ERP – Change

Management – Ch-17

[Link]
 Organizational Change Management

Organizational Change Management is the discipline of managing

people and processes from an Existing state to a Future state

Priorities Outcomes
 Engage the organization and end-users (a
critical success criterion)  Right Message
 Increase the probability of success of the project  Visibleand engaged leadership
by reducing the significant risks that a change effort  Informed and committed
creates (e.g. a culture clash) stakeholders
 Provide increased control of the implementation
 Right Skills
program by managing the individual and
 People with the capability and
organizational changes required
readiness to transition from the
 Move the implementation program forward
old environment and into the new
more quickly and smoothly in order to realize
the benefits sooner ( quick wins )  Right Organization
 Guarantee the successful realization of the  Strategy,organization, process
business benefits and technology aligned around a
 Ensure that the implemented changes are common set of tangible business
sustainable in the future goals

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2 SAP Proposal Template | Section 6 - Approach to Business Process Transformation | | 31-Oct-19
 Research and experience consistently indicates the same factors
influence the failure or success of ERP transformation initiatives

Top 10 Change Barriers* Top 10 Success Factors*

Percentage of companies Percentage of companies claiming this as a
encountering the barrier critical success factor

Competing resources 48% Ensuring top sponsorship 82%

Functional boundaries 44% Treating people fairly 82%
Change skills 42% Involving employees 75%
Middle management 38% Quality communications 70%
Long IT lead times 35% Providing sufficient training 68%
Communication 34% Clear performance measures 65%
Employee opposition 33% Building teams after change 62%
People issues 32% Focusing on culture/skill chng 62%
Initiative fatigue 32% Rewarding success 60%
Unrealistic timetables 31% Using internal champions 60%

The majority of these reasons are related to people

and organizational challenges
Slide 3
3 SAP Proposal Template | Section 6 - Approach to Business Process Transformation | | 31-Oct-19
 People, Process and Technology need to integrate well for
successful ERP Implementations

Process

Technology Realize
Benefits
for the
Organiza
-tion

People
 Typical reasons people resist changes
What’s in it for me?
Why I should
change? Why I
Whether my job should put so much
will remain? effort to learn and
implement?

What will be Can I cope up

my new role? with new
Will it be technologies?
more work?

Whether I will be Do I need to go back After the project is over

able to operate the to my old place after whether my new skill
new system? If not the project? What I will be valued (which I
then what will will do there? ( Core need to learn with so
happen? Team ) much effort)? ( Core
Team )
 SAP Blueprint Reference Framework
Change Management
Project
Business Blueprint
Preparation
Define Project Onboard
Project Ongoing Project Management
Organization, Team &
Management Methodology Communicat
and Tools e Standards Manage Risk & Issue Mitigation Plan Project Governance and Planning

Foundational Strategic Detailed Process Design Workshops

Design Design
Select Visualization
Scenario SAP Baseline Configuration
Scenario Business
Conduct Assessment and Identification Process Redesign Detailed Process Design PDDs/Requirements
Business Scoping Workshops
Process
Process Global processes Functional
Standardization
Transformation Specifications
Global/Commonality Blueprint Complex processes
Organizational Hierarchy
Blueprint Workshop Workshop Preparation
Integration processes RICEF-W
Design
Schedule
Master Data Strategy
Gaps Validation
Change Develop Stakeholder Management and Communication
and Sign-
Management/ Identify
Value Impacted
Leadership /
Sponsorship
Change Impact Analysis off
Realization Stakeholders Training Strategy and Curriculum Design
Plan

Legacy System Change Vision, Strategy, Application Information Security Lifecycle

Strategy Guiding Architecture Architecture Architecture Architecture
Principles
Enterprise Sandbox System
Enterprise Data Governance / Structure /
Architecture Definition / Acquisition Technology Data
Architecture Master Data / Meta Data / Quality /
Framework Architecture Architecture
Tools, Technology, Skills Governance Security
(EAF)
Inventory Architecture
Discover Data Transition / Reference
(Analyze Source Building Roadmap Architecture
Systems) Blocks

6
 Driving successful business transformation
on an ERP project requires focus in six key
focus areas ….
• Value Realization: A detailed Value case that becomes a
“living” document and process to measure, track and hold the
team accountable for the delivery of Value

• Business Process Improvement: A targeted approach to

leveraging ERP embedded best practices while also tackling
areas that may require additional activity to deliver process
Value

• Organization Redesign (structural and business model): A

vehicle to realign organization structures to new workflows,
workload and potentially new business operating model
[ Do not put old wine in a new ( but very expensive ) bottle ]
Contd.
7
 Driving successful business transformation
on an ERP project requires focus in six key
focus areas

• Change Management: A methodical process to engage both

the team and the stakeholders and to prepare them to
embrace change and perform in the new environment

• Executive Alignment and Governance: An approach to

drive ownership of the transformation and to enable
sustainable leadership action planning and accelerated
decision making

• Knowledge Transfer and End User Training: A vehicle to

enable users to perform their process roles within the new
system’s environment

8
Why Conduct Change Management During
an ERP Transformation?

Implementing Transforming
SAP? with SAP?

