What is ERP Organizational Change Research? And, Why Should You Care?

What is ERP Organizational Change Research? And, Why Should You Care?

what is ERP organizational change researchERP and organizational change researchers have a passion to bring value to practitioners that are based on sound research and principle. The field and practice of ERP organizational change would benefit from the reflection and application of this insightful work. When it comes to ERP organizational change research, if you are an organization or an ERP practitioner, you should care about what this great current and past research are telling us.

What is ERP organizational change?

Sometimes remaining competitive and healthy requires significant organizational change. And one of those change agents is Enterprise Resource Planning, or ERP, systems that act as a tool to drive improvements and to create or maintain a competitive advantage. ERP organizational change is the act of leveraging ERP systems in an effort to realize improved business outcomes.

In order to fully realize the benefits and value that ERP systems have to offer, however, it often requires the right ERP solution, significant organizational resources, and tremendous effort and time. The process of aligning people, processes, and technology in an effective and efficient way in which to fully realize ERP success and assimilation is called ERP organizational change. However, ERP organizational change has inherent and potentially significant business challenges and risks.

What is ERP organizational change research?

ERP organizational change is often a tremendous organizational effort. ERP organizational change is often a time of high stress, significant stakeholder frustrations, numerous challenges, inherent risks, business interruptions, and even failure. But why is this the case? Does it have to be this way? How can we, as practitioners, positively impact and improve ERP organizational change? These are precisely the questions that researchers in the field of ERP organizational change seek to address. Being able to answer these questions and then applying the research insight will allow practitioners to bring the greatest value to organizations and to contribute to the ERP organizational change field.

ERP assimilation challenges and failures are a significant problem directly related to many complex and dynamic influences.  ERP organizational change research considers all aspects of ERP organizational change influences including organizational, process, and technology-related factors. ERP organizational change research studies “success models” and “success factors” in order to offer up possible new perspectives and insight in which to continue to improve the value of ERP, understand how to better utilize ERP, and to better understand how to reduce the challenges and risks associated with large scale ERP implementations.

What is ERP organizational change research telling us?

The general review of literature and research suggests that understanding and awareness of this work and success factors is an important organizational process. Al-Mashari (2003) described the need for an urgent research agenda that addresses the issues and challenges inherent in ERP adoption. The ERP organizational change literature presents a common theme in which research suggests that organizations that become aware of, implement, and put the appropriate emphasize on the vast array of critical success factors will be better prepared and positioned with the organizational skills needed to increase the likelihood of ERP assimilation and meeting the desired organizational goals (Sawah, Tharwat, & Ramsy, 2013; Moon, 2007; Jafari, Osman, Yusuf, & Tang, 2006). Research notes that there is a lack of routine and quality reflection in practice (Ferry & Ross-Gordon, 1998; Rodgers, 2002). ERP research continues in 2020 simply because the need for this research continues. The need for this research is actually driven by demand.

The evolution of ERP research continues to look at the problem from many different fields of study, models, and perspectives (Basoglu, Daim, & Kerimoglu 2007). The collective benefits, knowledge, and awareness of this work could lead to improved organizational ERP performance and success. Scholars and practitioners continue the search to find common denominators in considering all possible influences upon ERP organizational change success.

Why should anyone care about ERP organizational change research?

Because ERP organizational change research seeks to do one primary and fundamental thing: make a tactical difference in the success of your ERP organizational change effort.

Successful ERP assimilation matters because the evidence demonstrates that ERP failure is extremely costly to U.S. organizations (Wailgum, 2009; Osterlind, 2000; Shao, Feng, & Hu, 2017; Jyh-Fu & Nicolas, 2013; Ike & Madsen, 2005).  The risk to the organization’s ERP assimilation goal if success is not achieved could lead to a loss in production, a decrease of product quality, loss of customers, loss of sales, and/or significant waste in resources, time, money, and effort.  And, worst yet, plant closure, bankruptcy (Scott, 1999) and lawsuits (Grossman, 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 (Grossman & Walsh, 2004).

