ERP Is a Business Solution, Not Just a Technology Tool

Tech companies are notorious for believing that the solutions they propose to a potential user’s pain point are the best answer anyone ever thought of. Especially when it comes to ERP software systems, too often many developers, vendors and integrators ignore or overlook the reality that the technology they sell is actually a business solution, not simply a technology tool.

In the process of reviewing pitches and proposals from sellers, C-suite executives – including Chief Technology Officers – need to remember that SAP, Oracle, Microsoft and all the rest are in the tech business so that is what they focus on selling. But for an ERP software system to have a measurable, positive impact on an organization, whether being installed in the private or public sector, it is incumbent to keep in mind that for as sophisticated as the software may be, it will be used by people trying to do their job well..

It is the responsibility of a company to ensure that as it plans for rolling out its new ERP software system that it has a plan to accommodate all of the change management aspects of the project so people are not merely trained in how to use the new ERP software system but also to understand how their job will change. This is important so that both the system and your people will succeed.

But this does not absolve the vendor and integrator from helping with the human aspect of their product.

ERP Means Change Management

As complex as an ERP software system may be, if the vendor and integrator understand the user’s business it is possible for everything to go smoothly on the day the system goes live from a technical point of view. 

But this is only half of the problem. The other half is understanding that the data being collected and distributed will be going to human beings. Since ERP means a major shift in how an organization is managed, it also means a major shift in how employees work.

So, in many respects, the user experience with ERP is at least as important or perhaps more so than all of the coding that sits behind a terminal in someone’s office or work station. This doesn’t mean just easy-to-understand screens; it means easy-to-understand work processes.

But ERP change management cannot be handed off to human resources the way explaining a new aspect of the employee benefit plan can be assigned. It requires an effort that involves the vendor and integrator as much as it does HR.

As a result, it is necessary for the contract with both the vendor and integrator of the ERP software system to specify what each entity’s role in the change management process will be. The contract provisions need to be specific, including detailing the seller’s experience and expertise in handling change management in similar organizations and sectors. If their direct experience is weak in this area, it may signal a warning of other problems with the solution they are proposing you buy.

Serious Implications

Regardless of whether an organization is updating a legacy system or implementing an ERP software system for the first time, it needs to recognize that it is acquiring a management solution that happens to use technology. Many vendors and integrators sell ERP software systems as just a technology tool.

User experience and an understanding of the human factors associated with digital transformation are as important to achieving success as is integrating the system with the organization’s existing processes and infrastructure. 

As attorneys whose legal careers have focused on negotiating and drafting contracts for ERP software systems, we have advised clients on ensuring that change management is part of the process and must be incorporated into the agreement with a vendor and integrator. Executives and senior managers cannot lull themselves into thinking that the purchase decision is the end-goal of the process. Nor can they allow employees to undermine the use and effectiveness of the ERP software system because they don’t grasp the changes it brings to their job or the organization.

If you have questions about the role of change management in a successful ERP software integration, feel free to call us. We’ll be happy to share our experience and offer suggestions.