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Overcome Resistance to ERP Systems Changes With ADKAR

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6 Reasons Why Change Management Fails and How To Avoid Them

It’s commonly said that 70% of change initiatives fail, and there are many reasons why. Change is inevitable for most organizations, but an effective change management strategy and plan helps you to prepare leaders and employees for success. We have identified six common pitfalls when trying to implement change. Keep reading to learn how to avoid or overcome them, and implement change successfully. What Is Change Management and Why Is It Important? Change management is an enabling framework that guides the people side of change and supports people through the process. As business objectives evolve and grow with changing trends, so will strategic goals. Effective change management facilitates this growth and prepares your business to embrace the new strategy. We know from Prosci research that for change to be successful, employees and leaders must adequately prepare for successful implementation. 6 Reasons Why Change Management Fails There are many protocols to follow for effective change management within an organization. Here's what to avoid—and why—and solutions you should attempt instead. 1. Communication flaws Prosci research shows ineffective communication between leaders and employees can cause obstacles during change initiatives. Without clear and consistent communication, there’s a lack of shared vision, which means individuals will struggle to align their work with the new change. For example, an IT distribution company wanted to reduce manual data entry by introducing robotic automation. But their unclear communication sparked dissatisfaction among their employees, who took it to mean that “robots were taking their jobs.” The company planned to reduce employee workload and not replace individual employees, especially as the new change hinged on the employees being on board. Solution Effective change management communication goes beyond simply telling employees that change is coming. It's about being transparent about why it's happening, what it means for them, how it will impact their position, and more. Our Change Management Certification Program gives you the research-based skills to communicate effectively during change and achieve a successful implementation. 2. Resistance to change Resistance is a normal reaction to change, but when it’s not managed effectively, it can lead to the failure of change initiatives. Resistance typically happens when there’s a lack of understanding around the change, comfort with the current state, or fear of the unknown. When transformation efforts happen, it’s essential to explain the business reasons behind the change and its employee benefits. Resistance can hinder successful change management because it takes much longer to implement initiatives, and the effects often ripple throughout an organization. Solution One way you can overcome resistance is by listening to the biggest dissenters. You might be tempted to avoid these voices, hoping they’ll hop on board as time passes, but listening to them, giving them space to be heard, and providing them with relevant information can help overcome resistance. The Prosci ADKAR® Model for individual change begins with Awareness and Desire. That's because individuals must first be aware of the change and then feel there’s something in it for them to participate in the change. You can build Awareness and Desire by sharing data and case studies of successful change initiatives to combat resistant behaviors. When employees can practically understand how and why there’s change, and its impacts on them, they’re more likely to support it and participate in it. 3. Lack of reinforcement Reinforcement mechanisms are essential to sustain change because employees can revert to old behaviors. Without reinforcement, change initiatives may fail to become part of the organizational culture, making them much more challenging to implement. Reinforcement provides clarity to employees by reminding them of the goals and objectives of the change initiative. A one-off communication introducing the change won’t bring the entire organization on board. Instead, consistent reinforcement can iron out any kinks, answer questions, and align the organization with the change initiative. Solution Reinforcement is the last stage of the Prosci ADKAR Model, which provides you with guidance on how to sustain a change once implemented. Managers can reinforce change by offering feedback to employees about how well they’ve adapted to the transformation process and sharing ways to improve as needed. Rewards and recognition reinforce new behaviors aligned with the change. You can also reinforce change initiatives by measuring performance and implementing accountability mechanisms. It’s important not to waste the time and resources that go into implementing a change by failing to reinforce it. 4. Inadequate sponsorship Sponsors are directly accountable to organizational executives, provide support and resources, and set the tone for the change. Sponsors understand the organization’s cultural values and ensure the change management process aligns. However, sponsorship can lead to failures in change management when sponsors lack time and resources or underestimate the importance of the people side of change. Sponsorship has been the top contributor to successful change in every Prosci benchmarking study since 1998, but it has also been one of the biggest obstacles to success. An effective sponsor needs to understand their role in the change process, the resources needed, and the change initiative's purpose. Solution The Prosci ABCs of sponsorship come from over two decades of Best Practices in Change Management research: A (Active and visible participation throughout the project) – A sponsor's continued presence creates and sustains change momentum. B (Build a coalition of sponsorship) – The primary sponsor should include key stakeholders and senior executives to advocate for change and ensure it spreads across all parts of the business. C (Communicate support and promote the change to impacted groups) – Communicating the right information at the right times during change is key, and sponsors should be proactive. Use the Prosci sponsorship checklist to ensure your sponsors are well-equipped. 