Success Is In The Journey and Not Just a Final Destination

Success Is In The Journey and Not Just a Final Destination

Success Is In The Journey and Not Just a Final DestinationERP organizational change success is in the project life-cycle journey (pre, go-live, and post) and not just a final “go-live” destination. ERP organizational change research suggests that the stakeholder idea of “success” may vary with time. Additionally,  “success” can also improve more and more over time.

“Success” Needs to Be Objectively Managed

When it comes to ERP organizational change, success is a process and not simply a final destination that occurs when you “hit the switch”. Clearly, there are critical objectives that need to be met at the time of a “go-live” (no operational downtime, no customer delivery issues, no product or service quality issues, ability to invoice, etc. etc. ). That is, once an organization “hits the switch” (and throughout the entire ERP organizational change life cycle for that matter) the opportunities for organizational continuous improvement, organizational learning and sharing, and further leveraging your new ERP has just begun. This notion may indicate a few points:

  • Organizations need to be deliberate, formal, and detail-oriented in how they define and communicate success. Much ERP organizational change research (as noted in previous posts) indicates that often success can be subjective and the definition can change over time either for individuals or stakeholder groups.
  • Organizations also need to be deliberate, formal, and detail-oriented in how they measure and evaluate “success”. Furthermore, organizations need to be able to effectively re-calibrate as needed in order to achieve the organizational definition of success. Throughout the entire ERP organizational change life-cycle, KPIs and metrics that are tactical and concrete (and incorporated to measure “success” specifically) should be a part of an ERP organizational change plan.
  • Organizations need to be realistic and honest about the nature of large-scale ERP organizational change. (Moreover, this knowledge needs to be considered in how an organization ultimately defines and measures success). That is, success doesn’t always come easy as indicated by objective and vendor-neutral ERP organizational change research.  Even successful ERP organizational change endeavors often realize significant challenges.
The Ebb and Flow of “Success” 

Throughout an ERP organizational change endeavor, “success” can often vary with time and can also improve over time. This is perhaps due to 1) the notion that stakeholder perceptions of success can be subjective and change over the course of a project (for a variety of reasons), and 2) the fact is, large scale organizational change actually does naturally experience “dips and peaks”. As Dr. Denison stated in a video, “The Impact of Culture”, “Stability is a big enough challenge in a predictable environment”, let alone during often extremely disruptive (even for successful endeavors) ERP organizational change. This means that organizational stakeholders may ebb and flow over time in how success is perceived, defined, or expected. And, while this “ebb and flow” can be a productive and natural part of ERP organizational change, perhaps this “ebb and flow” is best managed by sound transformational leadership in order to best guide the unpredictable challenges and environments. (More to come on “Transformational Leadership” in the next couple of days with friend and colleague Dr. Justin Goldston.)

In part, ERP organizational change consists of an accumulation of how well transformation “success”  is properly defined, managed, and advocated for throughout the entire ERP organizational change lifecycle.  Perhaps, as indicated by research, perceptions of success can/do change with time and position in the project’s lifecycle. But perhaps, being cognizant of this natural “ebb and flow” of ERP organizational change, transformational leadership could be prepared for and advocate for success even during, the “dips” in the ERP organizational change success graph? The fact is, even highly successful endeavors often realize significant challenges…but yet they were, well, successful.

About Nestell & Associates: https://nestellassociates.com/about-us/

ERP Success Does Not At All Imply The Absence of Significant Challenges And Risks

ERP Success Does Not At All Imply The Absence of Significant Challenges And Risks

By Dr. Jack G. Nestell
Success Does Not Imply An Absence of Significant Challenges

ERP Success Does Not At All Imply The Absence of Significant Challenges And RisksERP organizational change success does not at all imply, assume, or require the absence of significant challenges and risks. ERP organizational change research suggests a common theme in that perhaps most (if not all) large-scale ERP organizational change endeavors experience significant challenges and potential risks. This also holds true even for successful ERP organizational change.

ERP organizational change success certainly does not appear to completely excel at the total prevention of significant challenges. Instead, over time, successful ERP organizational change appears to excel at the response to significant and unexpected challenges. Successful organizations appear to excel at how they address and approach significant challenges perhaps via teamwork, leadership, and healthy organizational culture. That is, for those organizations that have realized successful ERP organizational change, success does not at all imply an absence of significant challenges. Perhaps the successful organizations and their leadership address challenges when they do surface in similar ways (more to come on this note).

