Management Change in IT Organisation

Report
Management Change
in Organisation
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
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
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.)
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.
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.
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.
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.
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.
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.
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 dataaware.
User buy-in is main predictor of success for
an ERP project.

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.

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