ComputerWorld: How to Make Your ERP Roll-out Succeed

If you have been around ERP implementations for a while, you can be forgiven a sense of deja vu as you read this ComputerWeekly article, which says that training and change management “can be the difference between success and failure.”  Poor change management has been recognized as a leading element in project failure for at least a decade now, ever since the high-profile teething pains experienced by SAP and other vendors in the 1990s.  Many articles were written about the challenges faced by Hershey, Whirlpool, and other companies that struggled with their new systems because of primarily organizational challenges, and both ERP vendors and their implementation partners responded by improving their ability to prepare people for the changes a new system introduces. 

The real news then, isn’t that good change management is a critical part of making your multi-million dollar ERP investment.  It’s that ten years later, it remains such an impediment to ERP success:

Financial executives surveyed by Gartner rated 5% of ERP projects as complete failures and said a third of ERP projects were not a success. Only 23% of companies reported highly successful ERP projects.

Change-related causes continue to dominate the reasons these projects fail.  Unfortunately, change management is a little like dieting.  It’s a lot easier to say you’re going to do it right than it is to pull it off. 

The main focus of the article is about Xerox, and the changes they have made to how they implement systems to ensure an effective transition occurs.  There are several good tips sprinkled through the piece, so if you are going into an implementation, you should read it.  The key insight though, is how Xerox has restructured project management within their implementation teams.  Here’s the basic problem they faced:

In the past, Xerox has squeezed training budgets and timelines in favour of system development and design. This is because unlike the technical aspects of system roll-outs, the benefits of training are difficult to quantify, says Farrow. "Training always got the short end of the stick and we had to fight to get it on the critical path of the project."

This is not uncommon, in my experience.  I believe another reason this happens is that ERP projects are led by business and technical leaders with deep expertise, who are in a position to understanding new systems and processes in a way that the general user population is not.  From that vantage point, it can be easy to underestimate the amount of time and support the user community will need to learn the system, and how important it is that they get it. 

Here is how Xerox chose to deal with the problem:

Both the technical and business efficiency aspects of software roll-outs were previously handled by a single Xerox project manager. But the focus was always on the technical side. "This changed in 2007 when the responsibility for these two aspects of change management were split, enabling training to be pushed up the agenda," says Farrow.

Once Xerox confirmed training as a key part of the SAP roll-out, invested resources in training, and agreed a partnership with a third party training firm, Assima, project managers were not able to push back, she says.

It’s a smart approach, one I would love to see more widely adopted.  It gives leadership better visibility into the true costs of the implementation, it ensures that both the technical and the people aspects of the project both receive the full attention of a dedicated project manager, and it prevents the usual challenges in design and development from undermining the overall success of the project.  It’s probably a good idea to have your consulting partners reflect a similar split within their own team as well, to keep them aligned with your internal strategy.  If a single company is partnering with you on both the technical and change management streams, ensure that a separate PM and partner or principal, with a separate budget, are responsible for people activities. 

Despite its sophistication and complexity, an ERP is just a tool.  It is the ability of your people to use that tool to do their jobs better that will determine what return you see from your investment.

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One Response to ComputerWorld: How to Make Your ERP Roll-out Succeed

  1. Luc Galoppin says:

    Hi David,
    Your article is indeed an eye opener to the project manager who is single-focussed on the technical side of a roll-out. However, once those consulting partners get the budgets assigned to get the training job done, another bottleneck may come to the surface: the flattening of your change management approach.
    An example: last year the plant manager of a big plant came to see me. The fact that the return for the people on the SAP training sessions was disappointingly low caused some frustration.
    What happened here? The organization thought that sending people to the SAP training was enough in order for them to be prepared for the day-to-day work with SAP. Together with that plant manager I discovered that people remember maximum 10% of what was taught in the training sessions.
    In my opinion that’s normal because 90% of the things you need to know in order to perform your work cannot be taught in the classroom; you learn it when you need to solve a problem, when you receive the right communication and whenever you are obliged to take some actions in practice. Training managers need to be aware of that. 90% of what is needed for my job is situated in the field, so as a training manager I need to be in the field.
    Out of that frustration I have created a big wall poster. On this poster I point out the difference between Training (restricted to the classroom) and Learning (anything that is needed to prepare a user) by looking at the question: “Where is the knowledge users need when they start using SAP from scratch?”
    If you and your readers like it, they are welcome to print it big and make sure you hang it where your SAP program manager sees it. This insight influences his/her planning and budgeting!
    Here is the link: http://www.reply-mc.com/wp-content/SAPknowledgeasaniceberg.pdf
    Best regards,
    Luc Galoppin – Co-author of the SAP PRESS book ‘Managing Organizational Change During SAP Implementations’

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