All organizations are likely to experience significant organizational change challenges during a large scale ERP organizational change endeavor. The difference-maker perhaps is not just in how organizations try to prevent issues and challenges proactively, but also in how they respond to issues and challenges when they do occur. Research-based evidence demonstrates that although successful organizations fully understood the potentially significant challenges prior to the ERP organizational change efforts, they still experience challenges and potential project risks none-the-less. That is, the prior knowledge alone that ERP organizational change endeavors are often extremely challenging was not sufficient to prevent or adequately prepare for the ERP organizational change challenges.

ERP organizational change research also suggests that although organizations that would consider their ERP organizational change effort generally successful also indicated they had much to learn in which they were not previously aware of and that they would have done some things much differently. Even successful organizations experienced challenges in the areas of technology, process, and/or organizational culture during an ERP organizational change effort. Successful ERP organizational change can be extremely challenging, often possibly headed for failure. And, even for organizations that “at the end of the day” would consider themselves successful often have to spend significant time, money, and effort to correct and address challenges.

What Does ERP Organizational Change Research Generally Suggest to Mitigate and Reduce Challenges?

First, “dot the I’s and cross the t’s” when it comes to project details in order to ensure readiness and preparedness. Implement sound project management. Second, implement a plan that is founded on organizational change principles. Execute against a plan that ensures proper evaluation, measurement, application, and communication. Third, set honest and realistic expectations regarding ERP organizational change success requirements. And Fourth, be mindful that in order to be successful “dotting i’s and crossing t’s” is absolutely critical. But, also absolutely critical is how the organization responds when things don’t go as expected. This response could be the difference between being successful or unsuccessful. Ensure that your leadership and organizational culture are prepared and aligned in how risk is managed and how transformation is advocated for. ERP organizational change study would also suggest that perhaps two ingredients in the glue that best allows for working through a significant challenge, or the unexpected, is transformational leadership and a healthy organizational culture best capable of advocating and supporting transformation.

All organizational contexts are extremely different and, unfortunately, no magic pill exists for ERP organizational change success. But the more your approach is grounded in principle and how leadership and the organization responds to challenges…is certainly a significant influence.

Practical Tip

It is critical to set honest and realistic organizational expectations. Focus on, and try to excel at, mitigating risks and preventing issues from becoming substantial challenges. But, just as important, focus on and try to excel at responding to challenges in a way conducive to transformation and success.

Be wary of ERP vendors who state “we have a perfect record”, “we are always on time”, “we are always on budget”, or “we always deliver all functionality”. Be wary of these ERP vendors if objective vendor-neutral statistics and research is any indication. Request the details of  ERP organizational change plans. What tactical steps are taken to ensure organizational readiness? What tactical steps are taken to ensure proper training? What tactical steps are taken to ensure organizational culture alignment? What tactical steps are being taken formally, to be honest, and realistic to the organizations about the realities and expectations? These are important questions to ask.

Don’t expect perfection as no large scale ERP organizational change projects are 100% perfect. But, do expect that how an organization responds to challenges and the unexpected could separate your organization from the unfavorable statistics.

About Nestell & Associates: https://nestellassociates.com/about-us/

Want more on organizational change? A great read!  “Reframing Organizations: Artistry, Choice, and Leadership” by Lee G. Bolman and Terrence E. Deal

https://onlinelibrary.wiley.com/doi/book/10.1002/9781119281856

A well said quote that we dug up from our ERP article archive……

A well said quote that we dug up from our ERP article archive……

well said erpInsightful and true quote. Effective and efficient purposeful training, training evaluation, training application, and training that supports business objectives are significant ERP organizational change influences.

A significant insight learned from this study is that end-users across the organization must be educated from the onset of ERP implementation. Although education is a corner-stone of ERP implementation, the user training is usually only emphasized and the courses are centered on computer/system operation rather than on understanding the ERP concept and spirit.” (Yu, 2005)

Chian‐Son Yu, (2005) “Causes influencing the effectiveness of the post‐implementation ERP system”, Industrial Management & Data Systems, Vol. 105 Issue: 1, pp.115-132, https:// doi.org/10.1108/02635570510575225

 

The Nestell & Associates Team is Pleased to Welcome Dr. Liz Bywater to Our Squad

The Nestell & Associates Team is Pleased to Welcome Dr. Liz Bywater to Our Squad

Nestell & Associates would like to welcome our friend and colleague to our team, Dr. Liz Bywater 

Dr. Liz BywaterAt N&A we place great emphasis on the “human element” of ERP organizational change. ERP organizational change goes far beyond just being an IT and/or PMO project. Successful ERP organizational change starts with the executive team and the organizational culture. That is, for one, why our ERP organizational change approach includes an organizational assessment first and foremost. In partnership with our friends and colleagues at Denison Consulting, a pioneer in the space of organizational culture and leadership, we utilize their industry-leading Denison Organizational Culture Survey to understand the temperature and dynamics that exist within our clients’ organizations. After all, it is difficult to fix what you don’t measure and can’t easily see. This especially goes for the more abstract and intangible influences such as organizational culture and leadership. After you assess organizational culture, then you need to execute for opportunities to improve.

