For ERP Success, Plan on a Culture Change

When enterprise resource planning software fails, it’s usually because thecompany didn’t dedicate enough time or money to training and managingculture-change issues. “Faulty technology is often blamed, but eight out ofnine times, ERP problems are performance-related,” says Pat Begley, seniorvice president of educational services at SAP, an ERP software company inNewtown Square, Pennsylvania.

    One of the biggest mistakes that companies make when they launch new ERPapplications is assuming that they are going to be like any other piece ofsoftware, says David Stanvick, vice president of marketing for Knowledge Impact,an enterprise-system consultancy in Wayland, Massachusetts. “Microsoft Word isa productivity tool–whether you use it doesn’t impact anyone else in thecompany–but an ERP is a totally new environment. Everything you do in an ERPaffects the success of the company.”

    When used appropriately, ERP software integrates information used by theaccounting, manufacturing, distribution, and human resources departments into aseamless computing system. A successful ERP can be the backbone of businessintelligence for an organization, giving management a unified view of itsprocesses. Unfortunately, ERPs have a reputation for costing a lot of money andproviding meager results, because the people who are expected to use theapplication don’t know what it is or how it works.

    Training is often last-minute and weak. It usually covers only how to dospecific job-related tasks, without exploring the role those actions have withinthe rest of the business cycle. “ERP is more than just a new software system;it’s a cultural change,” Stanvick says. “If training doesn’t cover whyeach task is important and how every transaction is part of a larger process,then end-users are less likely to use the application correctly or consistently.”That results in flawed data and a skewed view of the business. “You can’tjust teach end-users how to fill in fields and click buttons; you have to showthem how their actions impact their colleagues.”

    New ERP systems usually require employees to do more or differentadministrative tasks that don’t add obvious value to their jobs. If they don’tunderstand why that information is important to other members of the company,they will find ways to work around it, Stanvick says. For example, a salespersonusing a new sales-force automation process might be expected to fill out a “leadsource field” validating where he finds each new client. It doesn’t help himwith his customer-tracking process and he’s never had to do it before, so heskips it without realizing that the marketing department bases its productivityrates on that information. As a result, the budget for marketing is cut becausetheir efforts appear to be ineffective, and suddenly the salespeople areoutraged because their leads have disappeared. “You have to connect the taskback to the ‘what’s in it for me’ factor or end-users won’t do it,”Stanvick says.

    To ensure that users fully understand the necessity of using the toolcorrectly all of the time, you should begin with a needs analysis to evaluatetheir technical savvy, their existing job processes, and the impact the systemwill have on their roles, says Susan Charley, vice president of compensation andHR operations for Oracle, an enterprise-software company in Redwood Shores,California. “Look at where your people are now and what they will need tochange in order to assimilate the new tool.” Training should includeinformation about their new roles and responsibilities, the business objectivesof the initiative, and the projected benefit to the company and to users.

    Early and constant communication is also critical to ease them through thetransformation, Begley says. Explain why you are implementing this tool and howit will make them more profitable or satisfied. “End-users will want to knowwhy they can’t do it the old way,” she says. “They need to know why thechange was necessary and why management thinks it’s important.”

Workforce, September 2002, pp. 88-94 — Subscribe Now!