5. Lack of alignment According to research, 74% of leaders say they have involved employees in change initiatives, yet only 42% of employees report feeling included. A lack of alignment around goals and objectives makes it much harder for employees to adopt the change. Project teams, leadership and management must be aligned with daily work activities and objectives during the change process. A lack of alignment can lead to a lack of trust, which trickles down to how employees view leadership, and affects motivation and morale. Solution The Prosci 3-Phase Process is a structured and adaptable approach to helping people adopt changes at scale. Phase 1 – Prepare Approach, involves knowing the end goal, acknowledging who has to do their jobs differently, and what action is required to succeed. Understanding this from the outset keeps everyone involved aligned and provides a space to clarify any uncertainty. Phase 2 – Manage Change, is the longest phase and focuses on preparing and equipping people through the change process. The first two phases ensure alignment occurs between leadership, management and project teams. Phase 3 – Sustain Outcomes looks at what's needed to achieve results for the long term and who will take over responsibility for outcomes after the project or initiative is done. 6. Culture clash A company’s culture is key to how well it can manage change. In fact, 59% of participants in Prosci Best Practices in Change Management research said that organizational culture awareness is very important. A history of struggling to adapt to change, internal politics, and existing silos can contribute to a culture that’s resistant to change. Addressing these aspects of an organization’s culture is essential to increase the chance of success of change initiatives. Other research reveals that 80% of employees experience cultural tensions or competing priorities, and many are at risk of doing the wrong tasks because the change process doesn’t align with their day-to-day activities. This misalignment between change initiatives and workplace culture leads to confusion and decreased productivity if employees aren’t working on the right tasks to implement the change successfully. Importance of Organizational Culture Awareness Solution The first step of the Prosci ADKAR Model, Awareness of the need for change. This awareness drives a clearer understanding of the change initiative so employees can align themselves with the change. It can overcome some of the challenges of a previously resistant company culture. The more employees understand about why a change needs to happen, the less they will exhibit resistance behaviors. This will improve your organization's chances of success with the transformation. Why Change Management Fails and How To Overcome It Change management failures happen—but we know that a big reason is that businesses focus too much on the technical aspect of the change instead of the people who will adopt and use it. We developed the Prosci Methodology for change management to address both the technical and people sides effectively, and help businesses and organizations grow stronger in the process.

What CFOs Need to Know Before Selecting ERP Systems

In the rush of decision-making and daily operations, it can be easy to focus solely on the technical aspects of implementing an Enterprise Resource Planning (ERP) system. Although it is a strategic priority for many CFOs, implementing a cloud-based ERP system requires far more consideration than installing the system. To get the full value from your investment, it pays to start with the end users. ERP Change Management Our research at Prosci shows that the success of technology projects, including ERP software implementations, is equally dependent on the people navigating, adopting and using the technology. Selecting the right platform is, of course, an essential step. But before you jump into analyzing business requirements, leadership support, user support, functional requirements, and other typical considerations when selecting an ERP tool, it’s critical to consider organizational change management—the people side of the change. 1. Ensure alignment around reasons for the ERP system change As a CFO, the best first step you can take in the process is to ask questions about business objectives. What are the business reasons for implementing the change? Why are you looking at an ERP system in the first place? What do you want to accomplish for your organization? Are you trying to increase efficiency, provide greater visibility, and uncover analytics to make better business decisions? Are you trying to refine processes? You need to understand precisely what value you want the system to bring to the organization, and to hold the project team accountable to reaching those objectives. Now, calculate the people-side contribution to ROI. What percentage of the ERP project’s ROI depends on people adopting and using the new tool? It is 70% 80%? More? This calculation is often overlooked but it ties directly to your business objectives. To realize the ERP system’s full ROI, people must adopt and use the tool in their daily work. This is the people-dependent portion of ROI, the portion of ROI that organizational change management helps you to protect. Once the leadership team understands the reasons for the ERP system implementation, make sure those reasons are well understood and agreed upon by everyone involved. This alignment is crucial if you’re all going to sing the same tune. Who should be part of this conversation? Key players such as human resources business partners (HRBP), project management, senior leaders, finance, Lean Six Sigma or process team, strategy team or the transformation office, and change management partners should be at the table. You may also need to consider stakeholders outside the organization like credit card vendors who will need to do something a different way. Customers also need attention because their invoices may now be different, or they may have a new way to access their account and pay their bill. And all of this should happen before selecting an ERP tool or implementation partner. 