ERP implementations are abandoned all together as well as incur significant time and cost overruns incurring millions of dollars in lost investment (Basoglu, Daim, & Kerimoglu, 2007). It is not only the costs of an ERP failure, but it’s also the loss of the ROI and benefits that a successful ERP can bring to an organization.

The goal of ERP organizational change research

Much great work exists in the field of ERP organizational change specifically (and organizational change in general) in which the goal is to provide additional objective data and insight that is founded in principle. This additional insight may be helpful to organizations toward meeting the goal of successful ERP assimilation via improved ERP organizational change performance. Even though many of the challenges are known, failure rates are not improving and ERP implementations remain problematic (Scott, 2018). The primary goal and value of ERP organizational change research is research based ERP practice .

Learn more:

Friend and colleague Dr. Justin Lee Goldston is an ERP Organizational Change Expert, Professor, Author, and TEDx Speaker. His book is a recommended read: “Critical Success Factors in Enterprise Resource Planning Implementation in U.S. Manufacturinghttps://www.amazon.com/Critical-Enterprise-Resource-Implementation-Manufacturing/dp/1948149095

 

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Organizational Communication Optimization and ERP Success: PART V

Organizational Communication Optimization and ERP Success: PART V

Organizational Communication Optimization and ERP Success:Organizational communication and diversity

ERP organizational change consists of many disparate ideas of expectations, organizational change realities, and significant diversity in terms of knowledge, value, and motivation. In a effort to ensure alignment, communication optimization between stakeholders is critical. This is further supported by Lewis (2007) in which it is noted that interactions, good or bad, among stakeholder’s are influenced by assessments of each other and stakeholders concerns about change. Significant diversity among stakeholders groups can contribute to significant misunderstandings and misalignment.

Organizational communication structure needs to be fluid

A key point is that within any given organizational change communication model, stakeholder interactions deserve careful understanding and consideration. This improved understanding is in an effort to provide communication corrections that are in the best interest of all the stakeholders. That is, communication structures, formal or informal, often need to be adjusted in order to create an organizational environment most conducive to addressing misalignment.

A key: effectively communicate the positive outcomes 

One actionable item as noted in Olding (2013) is to be mindful that effective stakeholder communication is bottom up, top down, and middle out. Therefore, every ERP organizational change plan needs to address, allow for, and facilitate, direct stakeholder group communication at all levels.  Through an ERP organizational change lifecyle, there must be a focus on employing multi-directional communications. In communicating change it is extremely important to reflect on two points; fear of the unknown and uncertainty and lack of choice (Denning, 2005). In the merger and acquisition business, often you can encounter a business where there are lots of unknowns due to the struggling nature of a business, new ownership, rapid business growth, or significant changes in business processes. Effectively communicating how the change is intended to drive positive outcome and results is key.

A tactical tip

Communication optimization happens in many ways both formal and informal. Sharing a consistent message but tailoring that message delivery for each stakeholder group is effective. That is, speak the language of that group. Tell the group the value of change in terms of what matters to them.

Here’s an interesting video of Jonathan Rosenberg is former SVP of Products at Google talking about communication: https://youtu.be/P1T-1FqUBVY

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Organizational Communication Optimization and ERP Success: PART IV

Organizational Communication Optimization and ERP Success: PART IV

Organizational Communication Optimization and ERP Success:Communication optimization: Why does research matter to ERP practitioners? 

Research has a great deal to offer ERP practitioners when it comes to organizational communication optimization. Some industries, trades, and practices leverage applied research more than others. We all know that there are successful ERP projects, of course. We know that sometimes this success can also come with a higher than needed cost in terms of the organizational resources of time, money, and effort.  We also know from objective sound research that in our trade of ERP organizational change there can be many challenges, failures, and potential risks. As in many other trades, ERP organizational change practitioners would benefit from leveraging organizational learning, case study, and applied research.  As critical as it is, experience is not the only tool that creates future success. Experience can vary greatly and be significantly impacted by organizational context, time, and outside influences. However, sound approaches and models based on proven principle apply across context.  In addition to experience, applied research, case study, sound principle, and sharing are significant tools for any organization. This perpetual learning is a competitive advantage and valuable asset for any organization or ERP change agent.

