“If you don’t know where you are going, you’ll end up someplace else.” ― Yogi Berra
Food for Thought
Definition of success, purpose, mission, and values is a critical step #1. ERP organizational change is about “people, processes, and technology”. And, before an organization develops a tactical plan, and before you execute that plan, clear communication is critical. Do all the stakeholders understand the purpose, mission, vision, and goals? How are we defining and approaching success? Most organizational leaders, project management professionals, or those that study organizational change would agree that any organizational change effort requires the below three general steps:
1) Clear vision, purpose, mission, and goals required for “success”.
2) A well understood and aligned plan that supports step #1.
3) Effective and efficient execution of step #2.
Then it would stand to reason that if step #1, understanding what “success” is, varies across organizations, then the way you plan, execute, and respond throughout the organizational change could also vary (otherwise these three steps may not be aligned). Seems logical and within reason for reflection; you change step 1, you essentially could/would change how you address step 2 and step 3. (NOTE: Step #1 could also determine how organizations respond to challenges during step #3. As the great philosopher, Mike Tyson once said, “Everyone has a plan until they get punched in the face.” Step #1 helps set the tone for when you do encounter challenges.)
An ERP Organizational Change Success Common Denominator?
Is it possible that those organizations that have realized significant ERP organizational change success have more in common in terms of definition, perspective, and approach to success versus those organizations that struggle or are not successful? Said another way, could the way in which organizations initially define success impact, or correlate to, the way in which they approach and ultimately realize success?
After all, the project mission, vision, and value should align with the tactical plan which should align with the actual execution of the plan. So, the definition and understating of success (which is a part of the project mission, vision, and value) then certainly would align with and support how you plan and then execute against the plan. The definition of success aligns with the plan which aligns with the execution which also determines how you respond. Then, perhaps it is safe to say that organizations that define mission, vision, and value success differently, would also plan, execute, and react differently throughout the ERP organizational change effort.
This then would imply that if you plan, execute, and react differently, well then, your outcome could be different. Seems to make some sense.
Therefore, examining this notion within organizations that have realized success may offer up some insight into the field of ERP organizational change.
A Word on ERP Success versus Failure
As we discussed in previous posts, Markus, Axline, Petrie, and Tanis (2000) describe two categories of ERP success: 1) project success metrics such as being on-time, on-budget, and functional delivery, and 2) business value metrics such as improved inventory management, cycle-times reduction, and time to market reduction. Information technology failure is one in which stakeholders are left dissatisfied with how the system has served their interests (Chua, 2009; Sauer, 1993). The Standish Group (1994) defines ERP failure as one in which the project was canceled, over budget, missed time delivery, and/or did not meet stated business goals. Wong, Scarbrough, Chau, and Davison (2005) describe how failure refers to ERP system downtime, not fully functional, loss of sales, lost market share, or lost competitive advantage. Wong, Scarbrough, Chau, and Davison (2005) further note that often ERP failure is identified in which the project approval phase objectives and goals have not realized, or insufficient or expected return on investment. There exist a wide range of ways in which to define, understand, approach, and communicate ERP organizational change success or failure; and this can create ambiguity, misalignment, and subjectivity.
A Word on Objective versus Subjective
The key is keeping the definition and measurement of failure, or success, as objective as possible. The organization needs to spend the time and effort to formally articulate, document, agree, communicate, and advocate for how failure, and success, will be defined and approached. Without a formal process in which failure or success is formally documented and communicated, the idea of failure or success can become quite subjective and mean many things across the stakeholder groups and their members. This is when significant organizational, and stakeholder group, misalignment can occur. Although it can be challenging to define and agree to ERP success (and end-user perception of success may be subjective), the ERP organizational change plan needs to allow for a formal, and informal, process for defining, documenting, and advocating for success. The organization then needs formal and sufficient mechanisms (build into the tactical project plan) in which to measure and discuss success.
