What is ERP change management; and what should it be?

Despite decades of implementing ERP systems, projects continue to disappoint or to go off the rails entirely. For every resounding success, there appears to be a stunning failure. The reasons for these failures are many and varied but one that shows up regularly in results analysis is poor or non-existent change management.

Traditionally the reason for this has been that the amount of change involved when a company moves to a new system has been under-estimated. It can often appear that, after go-live, buyers will be continuing to raise purchase orders, sales office staff will be continuing to enter sales orders and accounts staff will be continuing to process invoices; so nothing is really changing and all that is required is some training so that users can get used to new screens.

But companies should not confuse the scale of change with the impact of change: the two are frequently disproportionate to one another. A new system isn't just about new screens: underneath the surface, much will be different. Inevitably, new things will have to be done, old things will have to be done in new ways, and jobs may even cross departmental boundaries (e.g. in the old system, sales invoices may have been raised by accounts but, in the new, it might have to be a sales office task or it might even be an automatic routine following the warehouse despatch transaction).

Some companies, such as start-ups, positively thrive on change – it is in their DNA. Others, particularly in highly-regulated industries, instinctively resist it. In the pharmaceutical industry, for example, changing the formulation of a medicine is a very big deal indeed, and companies in aerospace can find that simply changing the machine that a component is processed on can mean that a complete recertification is required: a time-consuming and costly exercise. So many will need help with change and many of these, lacking sufficient in-house skills, will bring in external consultant change managers; but even these can have problems.

Change is often resisted not only at a corporate level, but at an individual employee level also. Some employees, although recognizing the weaknesses and inadequacies of the existing system, will genuinely believe “better the devil you know”. The more-experienced ones will know how to get around many of the problems in the old system and may well enjoy the kudos that gives them in the eyes of junior staff (and, indeed, of management). Some people also resist change because they lack confidence in their ability to be able to cope with something new, particularly if they are not used to that.

In both instances, the problem is that, when someone is brought in from outside to manage change, change can be seen as being their responsibility, and not that of regular managers and employees, so when they leave, the support they have been giving leaves with them. The answer is that companies should bring in change managers not to work on specific projects but to teach them how to manage change themselves. Change management needs to move from being a tick-box on a project plan to being a mindset, a set of tools that are in continual use, and a methodology that everyone in the company can adopt with confidence.

Change is inevitable, even eventually for the companies that resist it, and it is best to confront it and not just to react to it. When that happens; ERP failure will start to be a thing of the past.