As an ERP software system attorney who negotiates contracts and litigates disputes, I’ve seen four things that can doom a newly-implemented or upgraded ERP software system:
- The user signing the vendor’s template contract, which is always one-sided and disadvantages the user, without negotiation,
- The vendor over-promising what will be delivered and what it can do;
- Executives and senior managers thinking that the purchase decision is the goal of the process; and
- Employees at the acquiring company undermining the use and effectiveness of the ERP software system because of the changes it brings to their job and the organisation.
While problems resulting from the first two points are seen most-often, as an ERP software litigation attorney I am aware that the last two bullets can be a complicating factor, as well.
Indeed, even the most-successful ERP installation and integration can be crippled by employees who feel the ERP software will change their job dramatically – and may even worry that it will eliminate their position entirely. When muckraking journalist Upton Sinclair ran for Governor of California in the 1930s, he told an audience “It is difficult to get a man to understand something when his salary depends upon his not understanding it.”
Short-circuitinmg potential problems requires explaining what, how and why the new ERP software system is being introduced, and getting buy-in throughout the organization. Management consultants and HR types dub this “change management,” which simply means finding an effective method for introducing improved technology to a workforce. It is a necessary step, whether a legacy ERP software system is being updated and enhanced or an organization is making its first foray into ERP software.
There are at least five basic, relatively simple steps management can take to help ensure that internal resistance and fears won’t doom an ERP software project to failure:
Set and maintain realistic expectations– ERP software can give a tremendous boost to productivity but it does not happen the day after the system goes live. Promising the moon and not being able to reach it quickly undercuts confidence in the project. Ensuring that management, employees and line workers understand that the new software isn’t a magic potion gives implementation time to succeed.
Couple buy-in with the purchase decision– Getting people to feel involved in the decision does wonders for acceptance. A simple Survey Monkey questionnaire on the company Intranet, or conducting a poll by text message lets workers at all levels feel that their opinion is valued even if any advice they offer isn’t followed.
Provide training and then more training– Start with staff members who are “early adopters,” and who will accept a process that may change as the rollout unfolds. People need to experience the benefits of the new ERP system for themselves. And by all means, don’t get upset when some people need more training because no one becomes an expert after one session.
Identify And Use Influencers – Influencers should come from all ranks, from the C-suite to line workers, and with a variety of skill sets and backgrounds. They can make the changes stick because they will be role models for others. Avoid picking people who are extremely techno-literate or who wield a lot of power in the company. Their views tend to be dismissed by others who are slower to adopt to change.
Change Policies If Necessary– The thick policy manual that’s been around forever might need considerable updating if ERP is new to the business. Also, consider how to tie incentives to training on the software and then using it. Businesses get what they reward, and small tokens handed out frequently to many people can be much more powerful than big bonuses given once a year to a few who qualify by getting over a high bar.
Each of these steps are crucial to the successful implementation of an ERP software system. I’ve seen an organization’s management spend months fussing over the decision to acquire the system but give little or no thought to how it will introduce the powerful new tool to the managers and employees who will be using it. But by spending as much time thinking about “change management” principles, a company will help ensure that it maximizes the value of its investment and provide greater value to customers, clients and employees.
By Marcus Harris