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| The Light Is Better Over Here! |
A decade ago I was a partner with Deloitte with major
responsibility in the region for ERP Change Management. When I left Deloitte I shifted my change
focus to areas such as: employee engagement, customer loyalty, and innovation.
Because of my Deloitte experience I was recently called in
to give my insights on an ERP implementation. The question was: “what risks are on the
horizon that we’re not prepared for?”
Wow, what a surprise!
Basically I found that nothing has changed in the world of
ERP Change Management. We’ve polished
the discussion but we haven’t advanced it.
Let me explain.
ERP Change Management is aimed at two functions:
Communications and Training. The
underlying assumptions are logical and rational: “all we need to do is inform
and prepare People for the new technology.”
This is exactly the way we saw the world 10 years ago.
The problem 10 years ago is that ERP implementations were
generally perceived to fail. The failure
rate was often touted to be around 70% based on metrics such as: ROI, timeline,
cost, and disruption to the business.
As I reviewed recent literature on ERP’s I found three
things:
- The failure rate is still perceived to be high
- The systems integrators claim the failure rate to be much lower
- “People” are still cited as the main reason for ERP implementation failure.
Ok, so other than the rationalization of failure
by systems integrators, nothing has changed in 10 years. What’s going on here?
Firstly, let’s be kind to systems integrators. In a sense they are right. You could argue that 100% of ERP
implementations are successful. Even when we accept the rule of 2X (ERP’s take twice as long and twice as much
budget as planned) - ultimately we’re talking about the technological merging
of software and business processes.
Ultimately there are sufficient time and resources allocated to “tic and tie” things together so that most software functions work well enough to
claim benefits for the business.
So even though technology and process improvement overspend
to gain limited business benefits, why is it that PEOPLE RESISTANCE takes the
rap? Why don’t those damn people just do
what needs to be done? Why doesn’t
Change Management do its job?
Well there are some answers to these questions. Basically I think that the systems
integrators need to see Change Management as an ally in implementation rather
than a convenient scapegoat. They need
to respect the dynamics of changing People in addition to the mechanics of informing them.
Systems integrators typically view Change Management as a
subordinate task rather than a value added activity. The typical implementation process puts the
systems integrator under constant resource pressure to overcome the limitations
of their software and ability of their consultants. Relief is always found in the same place: Change
Management – where resources are cut back and the work focuses on mechanical
issues to explain to People:
- the new business process, and
- how to do their job using the technology
I’m not downplaying the need for this work. I am saying that we’ve been looking under
this lamppost for years; yet ERP failures are still blamed on People. How long do we need to keep looking here while
expecting a different result? Isn’t it
time to look under a different lamppost?
I went back into the literature to see if others have had
new ideas over the past 10 years. The
answer is “kind of.” Three to five years
ago there was some incredibly insightful research done – generally in Canadian universities. For reasons I don't understand the research ended so we really haven’t benefited from the work. I like the research because it fits in with my
global experience in engaging employees in organizational transformation.
Basically this research tells us what we intuitively
understand:
ERP implementations dramatically alter “infopolitics” and “infoculture”
in the organization.
In other words, information (data) has political power and
cultural value. This
power and value has deep implications for People at work.
On the power side let’s be boldly clear: ERP’s are usually
implemented as a power grab by management.
The huge expenditures on ERP’s are justified because of the huge
benefits that will flow to the company by centralizing data. The power of information is drawn from the
catacombs of the organization into the hands of management.
The benefit to People in this grab for power is always
explained as “it’ll make your job easier” - easier yes; but not necessarily
more valuable to them. In fact "easier" is often
interpreted as “gone!”
For People the ERP represents a lose of control. Their As Is state changes in the To Be. It goes from 3R’s to CAT:
Rites, Rituals, Relations -> Consistency,
Accountability, Transparency
People use the power of information to built value into
their jobs. In the As Is state they use the dysfunction of data and information
as a cultural bargaining chip.
Information lets them be heroic and lean forward to serve their
customers. The chaos around unclean,
distributed data let’s People detach from the accountability sought by the business. ERP’s take the value of drudgery out of the As Is work
– they make work visible and efficient. That's why People say:
- the system doesn’t understand
- my clients aren’t being served
- the old world was better
- I thought management knew what it was doing – apparently not.
ERP Change Management won’t be successful until it addresses the power and value of information in the transition
from AS Is-to-To Be. How do we do this?
- Recognize the issue:
- Study it, document it, map it, communicate it
- Equip managers to handle the issue:
- Show them how to discuss the issue with their teams
- Replace the issue:
- Identify and implement higher order work with higher order value
Systems integrators tend to see People like they see
systems: logical, rational, literal, and sequential. Unfortunately the human condition has not
reached this level of perfection. Humans
are still driven by: emotions, impressions, beliefs, and desires.
Treating People like systems doesn’t make them act like
systems. People have an indomitable spirit
that makes them act like People. Until
Change Management treats employees like People their resistance will continue
to be cited as the #1 source of ERP implementation failure.
Will we move the ERP Change Management needle in the next
decade or just continue to look harder under the same lamppost?
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