Why is change management important to ERP implementation?
ERP provides huge advantages to businesses in terms of efficiency, production, and cost savings. On the other hand, ERP deployments are complicated, with many facing difficulties and even catastrophic failure. In ERP adoption, change management has been highlighted as a significant accomplishment component (Kuzic & Trieu, 2010). Management frequently encounters an unwelcome mentality from some employees when deploying an enterprise resource planning (ERP) system. They may fight the installation process. So, management must know how to work with this issue proactively rather than reactively (Aladwani, 2001). Change management is important for ERP implantation because it is responsible for the effective acceptance and utilization of change within the organization. Change management enables workers to comprehend, adapt to, and operate well throughout the change. Company transitions to ERP may be difficult and costly for both time and resources if appropriate organizational change management is not implemented. Change management, if not implemented properly, can also negatively impact staff enthusiasm and the growth of competence skills. In the end, a lack of competent change management might lead to the organization's collapse (Stobierski, 2020).
Why may individuals in an organization resist change? And strategies to overcome resistance.
In general, there are several reasons why individuals resist changes in their organization. Employees may lose status, job, salary, or comfort (Zbib, Ahmed, Sawaridass, & Ramayah, 2006). Moreover, when we go deep into the change resistance, Zbib, Ahmed, Sawaridass, and Ramayah gave us three important reasons why employees resist change
- The character of the change is not obvious to those who will be impacted by it.
- The change is subject to a broad range of interpretations. Those who like it see its importance and how it can make the job easier, and those who do not see it as a waste of time, effort, money, and ERP will be implemented to replace them.
- Employees who will be impacted have no say in the process of implementation (2006).
To overcome the resistance (Damawan & Azizah , 2020) offer the following strategies:
- Introduce the changes slowly.
- Make employees participate in the changing process.
- Show that change is made for you and to make the job easier.
- Educate the employees about the importance of this change.
- Develop a high level of trust and minimize miss understanding.
- Offer support to minimize fear and anxiety.
- Used the right person to be a change manager or change agent
An example of an ERP implementation in 4th Milling Company, why it was successful?
A successful implementation of ERP -SAP system- was in the company that I work in, the 4th Milling Company. It was successful because of the following:
- A change agent was hired to explain the importance of change and how it will make our job easy. However, the change agent did not sugarcoat everything. He explains that we are going to face many difficulties.
- The change was aligned with the mission, vision, and goal of our company
- Since the company will excessively customize the system based on our needs, a meeting with the change agent and SAP representative was conducted in each department to look at our needs and what we want to accomplish. We were involved in all the steps.
- Training classes are conducted on how to use the system and maximize its benefit.
- The communication was very high between us as the employee and the change agent, our company top management, and SAP representative.
- Modification of plan happen all the time, and as employees, we are being notified all the time.
Aladwani, A. M. (2001, 8 1). Change management strategies for successful ERP implementation. Business Process Management Journal, 7(3), 266-275. doi:doi.org/10.1108/14637150110392764
Damawan , A. H., & Azizah , S. (2020, 1). Resistance to Change: Causes and Strategies as an Organizational Challenge. Advances in Social Science, Education and Humanities Research, 395, 49-53. Retrieved 11 27, 2021, from https://www.researchgate.net/publication/339190336_Resistance_to_Change_Causes_and_Strategies_as_an_Organizational_Challenge
Kuzic, J., & Trieu, V.-H. (2010, 11). Change Management Strategies for the Successful Implementation of Enterprise Resource Planning Systems., (pp. 178-182). Retrieved 11 27, 2021, from https://www.researchgate.net/publication/224193922_Change_Management_Strategies_for_the_Successful_Implementation_of_Enterprise_Resource_Planning_Systems
Stobierski, T. (2020, 01 21). Organizational Change Management: What It Is and Why It’s Important. Retrieved 11 27, 2021, from online.hbs.edu: https://online.hbs.edu/blog/post/organizational-change-management
Zbib, I. J., Ahmed, Z., Sawaridass, A., & Ramayah, T. (2006, 1). Resistance to change and ERP implementation success: The moderating role of change management initiatives. Asian Academy of Management Journal , 11(2), 1-17. Retrieved 11 27, 2021, from https://www.researchgate.net/publication/43655794_Resistance_to_change_and_ERP_implementation_success_The_moderating_role_of_change_management_initiatives