Dr. Liz Bywater joins the N&A team as a strategic partner and trusted advisor, friend, and colleague. As such, she will support the rest of the N&A team and create dramatic value for our clients through her robust thought leadership and insight. Liz will provide strategic guidance to our clients and drive value as one of N&A’s “boots on the ground” organizational leadership experts.

An undeniable and significant influence on successful ERP organization change is organizational leadership and culture. N&A believes that creating a corporate culture consisting of a cohesive relationship with all stakeholder groups is critical. Liz has joined us to support and advance that mission.

Dr. Bywater’s Bio: 

Dr. Liz Bywater is a uniquely qualified leadership expert who works at the intersection of business and psychology. She combines deep expertise in human behavior and organizational effectiveness, a pragmatic mindset, and an engaging personal style to help clients excel in an increasingly complex world. Liz brings a rapidly actionable framework for success, which is captured in her new book, Slow Down to Speed Up: Lead, Succeed and Thrive in a 24/7 World.

C-suite leaders, private equity partners, and corporate boards enlist Liz’s help to: accelerate profitable growth, drive rapid success of mergers, acquisitions, and organizational transformations, navigate high stakes leadership transitions, establish stellar customer relationships, supercharge innovation, increase strategic agility, eliminate fire-fighting, and reap the rewards of extraordinary collaborations and partnerships.

Dr. Bywater is a leadership columnist for Life Science Leader and provides expert commentary for the Wall Street Journal, Fast Company, FierceCEO and other top media outlets. She sits on the Editorial Advisory Board for Life Science Leader and has been a featured guest on CBS’s Philadelphia Agenda, Remarkable Women and a host of top leadership podcasts. She is a popular keynote speaker and long-standing member of the American Psychological Association and the Million Dollar Consulting® Hall of Fame.

Learn more about Dr. Bywater:  https://www.youtube.com/watch?v=NjgbtBoINCg

About Nestell & Associates: https://nestellassociates.com/about-us/

 

De-risk Your Portfolio ERP Project:  Organizational Culture

De-risk Your Portfolio ERP Project: Organizational Culture

De-Risk your Portfolio ERP Project

Authored by Dr. Jack G. Nestell & Michael G. Schwendeman

Organizational Culture is Much More Than a Buzzword

Organizational culture is much more than a buzzword and deserves much more than a casual agreement as to its importance.  In his article “What leaders need to know about organization culture”, Warrick (2017) states three critical points in his abstract. First, “A major factor in the success of an organization is its culture.” Second, “Unfortunately, many leaders are either unaware of the significant impact culture can have, are aware but overwhelmed by the extensive and sometimes conflicting information available on culture, or are not well informed about how to build and sustain cultures effectively.” And third, “Developing organizational culture requires far more than talk about culture and emphasis on its importance.”  These are all key points supported by both enterprise resource planning (ERP) as well as organizational culture research.

Portfolio Organizational Culture is a Key to Successful Risk Management

 Research-based evidence suggests that no company should engage in a large scale multi-million-dollar ERP project without adequate organizational change assessment and readiness. A direct link exists between corporate culture, organizational performance, and de-risking large scale ERP organizational change. Research from Denison Consulting suggests that when analyzing top and bottom performing organizations for risk management and their corresponding culture scores that there is a positive correlation between culture and risk management. Dr. Denison is one of the pioneers in the field of organizational culture and assessment. Dr. Denison’s research was the foundation of the Denison Culture Model and the Organizational Culture Survey, out of which the practice of measuring and consulting on organizational culture has emerged with Denison Consulting beginning in 1998.  Based on Denison research, corporate cultural indicators of Risk Management for successful organizational change scenarios include organization-wide consensus on how much risk to take, alignment on areas of business where risk-taking is acceptable, continuous monitoring of old and new risks, leadership support for appropriate risk-taking behaviors and awareness, and employees that are comfortable discussing risks. Since ERP organizational change can create many risk opportunities as well as be impacted by many risk factors, portfolio organizational culture is a key to successful risk management.