Making sure the VS.

Making sure the organization
organization is ready to achieves the Business Case
adopt the new solution for the project

Which of the two scenarios is to be preferred and why ?

9
Large scale transformation programs often do not
succeed: Key reasons
Communication or Perception
People issues issues
 Employee resistance  No perceived need for change
 Lack of middle and senior  Insufficient or ineffective
management support communications
 Insufficient change management  Lack of clarity of objectives and vision
skills
 Cynicism
19%
Other
31% 4%

15%

31%
Project Management Integration issues
issues
 Presence of functional
 Competing resource priorities boundaries
 Long implementation time  Working across geographic
 Initiative fatigue boundaries
 Lack of momentum  Lack of coordination across
change initiatives
Source: A recent IBM survey of Global 500 companies
10
Change Management is an integral component across all work streams
( a Key [Link]. Responsibility )
Phased SAP Implementation Timeline

Hyper
Preparation Blueprint Realization Test Final Prep - care

Process design and staffing

Executive vision & levels as input to change impact Change impact Super user Project team
End-user
commitment analysis workshops & on-boarding support of SAP
training
activities role guides end-users

Organization Change Implementation Timeline

Mobilize /
Awareness
Change Impact Change Readiness Training Support go-live

 Deliver  Support
 Define case for change  Document org and role change  Develop job-role map and role training hyper-care
 Create Change Mgmt Strategy impacts guides
 Assess team
 Team kick-off, effectiveness  Implement org assessments (i.e.,  Communicate change impacts Site  Document
 Value Realization Prep culture, resistance, etc.)  Prepare organization for changes readiness lessons
 Communicate Exec Vision  Produce baseline report,  Engage Super Users / Site learned
 Align Executives/Leaders scorecard reporting for Value Rollout teams
 Mobilize Change Agents Realization
 Plan Stakeholder actions  Mitigate change readiness risks
 Roll out communication plan
 Execute Stakeholder
• Activities can occur in Engagement Change Mgmt/ Value
 Help ID Super Users
• Blueprint Realization Route Map
• and Realization  Plan and execute role mapping
strategy and activities*
Training See next slide
 Design Training Strategy &
Curriculum
11 Contd.
Change Management is an integral component across all work streams
(including value realization and training activities)

Organization Change Implementation Timeline

Mobilize / Support go-
Awareness
Change Impact Change Readiness Training live

Document Organization and Role change impacts

Implement Org assessments (i.e., culture, resistance,
etc.)
Produce baseline report, scorecard reporting for
Value Realization
Mitigation Plan for Change Readiness Risks
Roll out Communication Plan
Execute Stakeholder Engagement
Help Identifying Super Users
Plan and execute Role Mapping strategy and
activities
Training
Design Training Strategy & Curriculum for all
Stakeholders

12
 Change Management for ERP Transformation

Program
Leadership and
Focus on strategic Governance
execution
Program Organization
Strategy and Design
Management Value
Realization
Culture Stakeholder
Focus on Transformation Engagement and
Communication
People Change
Skills and
Knowledge

13
 Communicate to Encourage Commitment
• Successful Change Management involves building awareness and
understanding through communication and feedback mechanisms.
• Frequent communication & consistent messages help reduce
confusion, rumors and resistance.
• Key messages will include changes, their impact and action plan to
mitigate risks

Change acceptance curve

Active
Participation Commitment
Acceptance

Understanding Understanding

Awareness
Informing
Time
14
 Stakeholder Engagement

What is stakeholder engagement ??

§ A strategic, intentional and systematic process to
identifying and managing key stakeholders in order to build
support and commitment to the Change

Who are stakeholders? Who are key stakeholders?

• All individuals or groups § Those stakeholders who
have the ability to impact or
of individuals (internal or
influence the Change
external) who will be
impacted by the Change

15
 Execute the Appropriate CM/VR Activities Per Phase,
Strategy
Stakeholder Assessment Team Effectiveness
Stakeholder & Risk Change Leadership Survey
Management Survey
A key feature of an adaptive supply chain is the ability to

Assessment Sense and Respond in real-time

Monitor the
environment and
sense critical
demand signals,
events and changing
Interpret
Interpret the information
and evaluate if it is
something to react to or to
ignore
&
conditions
Evaluate

Monitor
&
Sense
Event
Decide
Manage the sense &
&
respond cycle to insure
completing the process Plan
as rapidly and effectively
as required
Decide what
response is best and
Response plan to implement it
Respond
&
Reconfigure
Execute
&
Respond to the needs.
Adapt
Execute and redeploy.

