You are about to embark, on or are in the middle of a major ERP project that’s going to change the way your company does business. You know how critical this new technology is to your organization’s future. You understand that nothing is more important than identifying the software with the best and most advanced features in its class.
New software isn’t what’s going to change your business. Think of it this way – your company does not succeed because of technology. It’s an enabler. Your organization is run by people. Technology gives employees tools to do their work differently and hopefully more efficiently. If configured correctly, it could enhance service to your customers. It can provide a foundation for your digital strategy in 2020 and beyond.
Think of an iPhone (or your favorite Android) – is the value really the technology itself? Or is it the new way that technology is used? Let’s look at an example where you want to meet friends for dinner and a movie. In the past you might have gone through a process resembling the following steps:
OLD TECH, OLD PROCESS
- Look up restaurants in the yellow pages and peruse a drawer full of menus
- Open a newspaper to check out the listings and settle on a time and theater
- Call your friends individually to agree on a time and places to meet
- Review a map to figure out directions
- If someone’s late, wait and hope they show up or start without them
- Get to the theater early enough to ensure tickets are not sold out
Now with the use of your smartphone, you go through the same exact set of steps to plan your outing but you use an app for each step:
NEW TECH, OLD PROCESS
- Look up restaurants on Yelp
- Pull up Fandango instead of the newspaper to research movies
- Send a WhatsApp message to each of your friends one-by-one to get confirmation
- Use Waze to plan out and commit to your route before departing
- Go to the theater early and then buy your tickets from the app
Has the tech really made your life better or easier, or have you just introduced a fancier way to get things done? What if instead you chose to use the technology as intended and did this:
NEW TECH, NEW PROCESS
- Start a group message to get everyone’s ideas on a movie and restaurant
- Buy your movie tickets online and have confirmation before leaving home
- Use navigation getting real-time traffic info that will suggest the best route
- If someone is delayed, they can send a message and say to go ahead and put in their order
So, the above scenarios emphasize there’s nothing wrong with using new tech for old processes, but it probably doesn’t make a lot of sense. It is only a true differentiator (and financially worth it) if you use the new tech to drive new processes.
What this means for your ERP project
It’s no different for organizations choosing to invest time and money for new technology. If you spend big bucks on a new system with the greatest in Artificial Intelligence, BI, IoT, and every other wonderful acronym of new technology, but your employees keep doing the same things but with a different tool, you have lost. Perhaps you’ll see some improvements, but you might also be dealing with people who aren’t as sure of how to do their jobs anymore and are actually worse off.
So, what does this mean for your big ERP project? It means you can’t count on technology to fully understand your business challenges or to smooth a path to change.
And caution: beware of software sellers telling you what they view as “ERP best practices.” You must dedicate time to developing things like an overarching strategy and implementation readiness plan. Today’s new software is highly configurable and customizable.
If the thought of all this prep seems overwhelming, you’ll be far better off with guidance from an agnostic ERP consultant like Third Stage Consulting. Not only will they challenge you on the completeness of your strategy (in a good way) but oversee how it’s incorporated.
Organizational change management is the backbone of your ERP project
Selecting modern ERP software that’s a good fit, while important, is not going to get you to the finish line. You need to implement new technology that your employees will adopt. This is the organizational change management (OCM) backbone of your project.
Consider my examples of the different ways people adapt to iPhones; it will work similarly when you introduce new technology to your workplace. People will have different reactions ranging from acceptance to negative rebuffing. When new tech is not introduced carefully, correctly and completely it has a better than average chance of sinking your entire project. A valued added reseller (VAR) won’t have the depth of knowledge in OCM or project governance that a good independent ERP consultant has – so help is available.
Underestimating the importance of buy-in is a common misstep. Anticipate that each employee may have different feelings about change and their ability to successfully navigate it. Your company’s culture is probably unique, so your approach must acknowledge, involve and inform.
Hopefully I hit on some helpful examples and salient points to consider as you navigate your ERP/digital transformation initiative. To recap:
New technology should support your strategy and vision. With that said, there will be lots of decisions to be made, and you need to control this. Be sure to design processes that have the potential to bolster your business (just don’t automate or replicate existing processes).
New software can offer the ability to scale, the potential of greater customer satisfaction, better inventory management and a host of other things. Stay true to knowing and shepherding your top priorities.
Consider out of the box ERP software solutions designed for non-differentiating processes. As an example, an out-of-the-box solution for generating customer invoices will probably work just fine (even if it’s not the same process you use today). If someone tells there is only one “right” software for your company they are probably wrong, and choosing software is not the most important part of your ERP project.
The thought of new technology will elicit different emotions from employees. Some may fear the ability to learn new processes while others may be concerned about job loss. Adoption is personal and will differ by employee.
Your company will view this investment in technology as exciting and positive but expect some employees to be reactive (or even irrational). This is best addressed through a comprehensive change management strategy and OCM plan. Organizational change management activities need to begin before any software is selected and continue well after implementation of new technology. This is even more important than the software you choose.
The psychology of an ERP project is complex. Understanding, acknowledging, and planning for differences in employee behavior needs to be a frequent and ongoing conversation. Just because you offer training and think the new technology is logical, doesn’t mean it will be accepted.