The Challenge of ERP Organizational Change Success
Clearly, ERP organizational change success does exist. You may hear of ERP projects that were “nearly perfect” for smaller organizations and small-scale projects. You may hear of projects that were significantly challenged but over time would then be considered a success. And, you may hear about ERP organizational change efforts that struggle and then fail completely. There is a reason that ERP practitioners, researchers, and vendors are spending a great deal of time, money, and effort on the challenge of successful ERP organizational change. Practitioners, researchers, and vendors are looking into people, processes, and technology aspects in an effort to minimize the risks, challenges, and potential for ERP failure. One of the key influences to success is certainly ERP organizational learning.
Understanding the Significance of ERP Organizational Change
Why is this? Because ERP organizational change can be a significantly challenging endeavor, and failure is a real issue.
It is important to solve the problem of high ERP organizational change failure rates for a variety of reasons. During an ERP implementation, business interruptions and not meeting intended objectives is a common organizational failure (Hakkinen & Hilmola, 2008). Due to the systems and implementation complexities, 33% of ERP projects are catastrophic failures (Standish Group, 2010). ERP organizational change often incurs significant time and cost overruns, incurring millions of dollars in lost investment and/or abandoned altogether (Basoglu, Daim, & Kerimoglu, 2007). It is not only the costs of an ERP failure, but it’s also the loss of the return on investment and benefits that a successful ERP can bring to an organization. Shao, Feng, and Hu (2017) point out that current literature suggests that very few companies actually realize the expected benefits of their ERP solution. Research also suggests that a very high percentage of ERP organizational change efforts did not achieve their estimated benefits. ERP assimilation failure is a problem directly related to complex and dynamic factors.
Seeking Solutions through Research and ERP Organizational Learning
Due to the significant demand to address the problem of ERP organizational change failure, over the last couple of decades, in particular, more study is being done among practitioners and in academic research looking for success factors. Used generally, success factors refer to any and all factors, models, processes, or constructs having been identified in the literature, and in practice, as potentially significant facilitators of effective ERP assimilation. As proposed “successful” ERP implementation factor research has evolved, research is considered the non-technical side of ERP organizational change in an effort to understand how leadership, organizational culture, team performance, and measurement, diversity, and many other factors might be important (Shao, Feng, & Liu, 2012; Ke & We, 2008; Yeh & Chou, 2003; Vincent, Soni, & Venkat, 2018). Stratman (2018) notes that because of ERP’s significant impact on organizational performance, the need for scientific study and literature pertaining to ERP is highly relevant to organizational strategy and success. A common theme of ERP research is that of effective and efficient ERP organizational learning (i.e. Learning and Development). ERP Organizational Learning Is More Than a Concept.
A Call for Shared Learning and Practical Application
The problem is real. The solution lies in shared learning and then applying to practice. Follow Nestell and Associates’ blogs and “The ERP Organizational Change Journal” podcast to learn much more.
Learn more about organizational Learning: “Turning Research Into Results: A Guide to Selecting the Right Performance Solutions“.