2. Understand total costs of an ERP system change As a CFO, your budget must consider not just the cost of the software, but also the cost of bringing that software into your organization and what it takes to get your organization ready to adopt and use it. Total upfront costs should include: Defining and documenting processes Has your organization clearly defined the current state of your processes? Many organizations have not. You need to invest time up front documenting the processes to show how the organization and people will need to change the way they work when you bring in the new ERP technology. And don’t forget the documentation work. Processes exist only in someone’s head until they describe and document them. Prioritizing project time from employees and internal resources An ERP system is a significant investment that must provide value back to the organization, but we often see people having to do their full-time jobs while supporting the ERP system implementation. To ensure the expected outcome and benefits, the project must be prioritized, and people need time away from their current job to work on it. Engaging with, preparing and equipping people for the change Invest in the right change management resources to help your organization move from the current state to the desired future state. Our experience shows that rework and higher costs result when clients bring in change management after the organization has already chosen an implementation partner that is not equipped to manage the people side of change effectively. States of Change Failing to equip people for the change creates a bumpy transition and a "Swiss cheese" future state. 3. Integrate processes and people For any significant initiative to succeed, we need people to work together, avoiding the creation of silos and rework that diminishes the ROI, expands scope, and extends project timelines. It's not sufficient for a project manager to integrate communications and training with separate workstreams. For the change to be effective, all aspects of the people side of change need to be integrated with the entire strategy and project plan from the very beginning to achieve success. Unified Value Proposition Integration creates a unified value proposition to deliver successful change. 4. Uncover impacts from an ERP system change Understanding the impact of change on people and addressing it early leads to trust in the organization and engagement in the change, especially if your organization has experienced failures in the past. The impacts of an ERP system implementation will be felt across the organization in many areas, from systems and processes to mindsets and beliefs. 10 Aspects of Change Impact And resistance to change will occur because it’s how people naturally respond to change. Many will exhibit some form of resistance behaviors, and those who struggle most will need help to overcome their barriers. Identifying and understanding impacts helps you prepare people for the change, mitigate and resolve resistance, and ensure readiness when the system reaches go-live. Many organizations underestimate the mindset shift that is required in moving to an ERP system. We commonly see employees struggle in moving to a self-service model, especially when they are accustomed to receiving their key information and reports from others. The Critical Mistake CFOs Make With ERP Systems As mentioned earlier, the mistake leaders so often make is relying too heavily on communications and functional training, without considering what happens to people and processes when you introduce a massive technology project like an ERP system migration or implementation. Implementing a new ERP system is such a disruptive change that it's almost like replacing the organization’s nervous system. It changes the way people think, process information, and do their jobs. And it’s often one change among many happening in your organization. It’s not just a technology change. This is why the people side of change needs to be considered before bringing in an implementation partner. If you don't have a vendor that's going to look at the changes completely and across the board, it's easy for them to blame failure on the training. But the truth is usually that the organization didn’t do what was needed to equip people leaders with the right skills at the right time to help their teams understand what's going to change, prepare them for the new mindset, and support them through their transitions. Benefits of ERP Change Management Our correlation research on change management best practices shows that projects with excellent change management are seven times more likely to succeed than projects with poor change management. Correlation of Change Management Effectiveness With Meeting Objectives Focusing on the people side of the change goes a long way toward building trust with people in an organization. Even though it's a very difficult transition, they feel like they have support. They feel like somebody has their back. They feel heard and cared for. This is especially important if you have been through unsuccessful changes in the past because people remember. In fact, failed changes are a common root cause of resistance. Unlike a communications-and-training approach to change management, we build strategies that prepare not only the user population, but also the sponsors, people leaders, project managers and other stakeholders. We ensure that you have a change agent network of internal resources to help support the change. We don’t just send a communication to tell people to be ready for training on a certain day. Ours is a very conscientious approach to understand how we can leverage all the resources in your organization to give everyone what they need in the way they need it, so they’re prepared and ready at go-live. Unfortunately, ERP systems projects suffer consequences, including budget overruns, delays and outright failures when organizations overlook change management. Some organizations bring us into the project when they realize they need more than communications and training. When we start at this later stage, we mitigate the consequences by backtracking and gauging the gap. Then we partner with the internal change resources or the implementation partner or the project teams to really define the change journey for all the impacted people and teams, and build the right roadmap to help the organization be successful. Consider Change Management Before ERP Tool Selection So, what steps should you take now if you are planning for an ERP systems migration or implementation? Start thinking about people-side impacts and costs early on—well before selecting an ERP software or implementation partner—and identify who your change management partners will be. Discuss integration and how to prevent the formation of silos, and then double down on preparing, equipping and supporting people on their change journeys. The success of your ERP system (and realizing project ROI) depends heavily on people effectively utilizing your new technology, as well as their understanding and acceptance of any process changes the technology will support.