ERP Organizational Change: A Valuable But Risky Proposition

ERP systems are widely accepted as one of the best mechanisms for organizations to gain competitive advantage (Sekulić, Lolić, & Stefanović, 2018). ERP systems bring can bring value to organizations in a variety of ways such as improved accuracy, visibility, and timeliness of business information, increased process efficiencies, and improved integration of business units. However, the process of ERP organizational change and implementation can create significant business risks. Al-Shamlan and Al-Mudimigh (2011), as well as Al-Fawaz, Al-Salti and Eldabi (2008), describe ERP implementation failure rates between 60-90%, which demonstrates ERP organizational change failures is a problem. While the definition of failure can be defined differently and certainly can be subjective, the risks are real. In fact, culture-based and culture-induced risks can become large-scale incidents and result in a significant amount of wasted time, money, effort, and even organizational reputation. The risk to the organization’s ERP assimilation goal if success is not achieved could also lead to a loss in production, a decrease of product quality, loss of customers, decrease in profits, loss of sales, plant closure, bankruptcy (Scott, 1999), and potentially even lawsuits (Grossman & Walsh, 2004). All of these circumstances are documented in literature, case studies, and articles with evidence demonstrating that ERP failure is extremely costly to U.S. organizations.

ERP Organizational Change: The Value of Organizational Culture is Clear

ERP assimilation risk is a significant problem directly related to many complex and dynamic factors. As proposed “successful” ERP implementation factor research has evolved, research is, and has, also considered the non-technical side of ERP organizational change in an effort to understand how leadership, organizational culture, team performance and measurement, and diversity might be important. Research clearly demonstrates the value and criticality of corporate culture. Corporate culture is an elaborate system of norms and values that evolve over time and is the collective binding that governs the values, ideals, and beliefs shared within the organization (Ke & Wei, 2008). Organizational culture and organization-related influences are necessary to understand because as described by Denison, Haaland, and Goelzer (2003), organizational culture characteristics, which can be measured and monitored, may have a predictable impact on the effectiveness of organizational change. Therefore, organizational culture can be impactful in determining perceptions and behaviors and it is a key concept to note in terms of how organizational culture can impact change and success.

Ke and Wei (2008) described that when there exist varying and mixed cultures of leadership within organizations, employees will have different ideals, perceptions, and understandings of ERP organizational change efforts, which has a direct impact on change acceptance from the employees. Annamalai and Ramayah (2013) established that organizational culture regulates the relationship between success factors and assimilation success of the ERP projects. Annamalai and Ramayah (2013) further state that organizational culture must highlight the value of common goals. Phenomena at individual, group, organization and society levels determine the use of ERP systems, and utilizing a context-aware perspective has to begin with the awareness and notion that an ERP is not just a physical artifact but also an artifact of an organization’s culture (Howcroft, Newell, & Wagner, 2004). Furthermore, Ifinedo (2017, p. 38) states that “On the organizational cultural front, firms planning to adopt and those that have already adopted ERP must ensure that collaborative, cooperative, and, supportive attitudes are promoted in the organization. Our data analysis revealed that ERP success may be enhanced when such cultural attributes are rated highly.” Denison research has also demonstrated a clear link between organizational culture and business metrics and can clearly demonstrate the ROI of culture change efforts (Denison, 1984; Denison & Mishra). The significant value of healthy organizational culture as a key factor to ERP assimilation success cannot be denied.

De-Risking ERP: Measuring Organizational Culture

Denison (1984) states that the primary and fundamental identity of an organization is based on its organizational culture: the set of values, beliefs, and behavior patterns. One way to mitigate risks is to therefore understand and measure your organizational culture “temperature”. There are organizational change influences that culture impacts and that also increases the likelihood of ERP organizational change success. Research has demonstrated that culture can be measured and be of significant organizational value. The Denison Model was built to explain the cultural factors leading to financial performance and organizational effectiveness (Denison, 1990). For the success of the organization, there are specific cultural conditions influencing the organization that should be measured and then appropriately acted upon.  It is important to get a strong sense of where an organization’s culture is prior to any significant change effort takes shape. Why? If you agree that culture is important to your company’s success, would you not want to know as much about the culture as possible before investing your resources?  Measuring how employees perceive the organization’s culture can help surface departments or teams that are aligned and working effectively – and others that are not – so cultural best practices can be shared across the organization. If the culture isn’t aligned with the change effort and there is not widespread buy-in to it, it simply won’t work.  As Dr. Brown (Nestell & Associates Strategic Advisor) says, “Different types of enterprises have more complex strategies and operational activities comprising them than others, yet with a cultural lens we can see how well a company translates its mission and strategic intent into a measure of capability development at the operational level. How well does the culture translate ideas into action that has impact?”

