You’ve been called to a meeting to kick off an ERP implementation. Executives are present, along with divisional leaders and a handful of the company’s brightest employees. The discussion kicks off with an executive who states: “Over the next 6 to 12 to 18 months, we’re going to change our current software. We’ll automate paper processes, build in protection to ensure passing FDA audits, and much more. All it will take is…”
At this moment, you’re not thinking about the SOPs or the warehouse handhelds. Like any great leader, you’re thinking about the impact on your people. How do you ensure that your team not only survives but thrives through the implementation of an ERP solution? Success hinges on change management as part of a well-managed project.
Change management is a critical part of Merit Solutions’ implementation methodology, which is one of the things that makes me particularly proud of the work we do. Based on decades of collective experience, including rescuing projects that have gone wrong from other system integrators, we know that even the best technology is only as good as its implementation. If a life science organization invests in business applications and fails to bring users along on the journey, adoption and productivity wane, and the benefits of the investment aren’t quickly realized.
While it requires both technical and business acumen, effective change management is all about an intentional focus on individuals and helping them on their journey through change. There’s a saying in the tech community that “no one replaces their ERP for fun,” and there’s a reason for it. Implementing a new business solution is a lot of work. It requires employees at all levels to keep doing their day job while they learn a new system, and since the process is a marathon, not a sprint, it can wear people out. If change management is part of the methodology, users can be energized by starting with the end goal in mind and celebrating each milestone accomplishment along the way.
This blog will highlight some of the fundamentals of ERP implementation and change management that we practice with our customers. This doesn’t negate the incredible efforts of many companies’ organizational development or human resources departments but rather complements those efforts throughout the implementation process.
Agile Implementation Methodology
As companies started to shift to cloud platforms to ensure security, scalability, and help support regulatory compliance and as the “there’s an app for it” culture began to permeate our view of the world, Merit made the shift from a traditional implementation methodology to an agile one. A traditional methodology is sometimes described as “waterfall,” in which big milestones drive big projects and occasionally big surprises for users. The agile approach we now follow is sometimes called “iterative,” with a series of steps repeated and continuously improved upon. One of the most significant differences is the frequency and breadth of engagement with end users. This approach allows us to eliminate “big bang” solutions and bring users along on the implementation journey, so they feel a sense of ownership to the solution. Ultimately, it drives better end-user adoption and faster stabilization of the solution after go-live.
In an agile or iterative implementation, it’s critical to understand the key workstreams to success:
- Project Management – aligned with the implementation methodology addressing the fundamentals of managing a project such as scope, timeline, budget, resources, and stakeholders.
- Change Management – to prepare, support, and help individuals, teams, and organizations make organizational change. While change management doesn’t eliminate that resistance, it does aim to mitigate it.
- Customer Leadership – where strategy is articulated, the organization’s direction is set, and the appropriate leadership is enlisted to set the change in motion. It involves senior leaders, change practitioners, project teams, subject matter experts (SMEs), people managers, and the people on the front line all play a role.
A Word About The Importance of Sponsorship
The most critical leadership role is that of the project sponsor, who governs the team and enables change. The project sponsor’s involvement (or lack of it) is the number one factor in change management success or its failure. When a good project sponsor is at work, it’s barely noticeable. But when a project lacks a good sponsor, it’s painfully obvious.
Traits of a successful customer project sponsor include:
- Strong communication skills and the ability to create engagement through passion and enthusiasm.
- Visible, supportive, approachable, and available,
- A recognized leader—preferably one who signs the checks at the end of the month.
When picking a sponsor, it’s essential to remember that employees quickly lose faith when they know the sponsor has a history of leading failed change efforts or is not engaged, present, or visible.
Why is Change Management Important?
The simple answer is ROI.
When major changes are made in an organization—introducing new technology, for example—experience tells us we can safely assume two things will happen. First, there will be a decline in productivity. And second, there will be an increase in resistance. The degree of impact is largely dependent upon the effectiveness of the change management that’s in place.
On the organizational level, change management is a leadership competency for enabling change within the organization; it’s also a strategic capability designed to increase change capacity and responsiveness. A well-executed change management process reduces the chances that a project will fail while increasing the probability of project success. It helps manage and, in many cases, mitigate employee resistance. It helps capture people-dependent ROI. And last but certainly not least, it provides benefits for the future by helping build change competency into the organization. Research shows that when change management is practiced, the chances of staying within the budget nearly double. Practicing change management also makes it five times more likely that the timeline will be met.
Understanding the Difference Between Change Management and Project Management
As I alluded to earlier, change management and project management are often thought of as the same thing when they are, in fact, quite different. Project management (technology) and change management (people) have a joint value proposition to achieve the project objectives, but they arrive at that destination via different avenues.
Technology is at the center of project management, which strives to design, develop, and deliver a roadmap toward the desired outcome. Change management, on the other hand, is focused on guidance, adoption, and use. The people who will use the technology at the core of project management are central to change management.
Important aspects of project management are statements of work, project charters, business cases, work breakdown structures, budget estimations, resource allocations, schedules, and tracking. Not surprisingly, change management draws on more human-centric resources, such as plans for communications, coaching, and training, individual change models, readiness assessments, sponsor roadmaps, resistance management, and reinforcement.
How to Sell Change Management to Your Colleagues and Company
Selling change management to an organization and its leadership is probably the most difficult aspect of the process, but it’s the easiest to explain. Throughout my experience, I’ve found that the language most commonly spoken and understood by business leaders is financial, so I advise clients to lean on an ROI model. This includes emphasizing the speed of adoption, proficiency, or how well individuals are performing, and ultimate utilization, or how many employees are demonstrating buy-in. The next and most crucial step in the selling process is to show each factor’s impact on overall ROI.
The Merit Solutions Approach
Change management has undergone significant change in this era of cloud-based technology and software-as-a-service (SAAS). The process of implementing new technology is a lot different than it was a mere decade ago.
There are a few things, however, that have stayed constant. As we tell our clients, the need to effectively plan for and manage the change that goes hand in hand with implementation is as urgent as ever. That’s why we kick off our implementations by talking about how to best approach the process together:
- We discuss the importance of preparing people in an organization for the digital transformation that’s ahead.
- We help our clients develop a customized and scaled strategy with the necessary sponsorship and team structure.
- We help create plans that will help move both individuals and the organization as a whole through change.
- We help our clients ensure that the change is adopted and sustained to meet or exceed business objectives. And we promote early user adoption and mitigation of resistance with our iterative methodology. (See how.)
We know from experience that proper preparation goes a long way toward helping everyone approach the new solution with acceptance rather than resistance. That’s significantly more important than it may seem at first because the bottom line is that regardless of how good the technology is once it’s implemented, the project will not be successful if teams don’t embrace it.
Please get in touch with us to learn more about how Merit Solutions can help you determine your organization’s best change management strategy. We’re also offering a free 15-30-minute complimentary consultation to discuss how Merit Solutions can help you hit your business goals and make your processes more efficient while maintaining rigorous compliance standards.