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Overcome Resistance to ERP Systems Changes With ADKAR

Investing in Enterprise Resource Planning (ERP) software can unify your business information resources, improve productivity, and create other long-term benefits. However, adoption challenges and resistance often create unforeseen risks and detract from the ERP system's benefits. Here’s how the Prosci ADKAR® Model can help you succeed. ERP Systems and the Need for Change To gain efficiency and reduce long-term costs, large and small companies are transitioning to ERP systems. Businesses use the systems to manage and improve processes ranging from procurement and manufacturing to financial and human resources functions across the enterprise. All these efforts help eliminate waste, improve productivity, and increase employee satisfaction. Because an ERP system integrates data into a common database, data can flow easily between operations. As a result, the system eliminates data duplication, enhances data integrity, improves ease-of-use, and helps your teams overcome siloed operations. Integrated data and processes also give your managers and teams greater insight into decision-making from real-time information. Given your significant investment in time and resources, as well as the importance of the expected benefits from the project, it’s critical for your business to recognize and overcome resistance to ERP changes through effective change management. Resistance to ERP Systems and Other Adoption Challenges More than likely, your employees have grown accustomed to familiar legacy systems. Even with all the benefits offered through an ERP tool, the migration from familiar applications to a new system sets up a series of challenges for technical and people leaders. As impacted employees move from the comfort of the current state to the disruption of the transition state and ultimately to the future state, technical challenges often provoke people challenges that lead to resistance. As part of your planning for the ERP implementation, leaders and the project team should carefully establish the business requirements and expected benefits for the project. Without clearly established requirements and benefits, people who work with the system can create unrealistic expectations. In turn, unrealistic expectations often evolve into customization requests that increase the project scope and slow the schedule. During implementation, impacted people can struggle with completing their current work while learning a new system. Project teams need to focus on all the milestones for reaching the “go live” date while implementing technological, functional and process changes at a rapid pace. And the push to learn new skills, terms and processes elevates stress levels even further. Cascading Technical and People Challenges Each of these challenges increases project risk. The need for understanding and mitigating that risk underscores the need for building strong change management capabilities in your organization. If you don’t adequately manage those challenges, the technical and people challenges of an ERP implementation can lead to dissatisfied employees and other stakeholders, increased stress, and loss of trust. Fear and Resistance to Change During an ERP Implementation The changes caused by an ERP implementation often seem intensely personal and overwhelming to employees. Newly defined processes sometimes move tasks from one department to another or even lead to organizational restructuring. Some department workloads may increase while others decrease or shift to different areas. Each of those changes break apart comfortable working relationships. And all this occurs within a project schedule that seems to have a life and vocabulary of its own. The result is often fear and resistance. Fear of Change Certainly, the fear of change feeds resistance behaviors. With any shift to a different technology, fear of the unknown shapes how your staff responds to change. Migration to an ERP system amplifies this fear because no one sees the finished product until close to the project go-live date. Even though vendors and project leads work to assure teams that more efficient workflows and a more collaborative environment are coming—and ask for patience as the process unfolds—people who use the new system may not fully accept the assurances. Fear of the Unknown Implementing an ERP system creates the need for people to learn new skills, creating pressure to upskill and reskill within a limited time. People also need to stay productive with their current workloads while learning new skills, which stresses even the most experienced people. For mid-career employees in particular, the fear of learning new skills can increase stress, complicate decision-making, and even cause physical illness. Fear of Failure The fear of failure translates into reluctance to try new processes or practices. If people work around or otherwise avoid the root causes of their fear (i.e., the learning curve), the fear leads to other resistance behaviors. How the ADKAR Model Helps You Overcome Resistance to ERP Systems Effective change management is critical during ERP implementations because of the impact on everyday work and morale. From my vantage point, the Prosci ADKAR Model offers optimal alignment with an ERP implementation and helps individual people and similarly impacted groups move through the transition in a structured way. Because the ADKAR Model emphasizes the people side of change, people managers also become more aware of the complexity in the work people do, as well as the impact software development and testing has on it. Along with its focus on the people side of change, the ADKAR Model emphasizes project