Stakeholder dynamics in ERP organizational change.
Article Contents
- What does “ERP Stakeholders” Mean?
- Understanding the Stakeholder Dynamics of ERP Organizational Change
- Identifying the Underlying Factors of Failed ERP Organizational Change
- Managing Stakeholder Diversity for Successful ERP Organizational Change
- Leveraging Stakeholder Theory for Effective Communication Strategies
- Embracing Stakeholder Theory for Enhanced Organizational Communication
What Does “ERP Stakeholders” Mean?
“ERP stakeholders” refers to individuals or groups who have a vested interest or involvement in an Enterprise Resource Planning (ERP) system, and its implementation, within an organization. ERP stakeholders can include various parties such as the Executive team, top management, employees, IT Department, customers and suppliers, investors and shareholders, regulatory bodies, consultants and vendors, and business partners. Each of these stakeholders may have different expectations, concerns, and requirements related to the ERP system, and effective communication and engagement with these parties are essential for successful ERP implementation and ongoing management.
Understanding the Stakeholder Dynamics of ERP Organizational Change
Participating in a 100% perfect portfolio ERP organizational change effort per unanimous consensus from all PE portfolio stakeholders is rare. The reality is that in the merger and acquisition business, often, you can encounter a portfolio where significant unknowns surface as processes are changed, turnover increases, and cultural shifts take place under the new leadership and ownership structures. Effectively communicating to all stakeholders how ERP organizational change is intended to drive positive outcomes and results is key.
Pinpointing Key Issues in Stakeholder Relationships.
Identifying the Underlying Factors of Failed ERP Organizational Change
Large-scale ERP organizational change doesn’t fail because you have a hard drive failure, or your business requirements are not perfectly known before system selection, or because your project management team doesn’t nail every aspect of “textbook project management” strategy. That fact is, failed ERP organizational change influences can be much more ingrained in the fabric of the organizational culture (which is more abstract, intangible, and harder to observe and manage). What if stakeholder relationships have anything to do with success? In fact, what if it were a significant factor in your organization’s success? Wouldn’t it be worth contemplating and giving some reflection on this potential success factor?
Managing Stakeholder Diversity for Successful ERP Organizational Change
Significant diversity amongst stakeholder groups can contribute to significant misunderstandings and misalignment. A key point is that within any given organizational change effort, stakeholder interactions deserve careful understanding and consideration in an effort to provide communication (and change) corrections that are in the best interest of all the stakeholders and therefore the organizational change effort.
Leveraging Stakeholder Theory for Effective Communication Strategies
If one could redesign and optimize stakeholder communication in order to have the greatest effect on change, what leadership team would not consider that? Many levels of stakeholders exist in the context of private equity owned portfolio companies. Often, the realities, expectations, priorities, and organizational diversity (in its many forms which include knowledge, value, and motivational) can be quite disparate. There are diverse stakeholders both within and without of the portfolio. Organizations have independent relationships amongst the recognized stakeholder groups. This is important to understand especially for political relationships. Organizational structure is one major factor that can impact current communications and relationships amongst stakeholders. And 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. Influence upon and among these different strata of stakeholders comes in many ways but consistent formal and informal bi-directional communication is crucial.
Embracing Stakeholder Theory for Enhanced Organizational Communication
One last note, if you reflect on this point and agree to the significance and value of stakeholder group relationships, then you are already considering and addressing “Stakeholder Theory” whether you realize it or not. If one is to truly improve organizational communication and therefore improve organizational change then stakeholder theory is critical to understand. Stakeholder theory attempts to explain how organizations understand stakeholder groups and then strategically determine action most effective and manage relationships between those stakeholder groups (Lewis, 2011). Relationships within PE portfolio companies are very dependent upon each other. Understanding existing relationships with stakeholders, understating how organizational actions shape stakeholder relationships, and understanding the obligations of managers to various stakeholders is crucial (Lewis, 2011). Incorporating this notion in your organization’s ERP organizational change effort is of utmost importance because of the dynamics within and between stakeholder groups. That is, stakeholders are constantly accessing the degree to which their interests are competitive or complementary with other stakeholders (Lewis, 2011). Organizational leadership would benefit from acting as mediators between stakeholder groups and encouraging and helping relationships between stakeholder groups.
Dr. Jack G. Nestell
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Article References
APA Citation: Lewis, L. K. (2011). Organizational Change: Creating Change Through Strategic Communication (Vol. 4). Hoboken, NJ: John Wiley & Sons.
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