ERP Organizational Change Practical Tip: Objectively Measure Your Organizational Culture

Recently “culture” appears to have become even more and more of a buzzword when it comes to digital transformations or ERP organizational change. But, Private Equity portfolios can drastically de-risk their ERP organizational change by building into the project plan deliberate, intentional, and concrete activity in which to measure, promote, build, and encourage organizational teamwork just for an ERP project. As long as there are organizations, ERP organizational change will include people/culture, processes, and technology. As long as ERP solutions are being used by human beings and business cultures, the criticality of the dynamic interplay between the people/culture, processes, technology triad is not going anywhere and will always play a significant role in successful ERP organizational change.

Measuring Organizational Culture: The Tool (Founded in Sound Research and Principle)

The de-risk solution lies in an effective and proven tool. During ERP organization change, organizations face risks daily and need a system in place to deal with them. The risks of the modern work environment are plentiful: increasing industry regulations, stakeholder pressure to grow and reach new levels of profitability, and the rapid advancement of technology, not to mention increasingly volatile international trade relationships and markets. These factors underscore the need for a systematic approach to risk management that considers the underlying culture of the organization, a leading driver of risk management.  The Denison Risk Management Content module measures the effectiveness of risk management practices in an organization and is designed to complement the Denison Organizational Culture Survey (DOCS) by specifically capturing employee perceptions of various aspects of risk management. In addition, Denison’s core culture model includes assessments like Engagement, Commitment, Innovation, and Diversity & Inclusion, which are considered employee outcomes that are impacted by organizational culture and have a significant influence upon ERP organizational change. At its core, risk management is about how organizations detect and respond to risks and change. Risks are forces or conditions that threaten to inhibit the success of organizational change. Effective risk management involves several core capabilities and a specific mindset. Organizations with effective risk management practices are hyper-vigilant – they continually look out for and monitor risks. In these organizations, employees speak up about risks and leaders listen to concerns and encourage honest discussions around them. Also, employees are clear about the appropriate level of risk to take and how to handle risks when they arise. Private equity portfolios can use a scientifically based and proven method to de-risk ERP organizational change.

Risk Management Practices, Procedures, Acceptance, & Policies Need to be Successfully Implemented

Preliminary research from Denison Consulting reveals that risk management is most related to the organizational characteristics of empowerment, agreement, coordination & integration, and core values. These are all significant factors in ERP organizational change success. Specifically, to achieve successful change via effective risk management, it is important to establish a consistent and predictable approach to business (and ERP organizational change) that is widely agreed upon across different levels and business areas of the organization. Decision-making must be delegated to the level where the best information is available, and that information must be widely shared. And, there must be a clear set of values communicated and practiced by leaders within the organization. Organizational culture influences the deployment and effectiveness of risk management, as well as the amount of risk-taking that employees perceive, is acceptable. For successful ERP organizational change, risk management practices, procedures, and policies need to be successfully implemented.

Risk management needs to be integrated into an organization’s culture. Changing policies and practices without changing culture can lead to compliance without adoption, undermining risk management efforts. Failure to integrate risk management into the culture of an organization is one of the top barriers to managing risks effectively.  Formal risk management control mechanisms dictate what the organization and its people should do, whereas culture dictates what people really do. Rules and regulations do help but it is not as simple as “the more the better.” A prominent feature in many incidents is that the system underlying risk management broke down, not because of the way risk was managed via policies and procedures, but because the organizational culture did not place an emphasis on managing risks and change. Organizational culture heavily influences employee behavior and attitudes and is considered a leading risk factor in companies’ organizational change success. As Hartl and Hess (2017) state in their article “The role of cultural values for digital transformation: Insights from a Delphi study.”, culture is often understood to be a valuable strategic asset with incredible potential to promote and sustain organizational change with the deployment of digital technologies, and organizational culture can also be a significant factor contributing to change prevention. “In research and practice alike, cultural change is perceived as essential for successful business transformation.” (Hartl & Hess, 2017).

Jack Nestell and Nestell & Associates would like to extend and emphasize acknowledgment to their friends, colleagues, and peers at Denison Consulting with a special Thank You to Michael G. Schwendeman. Michael is the Director of Research & Development for Denison Consulting and has provided significant contribution and insight to this article.

About Nestell & Associates: https://nestellassociates.com/about-us/

Learn more: https://www.denisonconsulting.com/

References: 

Al-Fawaz, K., Al-Salti, Z., & Eldabi, T. (2008, May 25–26). Critical success factors in ERP implementation: A review [Paper presentation] European and Mediterranean Conference on Information Systems. Dubai, United Arab Emirates

Al-Shamlan, H. M., & Al-Mudimigh, A. S. (2011). The Chang management strategies and processes for successful ERP implementation: A case study of MADAR. International Journal of Computer Science Issues, 8(2), 399.

