Management Change in Organisation

1. Management Change in Organisation

2. Areas of ERP Problems • The findings from a study of 164 users from 62 Fortune – 500 companies using ERP systems revealed that the following are crucial areas of ERP problems: • 62% involve people issues • 16% involve business problem issues • 12% involve IT issues

3. People factor • A new ERP systems incorporates changes to technology, processes and people. • Of these, the factor that have great variability is people. • The new system may require that people learn new skills, work in different functions, or face

4. People factor • For example, a typist who did simple data entry work before ERP will face a whole new world after ERP. • The contents of his/her computer screen, now holding customer data relevant to many departments, can impact numerous issues companywide (such as customer credit rating, payment history, shipping arrangement, etc.)

5. People factor • The worker now will become a business person. • Human are fickle creatures, they do not like to change and, when forced to adopt new behaviours, they can become quite unpredictable.

6. The Purpose of Change Management • Employee may be reluctant to the new system. • Change management program focuses on ensuring that employees are not becoming the hindrance in the operation of new ERP system. • Also remove any resistance to the new ERP system.

7. Change Management • So, companies put a high priority in changing the mindset of employees toward the new deployed ERP system. • This is an important issue to be addressed and worked out to ensure that the ERP implementation does not fail. • One of the major things that enforce attitude of people toward new ERP system is training.

8. Four Stages of Resistance • Changing the ways things are done or processes can be easily or hardly acceptable thing, unless the people were satisfied with the previous processes the new process will be welcome. • The resistance may come out in four stages. • Users may go into a state of denial when discovering that absolute changes in work practices will be required.

9. Four Stages of Resistance • The they will go from denial to anger after realising that they cannot return to the old system. • Then to bargaining stage for the hope of holding on some of the old practice while bringing new practice. • Despair is the final stage in which workers have no option except go on with the new system with new practices. • Employees buy-in depends on clear communication from the beginning, regarding the potential outcomes for each individual, each department, and a company as a whole.

10. Change Management…Training • Employees cannot be expected to give their best while fearing the unknown system. • Training will help overcome much of the fear, uncertainty and doubt (“FDU”) that accompany the change to the new system.

11. Change Management…Training • A pro-integration climate should be created, in which early adaptors and contributing users are rewarded for their participation. • All employees should be motivated to become more systems-aware, more data-aware. • User buy-in is main predictor of success for an ERP project.

12. Change Management…Training • Through training, the company can go far in managing user expectations and reducing the natural resistance. • A good change management program will promote user ownership, which is essential to the success of an ERP effort.