Navigating ERP System Upgrades: How to Choose the Right Type of Organizational Change

You are considering an upgrade of your current ERP solution. Or maybe you feel that your current systems are beyond repair and it’s better to start fresh. Or maybe you just need additional technologies to enhance your current systems.

Whatever your ERP implementation journey might be, you need to determine how much change is right for your organization. The amount of time you have, and the size of your budget will influence how you answer this simple, but important, question.

In this blog post, we explore the three types of change regarding your ERP systems and guide you to determine which size of organizational change suits your project needs. Regardless of the type of change you choose, stakeholder involvement and open lines of communication are ingredients for a successful implementation.

Unfortunately, 70% of digital transformation efforts fail because they did not address dangers early on. Don’t let organizational intransigence, strategic misalignment, bad data, and process “lift and shift” thwart your initiatives. Developmental Change Left

Developmental Change in ERP System Upgrades

Developmental change is a pivotal starting point that propels organizations towards continuous improvement and innovation. This journey unfolds gradually over time, beginning with small-scale initiatives that build momentum, ultimately demonstrating to the workforce that organizational change is not only possible but desired.

At its core, developmental change is about identifying areas ready for improvement and enabling meaningful transformations. Whether it's streamlining recruiting processes or optimizing performance management systems, the impact of such initiatives reverberate throughout the entire company. This type of change often transcends technological upgrades, focusing instead on revamping outdated processes and fostering enhanced user engagement.

To kick-start this journey, it's crucial to engage your primary business operation stakeholders alongside select customers to unpack the challenges they are experiencing. Choose a respected executive sponsor to validate the initiative, fostering openness and honesty with the group. Once the groundwork is laid, it's time to dive deep into understanding stakeholders' needs and challenges. From outdated approval processes to user proficiency gaps, every aspect of an existing ERP system is scrutinized with a critical eye. The mantra here is simple: question everything that does not add value.

With insights gathered, it's time to prototype solutions and validate their efficacy. Piloting these solutions with a small, receptive organization allows for real-world feedback and iteration. Agility is key—be prepared to rethink and refine the design as necessary.

As the solutions evolve, so too does the need for ongoing communication and feedback. Rolling out revised solutions to broader audiences and incorporating their feedback ensures that the process remains dynamic and responsive.

Perhaps the most powerful tool in the arsenal of developmental change is storytelling. Encouraging early adopters to share their success stories about how they overcame hesitation not only inspires confidence but also fosters a culture of adoption and innovation in the ERP upgrade process.

Transitional Change During ERP System Overhauls 

Another type of change organizations go through is called transitional change. This requires a larger effort and may be the result of a merger/acquisition or an internal organizational restructuring. Initiatives of this nature impact culture, job functions, and reporting structures. Throughout your journey, providing communication and context is key. Transitional change often comes with resistance, so a robust change management plan is extremely important. Make sure to spell out the business drivers so everyone understands what is and isn’t changing.

This optimization journey, like a developmental change, doesn't always entail adopting new ERP system. Instead, it might encompass fine-tuning your existing ERP software configuration and leveraging enhancements from updated functionalities. The scope of this endeavor can be vast, involving multiple organizational facets, or it can begin with a cautious approach, targeting specific areas like recruit to hire or procure to pay processes. It's imperative that you identify stakeholders and engage business owners to determine the processes and sub-processes slated for optimization.

With a transitional change, moving from the current state to the future state is a journey that takes careful planning and user-centric strategies. Business process flows serve as guiding frameworks, helping both process owners and users visualize how work will be performed in the new paradigm versus the legacy ERP system. However, amidst this change, users often will have many questions regarding their roles and responsibilities. To alleviate their concerns, define personas and journeys to illustrate their activities, interactions, and responsibilities within the evolving landscape.

It is important to note that while job functions and responsibilities may not drastically change, how the work is being performed is evolving. This necessitates the appropriate amount of training and support to aid users in adapting to the new processes and technologies. Tailored training solutions, including video demonstrations and in-person sessions, offer opportunities for employees to familiarize themselves with the new procedures connected to the modern ERP system and provide feedback.

For groups still struggling with the transition, involving them in remediation efforts and simplifying processes as needed can help alleviate resistance and facilitate smoother adoption. By prioritizing user-centric strategies and providing robust support mechanisms, organizations can navigate business process transformations with confidence and help deliver efficiency and cost savings.

Transformational Change with ERP System Modernization 

Transformational change is a more global, comprehensive effort. It is the hardest type of change as it involves a shift in behaviors and redefining organizational functions. It often addresses migrating to a new technology landscape, reducing integrations, and redefining components of your data and how business intelligence is consumed. To truly transform, you must investigate all components of your people, process, and technology.

Begin by performing an organizational assessment to determine the change readiness of each department and business area. What enterprise resource plannings applications are they using? How are they using them, and what are their data needs? Are they performing countless reconciliations or circumventing the process to get the work done? Make sure you involve all participants in each business function to get a complete depiction of your technological and non-technological activities.

As you refine the way work is performed in your organization, you may find the need for a different kind of worker. Will you invest in upskilling your current talent pool or bring in a new, complementary worker profile to prepare for the challenges of tomorrow? You should also determine if there are opportunities for automation to create greater efficiencies and further reduce costs and headcount. Lastly, planning for service delivery teams and establishing service level agreements (SLAs) becomes imperative to support your employees and manage the integration of new technologies.

Conducting a series of business process optimization workshops is also another necessary step in your change journey. It's essential to capture the current state comprehensively, acknowledging both strengths and weaknesses, before envisioning the desired future state with your ERP upgrades. Process flow diagrams serve as invaluable tools to illustrate how work will be executed and by whom, allowing your stakeholders to visualize possible bottlenecks and the need for internal controls.

Data harmonization is another important area where transformational change can have a profound impact. As new technologies are being considered and legacy systems are being identified for decommissioning, the opportunity arises to address systemic data issues. Creating or updating your data dictionary helps to clarify your data components, code structures, and how they are used in internal and external systems. Ultimately, you will need to perform an integrations assessment and a reporting analysis to avoid downstream issues to inbound data feeds. Sound data governance will also preserve the integrity of data renovation efforts. You will need to assign owners to data elements and establish protocols for future updates.

Given the significant nature of transformational change, resistance may manifest across the organization. A strong executive sponsor is essential, but leadership alignment is equally crucial to ensure your executive teams are onboard. Articulating the project vision and strategic goals upfront, along with providing a high-level Gannt chart and quarterly milestone updates, helps garner support and understanding at all levels of the organization. No matter what size change you are considering, from moving to a new ERP software vendor to upgrading your current system, it's critical for your workforce to grasp the significance of change and understand their roles in supporting it. You must address how your stakeholders can access information and seek assistance when needed.

The Groove Helps You Navigate Your ERP Implementation Journey

The Groove’s Advisory Services can help you gauge your organizational readiness, evaluate your data infrastructure, and envision your technological landscape. With decades of experience, we specialize in guiding companies and institutions confidently through project initiation, identifying and mitigating risks from the outset. Contact The Groove to discuss your needs. Let us help you explore possibilities and guide you to achieve your objectives with a human-centered approach, a collaborative spirit, and a robust support system. Together, we can ensure your change journey gets you to your intended destination.