Annamalai, C., & Ramayah, T. (2013). Does the organizational culture act as a moderator in Indian enterprise resource planning (ERP) projects? An empirical study. Journal of Manufacturing Technology Management, 24(4), 555–587. https://doi.org/10.1108/17410381311327404

Berić, Lolic, & Stefanovic (2018). “Evolution of ERP Systems in SMEs–Past Research, Present Findings and Future Directions.”

Denison, D. R. (1984). Bringing corporate culture to the bottom line. Organizational Dynamics, 13(2), 5–22. https://doi.org/10.1016/0090-2616(84)90015-9

Denison, D. R. (1990). Corporate culture and organizational effectiveness, John Wiley & Sons.

Denison, D. R., Haaland, S., & Goelzer, P. (2003). Corporate culture and organizational effectiveness: Is there a similar pattern around the world. Advances in Global Leadership, 3(2), 205–225. https://doi.org/10.1016/S1535-1203(02)03011-3

Denison, D. R. and A. K. Mishra (1995). “Toward a theory of organizational culture and effectiveness.” Organization science 6(2): 204-223.

Grossman, T. and J. Walsh (2004). “Avoiding the Pitfalls of Erp System Implementation.” Information Systems Management 21(2): 38-42.

Hartl, E. and T. Hess (2017). “The role of cultural values for digital transformation: Insights from a Delphi study.”

Howcroft, D., Newell, S., & Wagner, E. (2004). Understanding the contextual influences on enterprise system design, implementation, use and evaluation. The Journal of Strategic Information Systems, 13(4), 271–277. https://doi.org/10.1016/j.jsis.2004.11.010

Ifinedo, P., & Nahar, N. (2009). Interactions between contingency, organizational IT factors, and ERP success. Industrial Management & Data Systems, 109(1), 118–137. https://doi.org/10.1108/02635570910926627

Ke, W., & Wei, K. K. (2008). Organizational culture and leadership in ERP implementation. Decision Support Systems, 45(2), 208–218. https://doi.org/10.1016/j.dss.2007.02.002

Scott, J. (1999). The FoxMeyer Drugs bankruptcy: Was it a failure of ERP? AMCIS 1999 Proceedings, 80.

Warrick, D. D. (2017). “What leaders need to know about organizational culture.” Business Horizons 60(3): 395-404.

ERP Organizational Change Success: Address The Real Issues

ERP Organizational Change Success: Address The Real Issues

Address the Real IssuesERP Organizational Change Success: Address The Real Issues

by Dr. Jack G. Nestell and Dr. Justin Goldston

The Objective

Effective gap analysis is crucial to successful ERP organizational change. ERP organizational change is often impacted by inherent influences that may directly and significantly determine the outcome of the organizational change endeavor. Moreover, there may exist influences that are misunderstood, unacknowledged, or perceived incorrectly. Throughout the entire ERP organizational change endeavor, sound research suggests that it is critical to address the real and root of issues and not to be misguided by inaccurately perceived influences that may prohibit or prevent success. To do that, sometimes you must scratch below the surface. ERP organizational change success requires that an organization addresses the real influences that may have a significant impact on success versus the potential inaccurate interpretation of influences. Therefore, an organizational objective should be to 1) be cognizant and reflective of perceived influences and 2) have an approach founded in principle that helps guide gap analysis and is able to root out the real influences that may be prohibiting successful transformation.

Real Influences versus Perceived Influences

Often in ERP organizational change endeavors those issues, or influences, that you can easily observe and track often get the most attention when things go wrong, and sometimes rightfully so. For example, no one would argue just how essential the actual project plan tasks or ERP system functionality is. These are two critical aspects of any ERP organizational change project. These example influences are more concrete, tangible, easily measurable, and highly visible.  Project task execution and actual ERP functionality are no doubts critical components of success. However, properly identifying root influences requires a fair, objective, and accurate assessment. At times, the perceived influences (or one’s interpretation and understanding of influences) can be misleading, a sacrificial lamb, or scapegoat influences while the real influences go unidentified and unaddressed.  For example, the actual question would be what are the real influences that have been prohibiting project management tasks from being completed on time or properly executed? There are many reasons that go beyond project management techniques and tactics that could be prohibiting progress. And, for example, why is it exactly that the ERP functionality appears to be falling short (assuming a thorough and proper selection process). Are you sure the functionality is falling short? How to you know and prove that? The fact is, there are many possible success factors, or influences, required for a successful ERP organizational change effort. During an ERP organizational change effort, many of these influences may often remain hidden below the surface. And often, these success factors, or lack thereof, are either rooted in knowledge, motivation, and/or organizational influences.

