An IDC study found that digital transformation activities have enabled organizations to find 75-95% improvements in revenue, cost savings, customer satisfaction, operational efficiency and other business benefits, as well as reducing business risk and enabling faster time to market.
“Organizations are finding that the more they can respond and pivot their organization to handle the next crises the more control they have over their outcome,” reports IDC, adding that this all depends on having a modern, cloud-based ERP system. And a successful cloud ERP implementation depends on having a change management strategy that ensures your organization is ready to transform and adopt the new ways of working.
6 Key Steps to Organizational Readiness
1. Leadership and alignment
Organizational readiness starts at the top. Senior business leaders own the budget and the key decisions—so they must take ownership and advocate for the change, collaborating with IT to ensure the technology meets business needs.
Leadership and alignment don’t stop with the project sponsor and senior executives but must also include department managers, such as the sales director, controller or supply chain manager. They’re the ones who are truly accountable for ensuring that their people and processes work successfully with the new system.
2. Establish a shared vision
It almost goes without saying, but if you’re investing millions of dollars in a technology implementation and changing the way your business operates, your business case and vision for the project must be specific, comprehensive and clearly understood:
- What are your goals?
- What is the expected impact and ROI?
- How will you measure success?
3. PMO with C-level support
To be successful, your people, processes and systems need to be in sync. Establishing a Program or Project Management Office (PMO) at the outset enables you to manage the entire engagement, aligning integrated initiatives and providing the required governance and rigor as well as tools and templates.
4. Organizational design
Implementing a new business technology system such as an ERP means implementing changes in how work gets done. That, in turn, triggers changes in organizational roles, responsibilities and job descriptions as well as performance goals and management.
In many cases, you’re actually creating or eliminating certain organizational functions, because you’re automating tasks and removing redundancies. For example, in an organization processing and receiving customer product returns, you won’t need people to reconcile data on spreadsheets with product inventory anymore, but you do need them to work in a new cloud-based system that automates returns and inventory management. Instead of an onerous process requiring a couple of dozen representatives, you might need significantly fewer people processing exceptions now.
5. Readiness scenarios and support planning
Whenever a large ERP implementation goes live, it’s inevitable that issues will arise. Proactively planning for typical scenarios makes it possible to troubleshoot potential incidents before they happen. For example, consider your current processes for activities such as transportation management: Let’s say you have 47 shipping containers on a particular ship. Instead of docking in the planned port, there’s an emergency that forces them to dock somewhere else.
- How would you most efficiently route these containers to their end-point destination?
- How would you process this new ship-to location in the new system?
- How would you process any new import/export requirements?
- What does the system automate now that you previously used to manually calculate and process?
Working through this type of readiness scenario prepares your team for what they will need to do differently, which can then be incorporated into training and post-implementation support.
6. Internal resource planning
It’s easy to underestimate the level of internal resources you’ll need to prepare for and implement a new ERP system. Although system integrators and consultants play important roles, this type of transformation requires deep, organization-specific knowledge that can only be provided by your people.
It’s important to be realistic and plan for the commitment of time and effort that will be required to capture and validate business requirements, test the system and new processes, train impacted employees, and provide support after system “go-live.” You might also consider backfilling some roles for the duration of the project to free up critical SME capacity.
Accelerating Cloud ERP Transformation
Organizational readiness is one of several key strategies to effectively manage the change involved in a major transformation initiative such as cloud ERP. RGP’s Return on Change™ Framework provides a proven approach to successfully implement and realize the benefits of transformation. Our clients also benefit from our strategic partnership with Kotter, which helps businesses drive and sustain change through 90-day results accelerators.