SAP and Change Management

Editor's Note: Take a look at our featured best practice, Digital Transformation Strategy (145-slide PowerPoint presentation). Digital Transformation is being embraced by organizations across most industries, as the role of technology shifts from being a business enabler to a business driver. This has only been accelerated by the COVID-19 global pandemic. Thus, to remain competitive and outcompete in today's fast paced, [read more]

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As a “seasoned” Change Manager, I have been involved in many diverse projects focusing on managing the business aspect of technology implementations; e.g. ERP (SAP, Oracle, Microsoft Dynamics), Core Banking Systems, Business Intelligence, Case Working and Knowledge Management solutions, and the like.

To this day, I continue to be asked why is there a need to have involvement from a Change Manager, because a technology implementation “is what it is” and once implemented, the business should just be able to “get on and work with it.” But, it’s not quite as simple as that, because if you break down the impact of a technology implementation on a business, it would go something like this:

• It will change the way a business operates.
• Key stakeholders will want and need to be involved and communicated with.
• Processes will change.
• Organisation structures will change.
• The readiness of the business will need to be measured to ensure a smooth go-live.
• There will be a need to train and educate people in new ways of working.
• Business benefits as set out in the business case will need to be tracked.
• Once people gain competence with the new technology they should be encouraged to continuously improve ways of working into the future.

That sounds very simple, but actually it’s not, because all of these things involve people and they will need to have their expectations and perceptions managed.

Technology implementations aimed at making an organisation more efficient have become larger and more critical in recent years and now represent a major challenge for organisations. Despite improved technical functionality and reliability there are still project overruns, delays and sometimes downright failure. Research continues to show that between 30% and 70% of technology implementations either fail to meet their targeted benefits or stall and/or overrun. Problems are typically not related to the system or to technical issues surrounding the software but instead are often due to business related issues. One of the main reasons cited for this failure rate is that projects are usually managed from a technical perspective by Project Managers who are driven by milestones and deliverables but lack the necessary “soft skills” to deal effectively with the people side of change.

Using SAP (the market leader in ERP solutions) as an example, every implementation of a SAP solution should take advantage of Change Management. SAP’s long history of developing enterprise solutions have helped develop best practices that include a lot of tools and better ways of working within an organisation. It is important that these issues are taken into account when defining the scope of SAP implementations. So Change Management should be an integral part of any SAP implementation to ensure that:

• Employees have a solid understanding of why change is happening.
• Employees are engaged in both the solution and the change.
• Training will be used to build knowledge after employees have made the personal decision to support the change.
• Resistance is identified and dealt with early in the process.
• Senior leaders demonstrate their own and the organisation’s commitment to the change.
• Communications are segmented and customised for different stakeholders answering the questions that they care about.
• Momentum is built throughout different areas and levels within the organisation.
• Changes are less painful to the organisation and to the employees.
• A coalition of support among senior leaders and managers creates momentum throughout the organisation.
• The probability of meeting project objectives is increased.
• The organisation begins to build a history of successful change, creating a better ‘backdrop’ for the next change initiative.

And finally the following three things, taken from Panorama Consulting 2013 ERP Report, that will help you and your project team achieve ERP success are:

1. Clearly define success.

We hear it all the time: for some organizations, anything is better than the ERP system they currently have in place. However, most organizations also aren’t spending millions on new ERP software just to realise an incremental improvement. Instead, most are looking for a tangible return on the investment in that software, just as they would expect from an investment in an acquisition or any other major capital investment. The problem is that executives generally don’t clearly articulate to the organization what exactly they expect from the new ERP system and how they will determine whether or not the implementation is ultimately successful. The business case should be an important mechanism to not only justify the investment in the ERP system but also to define what will constitute ERP success.

2. Articulate expected process improvements.

Similarly, expected business process improvements should be clearly defined and articulated to the organization. It’s not enough to simply suggest that the software is going to make business processes better. Those process improvements should be clearly defined and documented for employees so they can enable some of the process improvements. Your people – not the ERP software – will ultimately determine whether or not the process improvements stick, so rather than assume people won’t revert back to their inefficient manual processes and spreadsheets, it is much more effective to define the expected business processes and communicate changes to employees accordingly. This will also make your organizational change management activities much more effective in the long-run.

3. Conduct post-implementation audit.

Even in a perfect world, measurable business goals and process improvements aren’t going to happen overnight. Beginning 60 to 90 days after implementation, your team should conduct a post-implementation audit to ensure that actual results are measured and compared to expected business benefits. In addition, these audits identify where process improvements are breaking down or presenting additional opportunities for improvement. Although it can be a harrowing exercise since it will inevitably reveal organizational issues and business process deficiencies, it is an important way to identify and correct root causes for the benefit shortcomings. Typically, these audits will reveal low-hanging fruit that can be remediated with relatively simple prescriptions, such as refresher training or tweaks to business processes or software configuration. After spending millions of dollars on an ERP implementation, these investments in post-implementation optimization are relatively immaterial in the grand scheme of things.

Over the last 25-years or so I have developed and implemented many bespoke change approaches & strategies for organisations implementing SAP (and other technology solutions) to enable them to achieve considerable ROI and business benefit. These bespoke approaches have used as their basis my Practical Framework Approach to Change which consists of the following components:

• Sponsorship — identifying and working with a Sponsor to ensure commitment to the change initiative and to regularly engage with them in relation to their key responsibilities, visibility, building support, communication responsibilities, managing resistance, setting priorities and celebrating success.
• Stakeholder Management and Communication — these components that underpin my approach. Communication is essentially is about a strategy that includes messages to be communicated, stakeholder groups to be communicated to, channels to communicate through and frequency of communications.
• Process Changes — involves creating a process hierarchy, mapping the “As Is” and “To Be” and from these identifying where the major impacts will be and the associated stakeholder groups that will be affected. It is helpful for end-users to get involved in the design stage of the new processes so that they can provide their input and will be able to be involved and learn at the outset.
• Organisational Change — a natural bi-product of the process changes which will need to be carefully managed and input from your key stakeholder groups is essential in the design of job roles & responsibilities and new organisation structures. This is the one aspect that people are most interested in as it involves “their jobs” so cannot be underestimated.
• Business Readiness and Adoption — this component is about designing and implementing a business readiness/adoption measurement mechanism to determine how those impacted by the change will have made all the preparations necessary to accept the deliverables of a project and begin operating with them
• Training & Education — related to training key stakeholder groups on the new processes in relation to their new roles & responsibilities the end result of which will be that the business will be have had the necessary training on each relevant module and will be ready to adopt the changes.
• Benefits Management — every project should have a business case and this component is about extracting the key elements from it and implementing mechanisms to track the benefits detailed in that business case. This needs to be owned by the business.
• Continuous Improvement — the last but equally important component and one that is often overlooked by organisations which is about improving your processes as people get use the new application/system and will find easier and better ways of doing their work. Creating continuous improvement teams out of your original key stakeholder groups is the best way to progress this.

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