A Proper Gap Analysis Framework is Key

Research suggests that often the reason for significant ERP organizational change challenges is that the proper influences are not understood and the approach to identify real influences is not rooted in sound principle but rather opinion and anecdotal experience only. Note that opinion and anecdotal experience may not apply well across varying organizational contexts. This helps to explain in part why each ERP organizational change project has challenges and lessons learned; each organizational context and experience is different. In practice, you do not often hear organizations consider and identify influences utilizing a model founded in sound principles and research. An example of one such model is that of the Clark and Estes (2008) Gap Analytic Conceptual Framework. This is a helpful model easily applicable to practice. Much more to come on this topic in upcoming articles in which we will elaborate further.  But as a matter of introduction, let us take a closer look at the premise behind the model. Again, the Clark and Estes framework is an example of a highly relevant and useful gap analytic approach that offers additional insight into the field, and practice, of ERP organizational change.

The Clark and Estes Gap Analysis Conceptual Framework

The goal of the Clark and Estes (2008) gap analysis conceptual framework is to utilize and apply sound performance research within an organization to create cost-beneficial performance results. Clark and Estes (2008) provide a methodological approach to appraising stakeholder performance goals and identifying gaps. Once a goal is identified, the framework forms the basis for recommendation by examining knowledge, motivation, and organizational influences that may be impacting these performance gaps (Clark & Estes, 2008).  Let us take a closer look at these knowledge, motivation, and organizational influences.

Stakeholder Knowledge Influences

During ERP organizational change, it is important to examine knowledge influences to determine if the stakeholders know how to achieve a performance objective. Thoroughly understanding stakeholder knowledge is pertinent to improving the effectiveness of ERP organizational change. Knowledge is a critical influence because the fact is that different forms of knowledge facilitate organizational performance and improvement. Stakeholders can often be unaware of their own lack of knowledge and skills deficits, and they must become aware of knowledge factors such that they may fully analyze and assess problems in order to accomplish performance goals (Clark & Estes, 2008). Four types of knowledge influences exist (Krathwohl, 2002): A) factual, B) conceptual, C) procedural, and D) metacognitive (Krathwohl, 2002). Declarative factual knowledge is knowledge about the “what” such as facts and meaning of terms (Aguinis & Kraiger, 2009).  Factual knowledge refers to the basic elements that need to be understood within a discipline such as knowledge of terminology and it is discrete, isolated content elements (Krathwohl, 2002).  Conceptual knowledge is a more complex knowledge requiring organized forms of knowledge (Krathwohl, 2002).  For example, conceptual knowledge would include the understanding of interrelationships between the wide array of influences within the larger organizational structure that enable them to function together as well as the knowledge of principles, generalizations, and theories that help explain and address those influences (Krathwohl,2002). Conceptual knowledge would include an understanding of the existence and interplay of the vast array of success factor influences. Procedural knowledge is knowing how to do something such as methods of inquiry, and criteria for using skills, algorithms, techniques, required steps, and methods (Krathwohl, 2002). Moreover, procedural knowledge describes how to do something such as the needed methods, techniques, and knowing when to use certain procedures (Krathwohl, 2002). Lastly, metacognitive knowledge is the awareness of one’s own cognition and would include strategic knowledge, contextual and conditional knowledge, and self-knowledge (Krathwohl, 2002).

Knowledge related influences facilitate organizational performance and improvement and thus play a significant role in improving the effectiveness of ERP organizational change.

Stakeholder Motivational Influences

This is often underestimated and not a well-considered ERP organizational change influence. Linder (2019) described and forwarded the notion that motivation has been defined in many ways (Kreitner, 1995; Buford, Bedeian, & Lindner, 1995; Higgins, 1994; Bedeian, 1993). Motivation can be defined as that inner desire that steers and propels people to accomplish personal and organizational goals (Linder, 2019). An individual’s choice to reflect on goal achievement, the desire to accomplish the goal, and the mental effort to accomplish the goal are examples of motivational influences (Clark & Estes, 2008). Rueda (2011) describes motivational concepts such as self-efficacy, attributions, values, and goals that can be considered when analyzing the performance gap. Organizations would benefit from the examination of influences that could enhance learning and performance using research-based principles and strategies relating to motivation theory specifically. Clark and Estes (2008) describe knowledge as what one knows and how one does things while motivation initiates and keeps one engaged. Clark and Estes (2008) describe motivation as consisting of three indexes: active choice, persistence, and mental effort. The active choice is where the intention is replaced by action, persistence is where one continues amongst distractions, and mental effort is where one works smarter and develops novel ideas and solutions (Clark & Estes, 2008). Motivation is needed because it energizes and guides behavior towards successful performance outcomes (Sansone & Harackiewicz, 2000).

