The term “organizational change management” has many meanings. Some understand it. Most don’t. And most ERP implementations fail because of it. Because of their failure to understand what is organizational change management, most digital transformation initiatives lack a solid ERP organizational change management plan.
We find that most project teams and systems integrators recognize the need for the basics. Employee training and basic communications are two of the most common activities. These two things unfortunately barely scratch the surface of what is required to effect real and lasting change. Much more is required to make digital transformations successful.
Here are five things that are probably missing from your organizational change management plan. They should be integrated into your transformation if you want it to be successful.
1. Skills assessment and organizational design
System integrators such as Deloitte, Capgemini, and Deloitte view organizational impact at the software / transactional level. However, there are broader changes to job descriptions and required skills that extend well beyond software workflows.
For example, customer service reps may not have access to much more customer history and predictive analytics. How should they be using this information to perform their jobs more effectively? What will they do with the time they save from not having to manually search for information? These questions need to be clearly defined so the organization is aligned with the implementation, and vice versa.
2. Implementing organizational changes prior to your ERP implementation
Contrary to popular belief, there is no need to wait until for new software to go-live before implementing some process and organizational changes. Chances are, some operating procedures can be effectively implemented even before the software. The benefits of this proactive approach are numerous. The primary advantage is that you are able to phase changes over time rather than overloading the organization with mass changes on the day of go-live.
3. Cultural transformation within your organizational change management plan
Most people don’t equate digital transformation to culture. But, the changes to your culture are a lot more significant than you think. We have written about how culture is the most overlooked component of organizational change strategies. This is especially true for global digital transformations.
Think about a retailer embarking on a digital transformation or ERP implementation. A recent client of mine decided to leverage technology to help them better compete with Amazon via an integrated omni-channel strategy. This required different ways of thinking and acting – not just a new way of using a back-office ERP system. It is important that your organizational change plan include dedicated strategies to help transform the culture of your company.
4. IT transformation and center of excellence
Digital transformations have significant impacts on your IT department. This is especially true for big SAP S4/HANA, Microsoft Dynamics 365, and Oracle Cloud Suite implementations. Your IT organization needs to develop new skills and competencies to support this new technology going forward.
This is where organizational change management can help. It is important to identify the skills required in the future, and in some cases, which jobs may need to be created to build the necessary competencies. In addition, effective organizational change management strategies will ensure that the IT group is part of a cross-functional center of excellence that supports ongoing improvements to the company’s operations going forward.
5. Benefits realization
Organizational change management is often viewed as a “soft” competency that isn’t really required. This is one of the biggest misconceptions of this critical domain.
Organizational change is one thing that has a material impact on tangible business results. Moreover, you can’t achieve what you don’t measure. The goal of your organizational change management plan should be to bridge the gap between the intangible side of human change and measurable business benefits. This is where a robust benefits realization plan can help keep your team focused on the highest-value improvements that will transform your business.
In many ways, organizational change management is the missing link in most digital transformation and ERP initiatives. My experience as an SAP expert witness and as a Microsoft Dynamics expert witness shows that organizational change is one of the most critical root causes of success and failure.
Contact me to discuss what your organizational change plan might look like for your organization. I’m happy to help.