Principle needs to support practice

It is not only a necessity to understand and provide practical insights, tangible tips, and best practices but it is also important as practitioners that these practical insights, tangible tips, and best practices are based on approaches and models established in sound principle. If not, they are bound to fail and may not apply across organizational contexts. ERP organizational change needs to be approached in meaningful ways. That is, as in any trade or practice (especially organizational change) an approach not grounded and legitimized in sound principle is likely to struggle if not fail.  This is why when it comes to ERP organizational change, the practical approach needs to be founded in principle.

A practical model for ERP organizational change 

As discussed in our previous post, we consider the Kotter’s eight-step model (by Dr. John Kotter) providing great insight into the critical components to be considered for communication optimization. Significant variance in expectations, realities, and organizational diversity is a major contribution to organizational disconnects that would be addressed with more effective communication. And we would layer in, and emphasize, the idea from Lewis (2007) that organizations need to minimize negative politics. I would include addressing politics under Kotter’s “corporate culture” bucket. Politics can, in part, be addressed via optimized communication. Organizational stakeholder dynamics can be quite complex making effective organizational communication a key to any organizational change model and process. Being able to effectively communicate to and among each stakeholder strata as well as building effective communication and change within your organization via effective stakeholder communication is critical. As Lewis (2011) states, our connections and identities with stakeholder groups may have significant influence on how an employee views any given change initiative and whether or not that employee will support the change.  Lewis (2005) further explains that individual connections and influences have a profound influence on how any individual reacts to supporting a change effort. In other words, effective communication with and throughout all stakeholder groups can help minimize the impact of individuals reacting to change more as a “monkey see monkey do” response instead of through a clear understanding of the vision, value, and purpose of the change. The reality is that sometimes politics is a major factor. This notion is further highlighted by Hogan (2010) who forwards the work of Skinner (1939), Watson (1913), Barker (1968) by suggesting that most behavior was not determined “by individual-specific stimulus-response patterns but was instead guided by the norms and goals of specific settings”. It is important to recognize that identification with a specific group of stakeholders (and maybe politics) can influence an employee decision to support or resist a change.

Association with a stakeholder group and salience by default are two important notions to be mindful of in terms of  organizational communication optimization to all individuals in terms of purpose, value, and mission.

Additional resource and highly recommend for ERP change practitioners wanting to learn more about organizational communication optimization. “Organizational change: Creating change through strategic communication”, Laurie Lewis: https://onlinelibrary.wiley.com/doi/book/10.1002/9781444340372

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Organizational Communication Optimization and ERP Success: PART III

Organizational Communication Optimization and ERP Success: PART III

organizational communication optimization part 3Improving organizational communication via experience, sound evidence, and principle: 

All would agree that organizational communication optimization is crucial. Generally speaking as career ERP practitioners and on behalf of our field, through years of hard work and being “in the trenches”  there is a great deal of anecdotal experience, perspective, skill, and maybe a little art that is brought to our trade. This collective set of knowledge is invaluable. But what we also know through research is that perhaps bringing the application of sound proven principle to our trade is also a significant value.

Rousseau (2006) made a great statement on this point:  “Evidence-based management means translating principles based on best evidence into organizational practices. Through evidence-based management, practicing managers develop into experts who make organizational decisions informed by social science and organizational research—part of the zeitgeist moving professional decisions away from personal preference and unsystematic experience toward those based on the best available scientific evidence.” 

Carefully consider organizational communication alignment: 

Organizational communication is undeniably critical to any organizational change effort. But yet, not every organizational communication structure is conducive to successful ERP organizational change. During an ERP organizational change effort, the organization’s current communication channels, behaviors, patterns, and customs, including the stakeholder model and dynamics should be carefully considered. Formal communications should be consistent, frequent, and intentional.

