Lowering ERP Total Cost of Ownership through Effective Change Management

Written By: Eric Kimberling
Date: June 21, 2018

The acceptance of change management has gotten significantly better over the past several years, and many organizations are even asking for it. However, when budgets become tight it is still one of the first things to go. It is time to change this course of action and give change management the spotlight it deserves.

Consider the possibility that increasing a change management budget may actually lower the total cost of an ERP implementation. I do like to mess with CFO’s heads, but this is not one of those times. By doubling down on an effective OCM program, your total project costs when all said and done will likely be lower. Here’s a few reasons why:

  • System training and adoption is one of the more difficult and expensive tasks during an implementation. If users are on-board from the start, they will pay more attention during training, which in turn reduces the amount of retraining and scheduling needed.
  • Resistance to change exists in every organization across the globe. If you think your company is different you are wrong. If areas of resistance are not identified and dealt with up front, they will slow down the project at critical milestones. Slowing momentum and changing project timelines is a major cause of budget overruns.
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  • People don’t get it on the first round of communications. If you limit messaging regarding the project, goals and objectives to only a few messages, there will be significant population that simply did not get, overlooked or forgot the message that was sent. When communications are missed, it leads to confusion and resistance. Essentially back to square one.
  • If change impacts are not understood and documented, how in the world are people simply going to change what they do? Pursuing an ERP implementation without mapping process change to people’s jobs is like getting in car in a foreign county without navigation. You’ll go somewhere, but likely not where you want to. It with then cost more in time, nerves and gas to get to where you originally hoped to go.

Change needs to be respected. As much as people want to change, change is not easy. It can’t be forced or demanded and needs to be planned well in advance. When setting a budget for ERP, leadership should be challenged to include hefty OCM budgets from the start. In the end, while the upfront cost might be higher than some are comfortable with, the implementation will go smoothly and expensive errors will be avoided.

Author:
Eric Kimberling
Eric is known globally as a thought leader in the ERP consulting space. He has helped hundreds of high-profile enterprises worldwide with their technology initiatives, including Nucor Steel, Fisher and Paykel Healthcare, Kodak, Coors, Boeing, and Duke Energy. He has helped manage ERP implementations and reengineer global supply chains across the world.
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