Surviving
ERP
How to Manage the
Organizational Change
Herman A. Zwirn CIRM
LaMarsh & Associates, Inc.
© 2002 LaMarsh & Associates, Inc.
participants will ...
• Learn a working model of Change Management
• Determine how to use Change Management
strategies and tactics in your ERP
implementation
APICS Chicago Chapter 14
© 2002 LaMarsh & Associates, Inc.
05/21/02
2
The Nature
of Change
Mythology
and Fact
© 2002 LaMarsh & Associates, Inc.
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)
APICS Chicago Chapter 14
© 2002 LaMarsh & Associates, Inc.
05/21/02
4
Some myths or
Why 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.
APICS Chicago Chapter 14
© 2002 LaMarsh & Associates, Inc.
05/21/02
5
Failure is Possible
No Plan for
Implementation
Fuzzy
Definition
of Desired
State
FAILURE
Failure to
Integrate
all Changes
APICS Chicago Chapter 14
© 2002 LaMarsh & Associates, Inc.
05/21/02
6
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
APICS Chicago Chapter 14
© 2002 LaMarsh & Associates, Inc.
05/21/02
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Change is
about...
• Organizations
• Individuals
• Results
APICS Chicago Chapter 14
© 2002 LaMarsh & Associates, Inc.
05/21/02
8
Change is
about...
• Structure
• Process
• Culture
• People
APICS Chicago Chapter 14
© 2002 LaMarsh & Associates, Inc.
05/21/02
9
Stages of Change
K. Judge
Current State
Delta State
Desired State
WHY?
HOW?
WHAT?
APICS Chicago Chapter 14
© 2002 LaMarsh & Associates, Inc.
05/21/02
10
Layers of Desired State
Company’s Desired State
Department’s Desired State
Target’s Desired State
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05/21/02
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Desired State
Structure
Culture
Process
People
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© 2002 LaMarsh & Associates, Inc.
05/21/02
12
Dip in the Delta
Productivity
K. Judge
APICS Chicago Chapter 14
© 2002 LaMarsh & Associates, Inc.
05/21/02
13
Dip in the Delta
Productivity
K. Judge
APICS Chicago Chapter 14
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05/21/02
14
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
APICS Chicago Chapter 14
© 2002 LaMarsh & Associates, Inc.
05/21/02
15
The
Methodology
of
Change
© 2002 LaMarsh & Associates, Inc.
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.
APICS Chicago Chapter 14
© 2002 LaMarsh & Associates, Inc.
05/21/02
17
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
APICS Chicago Chapter 14
© 2002 LaMarsh & Associates, Inc.
05/21/02
18
Managed Change™ Model
External
Change
Drivers
Identify the Change
Current
Desired
Delta
Internal
Change
Drivers
Prepare to Change
Sponsor
Change
Agent
Target
Culture
History
Resistance
Plan the Change
Communication
Learning
Reward
Implement the Change
Sustain the Change
APICS Chicago Chapter 14
© 2002 LaMarsh & Associates, Inc.
05/21/02
19
How?
Methodology
Project
Step One
Steps Governance Identify
the Change
Deliverables
Step Two
Step Three
Step Four
Step Five
Prepare the Change
Plan the Change
Implement the Change
Monitor the Change
Statement of Work
Current State
Key Role Maps
Communication Team
Communication Events
Feedback Reports
Team Infrastructure
Desired State
Culture Analysis
Communication Plan
Learning Events
Deliverable Library
Change Headquarters
Fishbone Analysis
History Assessment
Learning Team
Reward Events
Dip in the Delta
Resistance Assessment
Learning Plan
Reward Team
Reward Plan
Ownership Development Plan
APICS Chicago Chapter 14
© 2002 LaMarsh & Associates, Inc.
05/21/02
20
Company
Process
Structure
•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
People
Culture
•Build organizational
change learning capability
•Process Orientation
•Create sponsor level
Learning
•Integrated Enterprise Thinking
•Seeks change
•Focused, disciplined and patient
APICS Chicago Chapter 14
© 2002 LaMarsh & Associates, Inc.
05/21/02
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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
•Change resilient
•Knowledge based
•Value driven
•Cross-functional Partners
•Process-driven
•Customer focused
APICS Chicago Chapter 14
© 2002 LaMarsh & Associates, Inc.
05/21/02
22
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
APICS Chicago Chapter 14
© 2002 LaMarsh & Associates, Inc.
05/21/02
23
ERP Managed Change™Integration
Governance
&
Identify
the
Change
Prepare
to
Change
Plan
Build Project
Infrastructure
Define goals and
Set expectations
Assess
Data Gathering and Analysis
Identify Risk/
Identify issues / response
Establish Sponsorship
Build Team strength
Change Communications
Executive
Kick-off
Business Assessment
Analysis
Plan
the
Change
Implement
the
Change
Develop
Design and
Finalize
Communications
Learning (Training)
And
Rewards
Sustain
the
Change
Post-Audit
Deploy
Turnover
Responsibility
Launch and Execute
System Events:
• Communication
• Learning
• Rewards
Event designs
Identify
Next Steps:
Knowledge
Transfer
Specific communications, learning and rewards events
Configuration
Implement System/
Processes / Policies
Own It
Go Live
APICS Chicago Chapter 14
© 2002 LaMarsh & Associates, Inc.
05/21/02
24
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.
APICS Chicago Chapter 14
© 2002 LaMarsh & Associates, Inc.
05/21/02
25
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.
APICS Chicago Chapter 14
© 2002 LaMarsh & Associates, Inc.
05/21/02
26
Why is this Important?
Ownership/Innovative Application
Inter-personal and collaborative behaviors
20%
Enterprise understanding
Information and business systems capabilities
Technical / task based skills
20%
Information System
Process automation
60%
Process technology
BENEFIT RELATIONSHIPS
APICS Chicago Chapter 14
© 2002 LaMarsh & Associates, Inc.
05/21/02
27
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
APICS Chicago Chapter 14
© 2002 LaMarsh & Associates, Inc.
05/21/02
28
Critical Success Factors
•
•
•
•
•
•
•
•
•
•
User Involvement MC
Executive Management Support MC
Clear Statement of Requirements MC
Proper Planning MC
Realistic Expectations MC
Smaller Project Milestones
Competent Staff MC
Ownership MC
Clear Vision and Objectives MC
Hard Working Focused Staff MC
APICS Chicago Chapter 14
© 2002 LaMarsh & Associates, Inc.
05/21/02
29
Your Turn
• Questions
• Comments
• Concerns
• Ideas
Herman A. Zwirn CIRM
hzwirn@lamarsh.com
www.lamarsh.com
APICS Chicago Chapter 14
© 2002 LaMarsh & Associates, Inc.
05/21/02
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