Allow us to introduce you to the Kotter Eight-Step model: 

The Kotter Eight-Step model (by Dr. John Kotter) is one tool or option that could be most appropriate in addressing organizational communication gaps. This model articulates and emphasizes more some of the incredibly important factors behind successful change. Kotter’s Eight-Step model places great emphasis on the following concepts;  establish a sense of urgency, form a guiding coalition, create a vision, communicate the vision, empower others to act, consolidate improvements and produce more change, and institutionalize new approaches through culture. Kotter’s model is more focused on the importance of a transformational leadership style as well as and building and integrating new approaches within organizational culture. The Kotter model emphasizes the points of effective daily communication, effective communication, continuous effort, and adjustments that promote effective alignment and change. The eight-step model also emphasizes leadership because organizational leaders need to continue to support and endorse the change through communication optimization. Organizational communication optimization is a significant concept throughout the model.

Kotter Eight-Step model is a great model to learn from, reflect upon, and apply to ERP organizational change. We will be discussing more on this model in future posts. In the meantime, learn more here: https://www.kotterinc.com/8-steps-process-for-leading-change/

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Organizational Communication Optimization and ERP Success: PART II

Organizational Communication Optimization and ERP Success: PART II

organizational communication optimization part 2Value of objective measurement via communication optimization:

Communication optimization is king. The objective standard to measure a successful ERP implementation is determined and benchmarked by clearly identifying key performance indicators (KPIs) prior to and after implementation go-live. Clearly identified, communicated, measured, and monitored KPIs help provide the organization with “proof in the pudding” that the organizational outcomes are being met. This process to determine objective and thorough standards of measurement requires 1) an optimized and formal communication process and 2) adequate and appropriate stakeholder participation.  Organizations should seek to achieve successful ERP organizational change with success being demonstrated by meeting specific and agreed upon corporate outcomes and results. Optimized, formal, and adequate stakeholder communication ensures alignment of outcomes and desired results. This is a critical first step in ERP organizational change as the appropriate goals and objectives should be benchmarked before, during, and after ERP organizational change.

Non-value of subjective and speculative measurement: 

The reality is also that too often in ERP organizational change, the “standard” used to determine as well as measure the desired outcomes can be subjective, speculative, and based on the perspective of stakeholders. This issue then is that without optimized and formal communication, success can now mean many different things to many different people. There are multiple levels of stakeholders in private equity-owned portfolios that include for instance: investors, PE firm, executive team, subject matter experts/implementation team (internal and external), middle management, and workforce team. Influence upon and among these different strata of stakeholders comes in many ways. The relationships and roles of each level are important to understand because it helps explain the challenges of organizational change as well as organizational communication. As Lewis (2011) states, the challenge is that goals are likely to be held differently by different stakeholders and that goals within stakeholder groups are dynamic and can change over time. This provides a challenge in organizational change and communication because stakeholders are essentially able to rewrite history and also persuade themselves, and others, that the real goals (the current goals) existed from the onset of the project (Lewis, 2011). This can be a significant challenge.

Tactical action: 

Research suggests that all too often, the process of determining objective measurement is given little value if it is measured at all. In addition, research shows that a lack of stakeholder communication leads to inadequate goal setting and measurement. Organizational goals and expected outcomes need to be set and established by a steering committee team consisting of an adequate representation of each stakeholder group. Through effective communication, this cross selection of stakeholders helps to manage and address stakeholder politics, ensure monitoring and feedback of appropriate and desired outcomes, acts as a coordination apparatus to resolve stakeholder group differences and can assist in addressing any disparities in diversity (knowledge, value, purpose, motivation, skill, experience) between stakeholder groups. Fui‐Hoon, Lee‐Shang, and Kuang (2001) state that “Because ERP systems are about integrating different business functions, interdepartmental communication and collaboration within the project team was found to be the core process for project progress. Presence and attitudes of the surrounding stakeholders, ie top management, project management, project champion, and software vendor, were identified as the root causes driving performance of this core process”.