Reconfigure or adapt, operations to

meet requirements, change course
of action

Communication & Training

Strategy and Plan

Organization Alignment
Role / Responsibility
Mapping Value Realization Org Readiness & Impact
& Transition Planning Identify Benefit Opportunities Assessment
Establish Business Case Primary Concerns Key Issues Analysis Vehicles
Readiness Criteria Score

Benefit
What is the current Change History and Resistance to Change R
level of commitment?


Value
What is the Confidential
level of Change Leadership Style Y
sponsorship

Realization
What is the current Readiness

Secure
Secure Benefits
Benefits Ownership
for this level of support? Survey

Ownership
project Management Support G

Realization
across the
organization?
What is the current Integration of Tools and Technology R
level of acceptance?

Communications Process and Infrastructure Y

How is direction and
 What are the organizational orientation
communicated and Training R
key risk
defined?

Develop Benefit Measures

areas that
Confidential
drive
Change Metrics Management and Processes R
Are we ready for organizational
How is Readiness
performance
this SAP enabled in the current
direction/orientation Survey
Y
strategically deployed? Work Environment
transformation? organization
and how do
we plan to How are the operational Problem Resolution Y
mitigate activities aligned to
them? create value for the
customer?
Rewards and Recognition Y

Develop Benefit Action Plans Teamwork G

 How do we
ensure that we Decision-Making
What are the BU Y
have the right Various
drivers?
solutions Planning
targeted at the Initiatives Issue-Raising Y
right places at What are the
the right times? Technology drivers?
Understanding of Business Case for Change R

16
 The ‘Orming’ Stages of Team Performance

Forming Members are on best behavior; they look to

Leader for direction; they avoid controversy and
risk; they focus on completing the task at hand

Marked by conflict & competition; questions

Storming arise about responsibilities, guidelines, rewards,
evaluation, and authority

Members are beginning to work in partnership;

Norming productivity increases; growing feeling of trust;
willingness to change pre-conceived ideas or
opinions
Frequent agreement on goals, roles, and norms;
members devoted to producing results; shared
Performing sense of loyalty toward each other and the Team
as a whole; conflicts don’t get personal; Team
members hold each other accountable, high
performing

17
 Team Effectiveness

• Have the same mission/purpose (that is

‘deliver on time, on budget, on value’)
• Conflict is good if managed well and
the team moves through it
• Frequent Team and Communication
building
• Celebrate success
• ‘A’ word (accountability) is important

18
 What are Change Impacts?
• The change generated by such changes is called Change
Impacts
• The implementation of the ERP solution will create changes in
the ways of working, processes, systems, responsibilities, etc.
• The identification of Change Impacts is needed to help mitigate
the change

New Processes

Change
Impacts
New Systems
New Ways of
Working
New
Responsibilities
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 Change Impact Analysis (Outcomes)
PDDs( Process Description Docs) are the source of Change Impact
Assessments which contribute directly to all areas of Change
Management, providing input into communications and stakeholder
management, and end user learning.

PDDs Document
Change Impacts
to existing
Processes

PDDs
Deliverables
Communicati
on Strategy Communication
and Plan for Materials

Change Impact –
all
Service Delivery Stakeholders
PDDs Model

End-User
Training
PDDs Strategy Training Materials
Change Impact
– IT Systems and Plan

20
 Organization
Readiness

21
 Organization Readiness is required …

Org Readiness & Impact Assessment

• To minimize change barriers, Primary Concerns Key Issues Analysis Vehicles

Readiness Criteria

Change History and Resistance to Change

Score

decrease resistance, and revise

What is the current
level of commitment? R
 What is the Confidential
level of Change Leadership Style Y
sponsorship What is the current Readiness
for this level of support? Survey
project Management Support G
across the

Change Management interventions

organization?
What is the current R
level of acceptance?
Integration of Tools and Technology

Communications Process and Infrastructure Y

How is direction and
organizational orientation

accordingly
 What are the R
key risk communicated and Training
defined?
areas that
Confidential
drive
Change Metrics Management and Processes R
Are we ready for organizational
How is Readiness
performance
this SAP enabled in the current
direction/orientation Survey
strategically deployed? Work Environment Y
transformation? organization
and how do

