I have recently been working with a client that has been trying to get results after installing a new ERP. The technical installation went successfully and there were few issues to work out. However, nine months later they are still suffering from inaccurate data and technology reversion. So if the ERP works correctly and the system was properly specified for the application, why the financial discrepancies?
It boils down to people. I had a conversation with the President of the company and he said that some people just didn’t embrace the change and that forcing people onto a new system wasn’t going well. Ahah! Forcing. That was the clue that led me to ask more questions. The basic response was that the users were never really brought into the process and now the company was paying for it. Literally.
The project was budgeted to cost around $1.5 million. Really not much when you consider what some organizations pay for an ERP. However, financial losses within the first nine months were projected around that same amount and the capital investment is up to $3.2 million. There is still yet another phase of implementation that needs to be completed before the implementation is even considered complete.
So with a total cost approaching $7 million, don’t you think it would have been worth another few hundred thousand to add some training and headcount for allowing the users to become more familiar with the software? They should have been asked their opinions up front on the best ways to implement for their locations and how to structure their processes to better fit the new system. These things weren’t considered to be part of the ERP implementation.
So what are the lessons learned?
- Invest a little more money to reduce the cost and aggravation that comes with change.
- Let people be part of the process rather than victims of it.
- Give yourself twice as much time as you think you will need because people are slow to change.
- Understand that change is hard and takes time and persuasion.
- Create local champions to help cheer on the progress of the changes.
- Lead the change by supporting it, not forcing it.