?
Prosci, which is the world leader in Change Management, defines change management as the application of structured processes and set of tools for leading the people side of change to achieve a desired outcome. In short, Change Management focuses on the people side of organisational changes. The more important the people side of a change becomes to get to the ROI or realise the business case; the bigger the role Change Management must play in taking organisations through the change.
What happens when organisations implement ERP Systems?
When organisations implement ERP systems, the following often form part of the implementation of the ERP system:
- Organisations may change some or many of their business processes. When they are part of a global organisation, businesses try and standardise their business processes and use global templates. This can bring changes to current business processes. With this it also means “convincing” the End Users that their business is not as unique as they think, and that global processes and templates are the right way to go
- When implementing ERP, organisations are often advised to stay as close to the original system (also called the vanilla version) as possible. This reduces the current development costs and make it easier and less costly when future upgrades are done. This can imply that organisations need to change business processes to be able to use the “vanilla version”
- Implementing an ERP system also means training staff on the new system and linking roles to End Users
- It could also imply that staff that previously did not do any computer related work, now need to become computer literate and follow system driven processes
- The change could also mean that End Users need to comply to timelines as the process driven value chain requires them to comply with strict timelines
- It also requires staff to do all their work on the system to have up to date business information available to improve accurate business decisions.
The above clearly indicates that with the implementation of an ERP system, staff in the organisation are affected to varying degrees. As people begin to react to the change, they may start to feel concern, anger, resentment, or fear. They may resist the change actively or passively. They may feel the need to express their feelings and concerns and vent their anger. This is where Change Management plays a role.
Also Read: 5 Tips To Managing Resistance To Change
What role can Change Management play?
The diagrams below from Prosci indicate the “link” between the Technical Side and the People Side of a change.
In the table below the close relationship between The Technical Side and the People Side will be described in more detail.
Change Management (the People Side of the ERP implementation) works closely with Project Management (the Technical Side of the ERP Implementation). The above indicates that when organisations implement ERP systems, the management of the people side is very important. Therefore Change Management is needed in any ERP implementation as well as other organisational changes.
Written By Willie Jooste
Wondering how you can intergrate Project Management and Change Management?
The disciplines of change management and project management cross paths throughout the execution of a project or initiative. Each brings necessary and critical structure for effectively implementing change and realizing results.
Change management and project management, in a combined effort, present a unified value proposition for achieving successful change by providing a foundation for the tactical integration at the people, process and tool dimensions.
Click here to listen to a webinar on the importance of these complementary disciplines that share a common objective – change success!