Sunday, July 4, 2010

Manage the Change or Change the Management during an ERP Software Selection – Introduction

This is the first of a series of four blog posts in which I intend to describe how change management can affect a company’s ERP software selection project.

Part 1 (Introduction): I will describe the challenges a company faces when managing the change caused by the replacement of its ERP system.
Part 2 (The Change): I will show the difference between general change in a company (e.g., management team, moving to new offices, etc.) and change during an ERP selection process.
Part 3 (The Management): I will describe the different methods and tools used to manage change during an ERP selection project.
Part 4 (Conclusion): I will provide a plan that companies can use when managing change during an ERP selection process.

Change Management Challenges that Companies Face during ERP Software Selection

Probably one of the most important challenges is internal communication. Even before starting the selection process, all parties involved should know what is going to happen and why the decision to buy or replace the current ERP software was made. The decision to replace the existing ERP solution should be discussed with the employees. Of course, in companies with hundreds of users, the chief information officer (CIO) or chief technical officer (CTO) will not speak to all of them; but there are other ways to find out what they think by using surveys, polls, etc.

After the decision to replace the system is made, the next challenge is to define a strategy that will make the selection and implementation process as painless as possible (i.e. a plan of action to accomplish a specific goal). It doesn’t have to be very detailed, but it should contain the risks faced during the implementation process and the ways to deal with them. No matter what vendors tell you, there is no project with zero risk.

Now that you have created a strategy, you will need to find people who can implement it. No matter the size of the project, you will need to create a team for the ERP selection project, made of people from different levels and different departments and led by a project manager whose main task is to supervise all actions related to the project. When building the team, try to select people who will be willing and available to work on the project (do not take very busy people or employees that are likely to leave the company).

No matter who makes the decision that leads to an ERP selection, or who manages the project, all the employees in the company will be affected. Therefore, everyone should be involved and allowed to contribute. In order for that to happen, transparency is extremely important because people cannot get involved if they don’t know what’s going on. All employees (from users to top managers) should know what’s going on and have the opportunity to give their feedback on the project.

Another important challenge is external communication with software vendors, consultants, or companies offering software selection services. If you’ve already addressed the challenges mentioned above, it will be much easier to work with vendors, consultants, or software selection companies.

Please remember that these challenges are related to change management for an ERP selection project. Ideally, these challenges should be addressed before you start the selection process, and not along the way.

In my next blog on change management, I will define change and describe what makes it such an important issue during an ERP selection process. In the meantime, please let me know what your thoughts are on change management and on this blog post.

Change happens all the time—but why are changes in our personal lives similar to those in our professional lives? There are some major events that oc

If you haven’t read the blog post ERP Vendors, Are You Green Enough? that I wrote a little over a year ago, I recommend you read it first. After you’ve checked it out, I assume you’ll understand that I used a flawed and extremely simplified approach to “confirm” my impression of the correlation between the size of enterprise resource planning (ERP) vendors and the greenness of their offerings (see below for further explanation). About a year later, I used the same method to go through the same seven ERP vendors I had looked into the last time, and this time my focus was the growth of the green counts. My “conclusion” is that, on average, these ERP vendors have become 71 percent “greener” over the time span of roughly one year. Let me show you some data:

fig-1.jpg

Figure 1. Green counts from Google Search, 2008 and 2009.

Figure 1 shows the growth in the numbers of search results that include “green” on those ERP vendors’ Web sites. Google was used as the search engine, as it was last year. The result shows that almost all the vendors have significantly increased their use of “green” on their Web sites.

After going through a few of the vendors’ sustainability-related activities in 2009, I’m convinced that the increase in“green” count does have some connection to the enhancements some vendors have made.

When I checked SAP’s press releases for 2009, I found a lot of announcements related to the company’s efforts in sustainability. Below are a few examples:

* SAP Unveils Online Marketplace for Sustainability Solutions from SAP and Partners (October 27, 2009)
* SAP, Microsoft, and Accenture to Co-develop New Carbon Disclosure Project (CDP) Carbon Benchmarking System (September 24, 2009)
* SAP to Acquire Carbon Management Solution Leader Clear Standards, Inc. (May 11, 2009)

In fact, SAP has a dedicated Sustainability Newsroom Web page to showcase both its capabilities in helping customers increase sustainability and its own sustainability achievements.

Let’s take another vendor—Oracle. Below are some press releases I found:

* Oracle Delivers New Governance Risk and Compliance Suite with Vital Policy Oversight and Control Execution Integration (December 7, 2009)
* Oracle and OMRON Join Forces to Deliver New Environmental Sustainability Solution (October 12, 2009)
* Oracle OpenWorld 2009 Green Program Promotes Awareness, Education, and Sustainability (September 30, 2009)

It seems that not only does “green” as a word appear more frequently on ERP vendors Web site, but also some vendors do add to their offerings to help customers become greener. However, as I explained in last year’s blog post, the flaw of the green count approach is obvious. The word “green” doesn’t always represent vendors’ abilities to support customers’ initiatives toward tackling environmental issues and improving sustainability. Thus, again, I have to warn you that the “green count” approach should not be used for any serious purpose.

Manage the Change or Change the Management during an ERP Software Selection: The Change

Change happens all the time—but why are changes in our personal lives similar to those in our professional lives? There are some major events that occur and change things forever. For an individual, such a change can be caused by marriage; for a company, by the selection of an ERP system. There is always a way out when relationships stop working (both between people and companies), but it can be painful—and stressful to go through.

Why are Changes in Our Personal Lives Similar to Those in Our Professional Lives?

Companies are made up of individuals who have similar behaviors—both at work and at home. Let’s take a look at the similarities between the two:
1. We usually have our initial meeting with our partner-to-be in a public place (restaurant, night club, concert, etc.). The same applies when meeting a software vendor (tradeshow, conference, expo, etc.). Either way, we try our best to make a good first impression.
2. On our first date, we’ll try hard to impress our partner-to-be, as the vendor will try to impress a potential customer during a product demo. In both cases, we tend to forget to mention our weaknesses—and put more emphasis on our strengths.
3. When we decide to take the big step, we need to really understand what the change (caused by both marriage and purchasing an ERP) entails. Most failures, in marriages and implementations, are caused by decisions that were not very well informed.
4. Finally, when things are not going very well with our partner or software vendor, we start looking elsewhere and (oftentimes) decide to change. This is perfectly normal; as long as we learn from our initial mistakes and try to do it right the second time.

You can take control of the change by following these simple steps:

1. Do not blindly following the others or let yourself be influenced: In both marriage and software selection, we sometimes tend to follow others because it seems like the right thing to do. You shouldn’t get married because all your friends are doing it and you shouldn’t look for or replace your current ERP system because everyone else in your industry is doing it.
2. Understand the disadvantages: It’s important to understand the disadvantages change will bring preferably before it happens. It is more important to understand the disadvantages of change, because it’s the weaknesses—not the strengths—that can make a relationship (personal or professional) fall apart, if not understood and dealt with accordingly.
3. Be reasonable and realistic: Do not expect a major change to happen and answer all your problems. A partner and a vendor can help you deal with problems and issues, but do not expect them to fight your wars or come up with miracle solutions to everything.
4. Do not try to hide the dirt under the carpet: Remember, there are always two parties involved in a major change such as software selection or marriage. Change can and will be less painful if the two communicate and share thoughts, feelings, etc. It can only be successful when everyone involved is aware of what’s happening and can contribute.