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Management Change in Organisation. Areas of ERP Problems. The findings from a study of 164 users from 62 Fortune – 500 companies using ERP systems revealed that the following are crucial areas of ERP problems: 62% involve people issues 16% involve business problem issues 12% involve IT issues.

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Management Change in Organisation

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areas of erp problems
Areas of ERP Problems
  • The findings from a study of 164 users from 62 Fortune – 500 companies using ERP systems revealed that the following are crucial areas of ERP problems:
    • 62% involve people issues
    • 16% involve business problem issues
    • 12% involve IT issues
people factor
People factor
  • A new ERP systems incorporates changes to technology, processes and people.
  • Of these, the factor that have great variability is people.
  • The new system may require that people learn new skills, work in different functions, or face
people factor1
People factor
  • For example, a typist who did simple data entry work before ERP will face a whole new world after ERP.
  • The contents of his/her computer screen, now holding customer data relevant to many departments, can impact numerous issues companywide (such as customer credit rating, payment history, shipping arrangement, etc.)
people factor2
People factor
  • The worker now will become a business person.
  • Human are fickle creatures, they do not like to change and, when forced to adopt new behaviours, they can become quite unpredictable.
the purpose of change management
The Purpose of Change Management
  • Employee may be reluctant to the new system.
  • Change management program focuses on ensuring that employees are not becoming the hindrance in the operation of new ERP system.
  • Also remove any resistance to the new ERP system.
change management
Change Management
  • So, companies put a high priority in changing the mindset of employees toward the new deployed ERP system.
  • This is an important issue to be addressed and worked out to ensure that the ERP implementation does not fail.
  • One of the major things that enforce attitude of people toward new ERP system is training.
four stages of resistance
Four Stages of Resistance
  • Changing the ways things are done or processes can be easily or hardly acceptable thing, unless the people were satisfied with the previous processes the new process will be welcome.
  • The resistance may come out in four stages.
    • Users may go into a state of denial when discovering that absolute changes in work practices will be required.
four stages of resistance1
Four Stages of Resistance
    • The they will go from denial to anger after realising that they cannot return to the old system.
    • Then to bargaining stage for the hope of holding on some of the old practice while bringing new practice.
    • Despair is the final stage in which workers have no option except go on with the new system with new practices.
  • Employees buy-in depends on clear communication from the beginning, regarding the potential outcomes for each individual, each department, and a company as a whole.
change management training
Change Management…Training
  • Employees cannot be expected to give their best while fearing the unknown system.
  • Training will help overcome much of the fear, uncertainty and doubt (“FDU”) that accompany the change to the new system.
change management training1
Change Management…Training
  • A pro-integration climate should be created, in which early adaptors and contributing users are rewarded for their participation.
  • All employees should be motivated to become more systems-aware, more data-aware.
  • User buy-in is main predictor of success for an ERP project.
change management training2
Change Management…Training
  • Through training, the company can go far in managing user expectations and reducing the natural resistance.
  • A good change management program will promote user ownership, which is essential to the success of an ERP effort.