Understanding stakeholder motivation can be a tool to improve stakeholder learning, development, and performance as it relates to ERP organizational change. 

Stakeholder Organizational Influences

Work processes, resources, and workplace culture are examples of organizational influences that may impact stakeholder performance (Clark & Estes, 2008). Denison (1984) states that the primary and fundamental identity of an organization is based on its organizational culture: the set of values, beliefs, and behavior patterns. Gallimore and Goldenberg (2001) state that an organization’s culture can be examined based on the notion of cultural settings and cultural models. Tangible factors such as employees, tasks, and social context are examples of cultural settings. Cultural practices and shared mental schema within an organization are considered cultural models (Gallimore & Goldenberg, 2001). Ke and Wei (2008) explain the general way in which people think and therefore behave defines the organizational culture. Krumbholz and Maiden (2000) describe how corporate culture can be divided into three layers. The outer layer is organizational (setting) values such as documented strategies, missions, and objectives (Krumbholz & Maiden, 2000). The problems and challenges that the employees verbally discuss make up the middle layer (Krumbholz & Maiden, 2000). Lastly, the implicit assumptions of the organizational life in which employees find it difficult to explain comprise the inner level of cultural models (Krumbholz & Maiden, 2000).  Corporate culture is an elaborate system of norms and values that evolve over time and is the collective binding that governs the values, ideals, and beliefs shared within the organization (Ke & Wei, 2008). Organizational culture and organizational related influences are necessary to understand because as described by Denison, Haaland, and Goelzer (2003), organizational culture characteristics, which can be measured and monitored, may have a predictable impact on the effectiveness of organizational change. Ke and Wei (2008) described that when within organizations there exist varying and mixed cultures of leadership, employees will have different ideals, perceptions, and understandings of organizational change efforts, which has a direct impact on change acceptance from the employees. Annamalai and Ramayah (2013) established that the organizational culture regulates the relationship between CSFs and assimilation success of the ERP projects. Annamalai and Ramayah (2013) further state that organizational culture must highlight the value of common goals. The phenomenon at individual, group, organization, and society levels determine the use of ERP systems (Howcroft, Newell, & Wagner, 2004). Howcroft, Newell, and Wagner (2004) further mention that being aware of and utilizing a context-aware perspective has to begin with the awareness and notion that an ERP is not just a physical but also a social, and organizational culture artifact.

Organizational culture can influence perceptions and behaviors and it is a key concept to note in terms of how organizational culture can impact change and success.

The Organization Should Constantly be Asking Three Important Questions
  1. What is the stakeholder knowledge related to the organizational goal of achieving successful ERP implementation and assimilation? ERP organizational change is a unique business event. Just as in life in general, all ERP organizational change efforts share a truism: 1) stakeholders know what they know, 2) stakeholders know what they don’t know, or 3) stakeholders don’t know what they don’t know when it comes to ERP organizational change. Assessing, understanding, and reflecting on current organizational knowledge is critical. Then, developing an effective and efficient plan for proper training, evaluation, and applying the knowledge is just as critical.
  2. What is the stakeholder motivation related to the organizational goal of achieving successful ERP implementation and assimilation? The consequences of negative motivational influences could be significant in terms of not meeting objectives but also in the loss of time, profit, and effort.
  3. What are the organizational influences related to the organizational goal of achieving successful ERP implementation and assimilation? That is, the greater the understanding of what is required for significant ERP organizational change efforts, the greater the likelihood that the organizational culture will be groomed in terms of readiness and long term establishment to support significant ERP organizational change.
Conclusion

Organizational cultures consist of multiple stakeholder groups all with disparate degrees and a wide array of ERP organizational change knowledge and motivation. These stakeholder groups also have varying degrees of impact upon, and from, organizational influences. It is not uncommon that each stakeholder group has different ideas, expectations, and definitions of success and understanding of what is required for a successful ERP organizational change. And then, when you combine that with all of the individual personalities and characters with significant degrees of ERP conceptual and functional understanding, motivational interest, ownership and commitment levels, learning styles, and varying organizational change tolerance…requires an objective approach to be able to sort out perceived from real influences most impacting your ERP organizational change success.

A deliberate approach utilizing a framework founded in principle will help ensure the accuracy of these key influences that best advocate for, or prohibit, ERP organizational change success.

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