 

The value of communication optimization is well understood. The key is to integrate sound communication practice into an ERP organizational change project plan. It is critical that ERP organizational change plans include a formal organizational communication method for ensuring that the strategic business goals and metrics are appropriate. And, that these metrics are used to further drive communication, progress, and action within every stakeholder group of the organization.

Learn more:

Here is an interesting link by Matthew Koschmann “Part 1 of 4: What is Organizational Communication?”. a professor in the Department of Communication at the University of Colorado Boulder. The purpose is to explore the topic of collaboration and explain a constitutive communication approach to enhance our understanding of collaboration: https://youtu.be/iN_A7keXtVg

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Organizational Communication Optimization and ERP Success: PART I

Organizational Communication Optimization and ERP Success: PART I

organizational communication optimization part 1Value of organizational communication concepts and proven principles:

One thing is for certain, and that is the value of organizational communication throughout ERP organizational change. At every level, the vertical and horizontal communication across the organization is of utmost importance.  Many levels of stakeholders exist within organizations.  Often, the realities, expectations, priorities, and organizational diversity can be quite disparate. Organizational diversity comes in many forms which include knowledge, value, skills, political, positional, and motivational. Often each individual stakeholder group takes on a common position towards the organizational change. However, this disparity gap can be bridged with the effective application of communication concepts and proven principles.

Value of understanding and addressing stakeholder diversity: 

Lewis (2011) states that organizations often have diverse stakeholders both within and without of the organization. Organizations also have independent relationships amongst the recognized stakeholder groups (Lewis, 2011). Organizational structure can have a significant impact on current communications and relationships amongst stakeholders. Often, some of these stakeholders (as groups or individuals) may be thought of as less relevant or important in the objective, purpose, and assessment of the change initiative. This perspective and approach create communication gaps and may create further disconnects in terms of the value, knowledge, motivational diversity gap. As Lewis (2011) states, the stakeholder groups clearly understand and recognize the position, leverage, and power of each other. Moreover, they also assess the degree to which their stakes are competitive or complementary with other stakeholders (Lewis, 2011). This is a key notion to understand if one is contemplating an effective communication strategy.

Value of understanding the stakeholder disparity  gap: 

First, research suggests that often stakeholders have an inadequate understating as to the true challenges of ERP organizational change. A key to optimizing stakeholder communication lies in not over-promising and telling organizational stakeholders (at any level) only what they want to hear. Objective, honest, realistic, and sometimes difficult conversations are a requirement of every ERP organizational change project. Second, your ERP organizational change plan needs to take steps to understand the dynamics between stakeholder groups. What are the influences creating these dynamics and various positions? Are significant varying perspectives due to formal training, experience, the value of the initiative, perhaps politically motivated, or some other factor? Third, once these potentially significant influences are identified, what do you do about it? How do address, monitor, measure, and communicate the closing of these gaps? (More to come on these three points specifically and how this can be accomplished).

Moral of the story: 

Stakeholder disparity can have a significant impact on ERP organizational change. The key lies in understating this fact, understanding the underlying influences, and implementing action to addressing and closing any disparity gaps as much as possible. The underlying tool in which to accomplish this lies in optimized communication. If what Lewis (2011) states is true (which it is) in that stakeholders assess the degree to which their stakes are competitive or complementary with other stakeholders then optimized organizational communication truly is king. And then, reasoning tells us that ERP organizational change plans need concrete actions that can be taken to address this potential and highly influential gap.

Don’t cut your ERP organizational change effort short. Be cognizant of the true ERP success factors and build intentional strategy into your ERP organization change plan in order to account for these true realities of any ERP project.

 

A good resource to learn more on Organizational Communication by Dr. Alex Lyon:

https://youtu.be/Fcfm0vhRI0o

 

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