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Surviving ERP. How to Manage the Organizational Change Herman A. Zwirn CIRM LaMarsh & Associates, Inc. K. Judge. participants will. Learn a working model of Change Management Determine how to use Change Management strategies and tactics in your ERP implementation. Mythology and Fact.
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Surviving ERP How to Manage the Organizational Change Herman A. Zwirn CIRM LaMarsh & Associates, Inc. K. Judge
participants will ... • Learn a working model of Change Management • Determine how to use Change Management strategies and tactics in your ERP implementation
Mythology and Fact The Nature of Change
Organizational change: and the beat goes on... "We trained hard-but it seemed that every time we were beginning to form into teams, we would be reorganized. I was to learn later in life that we tend to meet any new situation by reorganizing; and what a wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency and demoralization." PETRONIOUS (1st Century Roman and advisor to Nero)
Some myths orWhy we don’t need change management • People will always adapt to change. • Change happens, you don’t have to manage it. • That’s what we pay our managers to do. • The project will get done with or without change management. • If you change the process, everything will change. • ERP makes change happen.
FAILURE Failure is Possible No Plan for Implementation Fuzzy Definition of Desired State Failure to Integrate all Changes
Critical Success Factors • User Involvement • Executive Management Support • Clear Statement of Requirements • Proper Planning • Realistic Expectations • Smaller Project Milestones • Competent Staff • Ownership • Clear Vision and Objectives • Hard Working Focused Staff
Change is about... • Organizations • Individuals • Results
Change is about... • Structure • Process • Culture • People
K. Judge Stages of Change Current State Delta State Desired State WHY? HOW? WHAT?
Company’s Desired State Department’s Desired State Target’s Desired State Layers of Desired State
Structure Process Culture People Desired State
Dip in the Delta Productivity K. Judge
Dip in the Delta Productivity K. Judge
Why? • “There are many ways to achieve it, but managing change is no longer a competitive discriminator – it is just part of the ante to get into the game. Competitive advantage goes to the company that can manage change and embrace innovation, proactively, while minimizing perturbation of existing operations.” Based on Next Generation Manufacturing Project, The Agility Forum
The Methodology of Change
What is it? • Change management is the methodology that integrates change and the ability of the organization and people to adopt it. • It is an organized, systematic application of the knowledge, tools and resources of change that provides organizations with a key process to achieve their business strategy. • It is a real tool to mitigate the risk and increase both the ownership and sustainability of change.
What you need • A consistent and scalable model of change that matches the change process • A disciplined methodology to implement the model that can be integrated into the way work is done • A learning system that embeds a change capability into the workforce
External Change Drivers Internal Change Drivers Identify the Change Current Desired Delta Prepare to Change Sponsor Change Agent Target Culture History Resistance Plan the Change Communication Learning Reward Implement the Change Sustain the Change Managed Change™ Model
How? Methodology
Process Structure People Culture Company • Apply a change model to the ERP implementation • Introduce a change methodology • Use the change methodology as a part of all aspects and levels of the ERP implementation • Link ERP to business strategy • Support an ERP Process Change Center of Excellence • Define internal connections to build sponsorship cascade • Define executive sponsor roles • Build organizational change learning capability • Process Orientation • Create sponsor level Learning • Integrated Enterprise Thinking • Seeks change • Focused, disciplined and patient
Departmental Process Structure • Apply a scalable change model • Apply a change methodology to implement the model • Embed the change methodology into other ERP methodologies • Build Departmental Sponsor Cascade • Define ERP roles and responsibilities • Create key role charters • Define ERP performance measures People Culture • Develop knowledge of ERP and organizational change • Know enterprise role of the department • Develop change agent skills • Develop ability to use the change methodology • Changeresilient • Knowledge based • Value driven • Cross-functional Partners • Process-driven • Customer focused
Individual Structure Process • Design jobs to include change management • Build in ERP role and measures • Build change agent measures into performance evaluation • Design work flow and methodologies to include change management tasks. • Change management is a work habit People Culture • Provide general change process knowledge • Process thinking capability • Apply change agent skills • Develop target skills • Create tolerance for change • Knowledge driven • Value centered • People centered • Customer centered
ERP Managed Change™Integration Assess • Turnover • Responsibility • Identify • Next Steps: Knowledge • Transfer Data Gathering and Analysis Identify Risk/ Identify issues / response Establish Sponsorship Build Team strength Design and Finalize Communications Learning (Training) And Rewards • Launch and Execute • System Events: • Communication • Learning • Rewards • Event designs Build Project Infrastructure Define goals and Set expectations Results Go Live Governance & Identify the Change Prepare to Change Plan the Change Implement the Change Sustain the Change Post-Audit Develop Deploy Plan Change Communications Specific communications, learning and rewards events Executive Kick-off Business Assessment Analysis OwnIt Implement System/ Processes / Policies Configuration
Elements of successful change • Commit to making change management a key competency and part of the ERP strategy. • Explain why the Current State is no longer viable. • Clearly define the Desired State that will result from the ERP implementation. • Build a systematic change-management methodology to implement your change during the ERP Delta State. • Integrate that methodology into the heart of the ERP project and the organization.
Discipline • The ERP Desired State as requires the continuous, conscious process of applying a systematic change methodology to implement ERP and build a sustainable future that is owned by the greatest majority of people in the enterprise.
Ownership/Innovative Application Inter-personal and collaborative behaviors 20% Enterprise understanding Information and business systems capabilities 20% Technical / task based skills Information System Process automation 60% Process technology BENEFIT RELATIONSHIPS Why is this Important?
It makes a difference • It impacts 90% of project critical success factors • It impacts 100% of the factors reported to cause projects to fail or be cancelled • Benefits are obtained earlier • Failure risks are reduced
MC MC MC MC MC MC MC MC MC Critical Success Factors • User Involvement • Executive Management Support • Clear Statement of Requirements • Proper Planning • Realistic Expectations • Smaller Project Milestones • Competent Staff • Ownership • Clear Vision and Objectives • Hard Working Focused Staff
Your Turn • Questions • Comments • Concerns • Ideas Herman A. Zwirn CIRM hzwirn@lamarsh.com www.lamarsh.com