• To measure, report and respond to

we plan to How are the operational Y
activities aligned to
Problem Resolution
mitigate
them? create value for the
customer?
Rewards and Recognition Y

Teamwork G

changes in commitment levels while

 How do we
ensure that we Decision-Making
What are the BU Y
have the right Various
drivers?
solutions Planning
targeted at the Initiatives Issue-Raising Y
right places at What are the

identifying key trends

the right times? Technology drivers?
Understanding of Business Case for Change R

• To report to leadership the impact of

large scale change, anticipate and
respond to resistance
• To prepare the organization

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 Strategy To Handle Change

Strategy to handle change for the project team are as follows:

First Level - Handle fear and uncertainty

 Communicate
 Training
 Having a team of Power / Super users and ERP champions ( fear
psychosis for Consultants )
 Round the clock Help Desk support
 Leadership support

Second level – Getting motivated and committed

 Organizational Design
 Communication

Communication can have different objectives like:

 Make the entire organization aware of the project

 Update project stakeholders on the regular status of the project
( difference with non-IT projects )
 Congratulate people as soon as one project milestone is achieved
 Make people aware of what new is going to come – new processes, new
roles
 Inform the core team member much before the project ends that what
will be their new role
 Communication is also needed from the senior management team
ensuring employees that “ERP implementation is not to take out their
jobs” but to help them in doing something more interesting and more
value adding for the organization.
 Communication Strategy

A communication strategy can have different elements like:

 Identify the right audience for communication

 Methods and vehicles for communication according to the

audience ( e-mails / house magazines / town halls /
department level meetings / demo sessions / visualiztion etc)

 Determine communication frequency / time frame

 Who should be communicated What

 Determine communicators
 Getting Motivated and Committed

Getting motivated and committed to the project is a higher level of change

management challenge as different people get motivated in different
ways.
 Their will be always a group of people who are always self motivated
 Their will be another group in the core team who may be motivated for
not so desirable reasons
 There is a third group who wants to see clearly “What’s in it for me” i.e.
why he should put so much effort in doing the project.

Some of the common strategies to keep people motivated are:

 Involve employees in each critical ERP decisions, discussions
 Design incentive schemes and performance measures: People need to
have incentives to adopt new ways of working
 Design new and more interesting roles
 Organizational Design
 Any ERP implementation need a bit of redesign of existing organization
structure as new technology will create new roles and new job
descriptions.
 The basic objective of Organizational Design is: “The architecture of the
organization needs to be aligned with the new process and technology”.

So Organizational Design means:

 New Roles and Responsibilities
 New Reporting Structure
 New Job Descriptions
 New Performance Measures and Incentive systems can play an
enormous role in determining and reinforcing desired culture or
behaviors.
 Change Team
 The organizational change management strategy includes creation of
the core and extended Change Team.

 The Change Team Lead: He must know the organization well and be
well-respected within it. The team lead will become the symbolic face of
the organizational change management program. Therefore, the more
credibility he/she holds in the organization the better.
 Core Change Team: Implements organizational change management
steps and reports to Project Sponsor and Change Lead. They are
dedicated resources from HR, OD Professionals or Consulting team.
The Core Change Team is ideally a mix of long and short-term
employees who can bring a wide range of company experience to the
team.
 Extended Change Team: Introduces and conducts risk assessments,
communicates about the project, implements action plans. They can be
part time members from line management or consulting team.
Approach for Managing Change Impacts

6
Monitoring & Reporting
5
Begin Implementation of Action Plans
4 Create Action Plans with Owners
3 Group the key Change Impacts
2
Determine impacts of To Be solution by stream
1 Understand the To BE processes and solution

29
 Organizational Change Management – ASAP way

ASAP Org Change Management Processes

Supporting Aligning jobs and processes

with the new business
Organizational
Optimization environment

Capturing and sharing lessons

Knowledge
Transfer learned

Skills Org Change management

Development training
Designing and delivering
Core Communications key messages

Gaining & demonstrating

Sponsorship leadership support

Uncovering and prioritizing

Assessment risks
 A few quotes…
“If you want to make “Illness strikes men when “If you have always
enemies, try to change they are exposed to done it that way, it is
something.” change.” probably wrong.”
Woodrow Wilson Herodotus, Greek historian Charles Kettering,
Inventor
“The art of progress is to
preserve order amid change
and to preserve change amid
“If you always Do what you always Did,
order.”
You will always Get what you always Got.”
Alfred North Whitehead
Albert Einstein

“Itis a terrible thing to look over your

shoulder when you are trying to lead -
and find no one there.”
Franklin Delano Roosevelt

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31 SAP Proposal Template | Section 6 - Approach to Business Process Transformation | | 31-Oct-19
 Questions

?
?
?
32