Successful ERP Organizational Change: Common Definitions and Success
Some research would suggest that those organizations that have realized success may share common denominators in how they define, perceive, communicate and therefore approach success. There are a couple of organizational influences that may assist in explaining this phenomenon. First, successful organizations appear to have had a clear knowledge of their desired business performance advantages. Second, the organizations may be highly aware of the significant challenges to overcome in order to accomplish the desired business advantages.
As a result, how the organizations defined success include their perspective that there was no easy path to success and that significant challenges would be inherent with the ERP organizational change endeavor. Therefore, they seem to emphasize this notion in their plan and execution as well. That is, there are effective tactical actions that properly advocate for challenge and risk acceptance. Moreover, the organizational change, therefore, required an aligned mindset. Knowledge of ERP business value combined with the knowledge of significant failure rates, challenges, and risks associated with ERP organizational change, may explain the generality in which the stakeholders defined and approached success. The general definition of success included realizing business advantages and understanding that success included the ability to work through significant challenges.
As mentioned above, ERP organizational change success is often discussed in terms of two categories: (a) project success metrics such as being on time, on budget, and functional delivery; and (b) business value metrics such as improved inventory management, cycle-times reduction, and time to market reduction (Markus et al., 2000). An interesting and noteworthy finding resulting from some research is that the participants defined their primary elements of success according to the latter: business value metrics. The perception and approach to success were much less about being on time and budget (but clearly important!) as about getting the job done correctly and a strong desire to realize the known business advantages.
That is, the idea of success was more based on effective organizational change teamwork to overcome the challenges and accomplishing desired functionality that ultimately led to a competitive advantage.
A Recurring Theme
The significant challenge of ERP organizational change perhaps is a common knowledge that is inherent in the definition, understanding, and ultimate accomplishment of successful organizations. Furthermore, some research suggests that successful organizations were practical and realistic in terms of allowing some time to fully realize the benefits and value of ERP assimilation. This notion is consistent with Ghosh (2018) who notes that stakeholders should allow time before considering ERP as a failure as it takes months to years to realize the return and benefits of ERP. Perhaps as some research indicates, executive stakeholders see or focus on success not only in terms of hours, days, or dollars; successful organizations perhaps focus more on teamwork in describing their perspectives on ERP organizational change success. That is, research suggests they see and value success in terms of business value through improved business efficiencies, teamwork, improved business intelligence, improved product and service delivery, and improved customer support. Stanciu and Tinca (2013) forward the idea that ERP success refers to utilizing ERP to improve organizational operational goals. This definition appears to be consistent with that of those organizations that have realized success.
Successful organizations may emphasize and suggest that the definition of success is important to understand and communicate across the organization, because, as Markus and colleagues (2000) found, it is important to note that it is recommended that organizations adopt and agree on a definition of success and then measure and correct throughout the entire ERP organizational change life cycle to meet that definition.
Perhaps as some research suggests; executive stakeholders in promising practice organizations are consistent in how they valued, defined, perceived, approached, and communicated success.
by Dr. Jack G Nestell
Learn More: https://nestellassociates.com/
Chua, A. Y. (2009). Exhuming IT projects from their graves: An analysis of eight failure cases and their risk factors. Journal of Computer Information Systems, 49(3), 31–39.
Ghosh, R. (2018). A comprehensive study on ERP failures stressing on reluctance to change as a cause of failure. Journal of Marketing and Management, 3(1), 123.
Markus, M. L., Axline, S., Petris, D., & Tanis, C. (2000). Learning from adopters’ experiences with ERP: Problems encountered and success achieved. Journal of Information Technology, 15(4), 245–265.
Sauer, C. (1993). Why information systems fail: A case study approach. Alfred Waller.
Stanciu, V., & Tinca, A. (2013). ERP solutions between success and failure. Accounting and Management Information Systems, 12(4), 626–649.
Wong, A., Scarbrough, H., Chau, P. Y. K., & Davison, R. (2005). Critical failure factors in ERP implementation [Paper presentation]. Pacific Asia Conference on Information Systems.