ERP implementation and organizational change management

Tom R. Reznicek, Nicole C. Sims, Neal Baumeyer

Implementing a new enterprise resource planning (ERP) system is a big undertaking.

The typical resource constraints of public sector organizations make the stakes particularly high for this industry. Public sector organizations need to be good stewards of each dollar received, and regulators, donors, and taxpayers require transparency.

The right ERP solution can transform public sector organizations, bringing greater efficiency through automation, reliable security, and huge data storage capacity. Yet, a failure to implement a new ERP system well is a considerable waste of employee time and public dollars, so identifying and mitigating risks is critical.

Incorporating organizational change management (OCM) strategies from the beginning can help maximize the benefits of an ERP implementation. Additionally, viewing an ERP implementation through an OCM lens can encourage user buy-in and build a strong foundation for success.

Get the most out of your specialized ERP solution for the public sector by working with Crowe.

The value of organizational change management

OCM strategies can help organizations navigate, accept, and adopt new technologies and new processes. Implementation of a new ERP system, such as Microsoft Dynamics 365™, can transform many dimensions of an enterprise – organization, processes, technology, and people.

Typically, the “people” dimension poses the largest challenge to successful ERP implementations. That’s why building buy-in among users and other stakeholders as soon as possible, as well as throughout the entire implementation process, is critical. Following are four OCM strategies to help increase buy-in across the organization.

4 OCM strategies to help prepare for a successful ERP implementation

1. Understand the change – and the readiness for change

First, organizations need to determine the scope and significance of the changes to come.

To prepare well for a new ERP system implementation, it’s important to understand:

Who could be affected by the change, including internal and external stakeholders
Benefits the change might produce
Risks and challenges of not changing
What processes, roles, practices, policies, systems, and internal controls will be affected by the change
How the change aligns with the organization’s vision and business direction
Organizational culture and its readiness for change
The organization’s experience with similar or relatable change, methods, best practices, tools, or people
Lessons learned from prior failed or suboptimal initiatives
Any barriers to change

2. Recognize your stakeholders

Second, organizations should document stakeholder groups, their roles, and what is important to them.

Those leading the change must understand:

Stakeholder groups most affected by change
Stakeholder groups most critical to success
Stakeholders’ experiences with change
Who might be the best sponsors and champions of change
Who can keep stakeholders connected and enable them to share their voice via two-way communication channels

3. Determine effective communications and training platforms

Third, organizations need to recognize that a large part of OCM is consistent communication with stakeholder groups.

To communicate effectively, leadership must understand:

Best practices for communication and training
How to tailor communications and training to specific stakeholder groups
The importance of evolving communication plans as technology evolves

4. Engage stakeholders

Fourth, once an organization has completed the above three foundational activities, it’s time to engage stakeholders and initiate the communication of change.

Organizations can effectively engage stakeholders by:

Announcing a change is coming along with foundational information
Providing opportunities for stakeholders to give feedback and ask questions
Assessing stakeholders’ initial reactions to the communicated change
Communicating finer details with stakeholders
Training teams so that they are well-equipped to adapt to the change
Requesting feedback and input on the change throughout the entire implementation process

Don’t go through your ERP implementation alone

Understanding the technology is a key part of implementing a new ERP system, but understanding the people who will use the technology is even more important. However, many ERP providers are laser focused on the technology and disregard the crucial importance of OCM when implementing a new system.

Crowe public sector specialists can work with your organization to understand the people and the stakeholders affected by the implementation of a new ERP system. We can help you define effective communication strategies and training activities to assist your staff in understanding changes and help your workforce more effectively embrace new solutions.

Don’t go through your ERP implementation alone. We’re just a phone call or email away. Let’s discuss how our OCM framework can make your ERP implementation a success.

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