Tuesday, February 28, 2012

Why does SAP so many successful ERP Implementations?

Changing People’s habits in Supply Chain

Any SAP implementation brings change to organizations and more importantly to the people who work in these organizations. While SAP projects represent a positive change, the perceptions of the people affected can be quite different (See image 1). Thus, a SAP implementation requires active management of the change process throughout the project and beyond to ensure that the new solution is fully accepted and adopted by the people using it.

Image 1: The process of change and adjustment.

For enabling and supporting Organization Change, the first step is to align the structure of the organization.

What are some strategies to manage the Change?

Role of Top Management
  • Top Management actively supporting the initiative
  • Top Management provides the right people to do the right job
  • Clear Company Policy
  • Communicate the needs of the organization
  • Success of the implementation to be assigned as a Key Performance Indicators of the staff
  • HR must support with employee development master plan and career path for employees
  • Good budget support

Role of Project Team
  • Effective communication with employees
  • Project team provides continuous feedback to top management on the status, progress and areas of concern of the implementation
  • Effective training on role and skill
  • Providing detailed manuals to staff
  • Conducting reviews post the implementation
  • Involvement of employees in the change process

Once these roles are clear and implemented, Change Management efforts should be align to all phases of the ERP project:

Image 2: SAP Change Management Approach.

The SAP Change Management Approach is based on 6 SAP Change Management success factors.

1. Creating a common orientation
Employees usually have different information about the project and have different interests and goals. Increasing their information and alignment to the objectives of the change facilitate common orientation. This phase is best addressed by an effective communication strategy.

2. Creating conviction
People believe in a system that they create and design therefore involving people in the design of the process facilitates their belief in the new process design.

3. Ensuring ability
Change works best if it is drive internally.  To ensure lasting change it is important to ensure ability for the users in terms of understanding the new processes and the revised roles and having the skills to run the new transactions proficiently. The Change Impact Analysis helps ensure that this is achieved.

4. Ensuring uniform perception
Efficiency of the change process is driven by uniform perception of goals and objectives of the project. The integration workshops helps in creating the alignment to the common benefit and the effort needed to drive the benefit that is expected.
Business benefit workshops help the business owners focus on the business results that they are seeking to achieve and the SAP tools they can leverage to achieve them.

5. Making results felt
One of the biggest individual apprehensions is the fear of failure. This leads them to reject new solutions/ processes offered. Therefore it is necessary that employees should be able visualize and feel the results as soon as possible. As a part of the Change Strategy the quick wins are identified and study missions to these internal site will need to be organized.

6. Ensuring lastingness of change
Change processes are only successful in the long term when the organizational situation also changes and the new way of thinking and acting are positively reinforced. Creating permanent structures and the right reward mechanisms will help ensure the lastingness of the Change.
The Post-Go live issue resolution ensures that we factor in issues not envisaged during the implementation and undertake the root cause analysis.

Change is the only constant in business environments. However, uncontrolled changes and insufficient change management processes will increase the probability of project failure. A formal and structured change management process is necessary to ensure effects of any changed requirements are properly analyzed, prioritized, and balanced according to the project's budget, schedule, and scope.

IT projects almost never fail because of technical causes. A lot of large and complex projects fail because of people and process risks. As we discussed in class, a big mistake that companies make is to assume that changing the software is easier than changing people’s habits. For these reasons, enterprises are increasingly recognizing that good Governance is a requirement for ensuring the alignment of major program initiatives with business strategy and direction. Effective Governance is the foundation of project success.

Managing Organizational Change During SAP® Implementations, Luc Galoppin, Galileo Press

1 comment:

  1. Very Informative Post...
    All the points are very informative and easy to undersatnd.
    ERP helps to increase your production levels and to control your costs more efficiently,while improving the quality of several areas simultaneously & you will be able to control the whole enterprise more efficiently.
    Thanks for sharing Implementation of erp in an organization...


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