success. Change management through the ADKAR Model helps business leaders mitigate resistance, highlights the ability of employees to adopt the change, and then checks back to reinforce those abilities. The Prosci ADKAR Model Here’s how each ADKAR element applies when mitigating or overcoming resistance to ERP systems: Awareness Building Awareness helps mitigate resistance by answering the questions people have about the change and its impacts on their work. Implementing any change that cuts across organizational and cultural lines requires excellent communication from leaders, people managers and project leads. As you apply the ADKAR Model, you will also need to build Awareness of the need for implementing an ERP system and communicate information about the project itself. I have found that communication must flow vertically and horizontally with clear lanes for sharing and receiving information. Desire Building Desire addresses resistance by answering the questions people have during a change, including the business “Why” behind the change and personal “What’s in it for me?” The Desire to participate and support the change begins with business leaders delivering transparent communications about the reasons for the change and then advocating for the new vision. Successful ERP implementations depend on change practitioners gathering feedback from impacted groups, people managers quickly responding and addressing barriers, and sponsors encouraging people to participate and role modeling the right behaviors. Productive communication and active participation build alignment with the objectives of the ERP strategy. Knowledge Knowledge of how to adopt the ERP system lessens fears and doubts, and helps people prepare for their role as users in adopting the change. When considering Knowledge, change practitioners should advocate for ERP training programs that address both the technical aspects of the new system as well as any process and workflow changes people need to adopt and use. While your human resources department may need training about new recruiting and onboarding procedures, finance teams will need training that addresses accounts receivable and payable processes, invoicing, purchase requisitions, and end-of-fiscal year procedures. Along with specific training for staff in impacted departments, project leads must also consider how those and other procedures affect people and stakeholders, and the type of training that best serves their needs. Ability Giving people the opportunity to apply and demonstrate new skills acquired through training helps them prepare for the go-live date while building confidence in their Ability to implement the required skills and behaviors. Change practitioners can help your organization achieve its goals by ensuring that employees have the ability to adopt and apply the changes enabled by the ERP implementation. To build Ability, change practitioners should work with people managers to provide hands-on practice and coaching. As employees across the enterprise become proficient with the new ERP tools, they can help others learn new skills. Reinforcement Resistance occurs at all stages of change, and it’s common for people to develop workarounds or revert to old ways of working. Reinforcement enables you to help people stay the course through additional support and resistance management tactics. When reinforcing the ERP system change with the ADKAR Model, change practitioners should work with the project team to gather feedback from impacted groups about how they use ERP tools. Using insights from surveys and face-to-face meetings, the project team can make changes that help people do their work most effectively. When measuring performance, change practitioners often use scorecards that show progress towards implementing changes and realizing benefits. Preparing to Overcome Resistance to ERP Changes When implementing an ERP system, change practitioners need to start managing resistance at the project’s initiation and all throughout its lifecycle. The process of managing resistance begins with assessing the organizational readiness of your business for the change, usually in partnership with the project manager and vendor representatives. The process continues with identifying primary and secondary stakeholders, assessing impacts and risks, and engaging stakeholders before the ERP implementation. I ask that change practitioners also begin to address the ADKAR barrier points for staff impacted by the change before the implementation begins. When assessing the possible resistance to change, I encourage change practitioners to apply the Prosci 10 aspects of change impact. It’s a helpful tool for defining the change for individuals, addressing individual and group impacts, and as the basis for building adoption metrics. In addition, the aspects establish a framework for becoming more responsive to employee needs and improving engagement. Prosci 10 Aspects of Change Impact Reframing and Overcoming Resistance to ERP Changes Effectively understanding and managing resistance requires you to look at it through a different lens that removes negativity and blame. Reframing resistance in this way will help you better identify types of resistance and their root causes, and build the right tactics to help people move through their barriers. Your organization can realize even greater benefits from an ERP implementation by applying a robust change management methodology that incorporates the ADKAR Model. This ensures alignment between the organizational requirements for the ERP system and the needs of the people who are impacted by the change while ensuring a solid return on your ERP project investment.

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