Is your organization resilient enough for an ERP project?

Is your organization resilient enough for an ERP project?

ERP projects are very complex. Implementing new hardware and software is not that difficult, but the transition from the old way of working to the new way can certainly pose some challenges. Being resilient, or dealing well with the unexpected, is the motto. How can your organization become resilient? 5 factors.

We generally like it when trains run on time, as it means we will know exactly when we will be arriving where. For one, it helps us schedule appointments. When we find out about an unexpected delay, however, our mood will generally suffer. The journey will take longer, we might have to transfer, and we will have to get in touch with the people who are expecting our punctual arrival. Dealing with and responding to those unexpected events can really sap our energy.

We humans love it when things are predictable, because it allows us to make plans and feel in control. Naturally, the same applies to major projects.

Projects are certainly no exception. ERP projects in particular can be very costly and implementing a new ERP system can require a lot of effort from the organization itself. As such, these projects can entail significant risks. Unfortunately, ERP projects are very complex. Implementing new hardware and software is not that difficult, but the transition from the old way of working to the new way can certainly pose some challenges. There are many factors at play here, such as people’s attitudes, resistance to change, the degree to which the current business processes are interwoven with the old systems, technology, culture, etc. Because this makes the implementation process tremendously difficult, we want something secure, something we can cling to.

We want to know the timetable for achieving our goal. We do this by drawing up plans and schedules, involving experts and making sure that the entire organization is aware of the importance of the transition.

Unexpected issues in an ERP implementation project

Unfortunately, ERP implementation projects are so complex that we can guarantee that there will always be unexpected developments, without exception. These issues may create problems, but they can also generate opportunities. Scientific studies have shown that regardless of how well such processes are planned (generally based on experience data), no matter how good the experts are, and despite the involvement of the entire organization, unexpected developments will occur. Take external influences, for instance, such as a merger or acquisition. Equally, you may develop more insight into the opportunities offered by the new system and learn how your organization can optimize its use of the system. All of this will lead to unexpected developments. They are unexpected because organizations will not be able to determine what the exact consequences are of the implementation until the project is up and running. Only then will it be possible to delve into details and make decisions.

New applications thanks to ERP

Unexpected developments are certainly not always problems: more in-depth insight into the possibilities offered by an ERP system, for instance, will allow an organization to identify new benefits and applications. This is also something that happens frequently. In this case, insights from the project generate new business cases. Regardless of whether the project yields new problems or opportunities, though, the plans and expectations that were drawn up in advance to ensure that implementation would run smoothly will no longer be accurate. You could look at it this way: the project has stopped running in line with the timetable, which is generally a very unpleasant occurrence. If the project manager is a good controller, they will try to circumvent or even hide the problems, but with them also the new opportunities. After all, their success hinges on delivering the project on time, within budget and within specification. In other cases, the organization itself may cling firmly to the initial planning and specifications. After all, when uncertainty arises in an organization, it is natural for people to seek to remedy the uncertainty as quickly as possible by drawing up a new plan so that they can stick to a new timetable. But this also means that the potential benefits (new business opportunities) of the system cannot be taken advantage of, and sound problem resolution is made harder as well.

Respond quickly and adequately to ERP implementations

I believe that organizations that decide to implement an ERP system should have one important base characteristic: they have to be resilient. Of course, planning things properly and looking ahead are important, but the ability to respond quickly and adequately to unexpected developments is even more crucial. Organizations have to have a resilient structure and attitude if they are to solve unexpected problems and, possibly more importantly, to seize unexpected opportunities. Sticking to the same path because that is the way you initially planned it will not benefit the end result. It is very easy to say that organizations should be resilient and everyone will be quick to agree that yes, this is indeed a key characteristic. However, the question remains: how do you actually become resilient? It goes without saying that I do not have a surefire recipe at the ready, but I can definitely help you on your way. Entire volumes could be written about each of these topics, but that is slightly beyond the scope of this blog. Instead, I have compiled a brief overview of five factors that will help you become resilient:

1. Willingness to change

In any case, every layer/every unit of an organization must have a basic willingness to change and must be aware of the complexity of an ERP implementation project. This can be achieved through good communication about the benefits and necessity of a new ERP system, but also about the effort and complexity this will involve. Simply distributing some memos and reports and giving a few presentations will not do: that will not help you change attitudes (if only it were so simple). Information channels in particular are crucial to changing attitudes within an organization and providing essential information. Personally managing negative expectations and providing explanations during conversations in the break room, for instance, are considerably more effective.

Note: informal does not mean incidental. Informal communication can be used very consciously, and good managers and project managers will use it intensively. As one of my colleagues recently remarked: decisions may be ratified in meetings, but they are made informally before the meeting even takes place.

2. Entrepeneurship within the organization

In addition, internal entrepreneurship should be promoted and valued in an organization. This is exactly the attitude that will allow the organization to respond quickly and effectively to problems and opportunities. You might encourage entrepreneurship by rewarding employees for taking initiatives and sharing good ideas, for instance, but it is equally important that you do not immediately chastise those with initiatives that do not quite work out as intended. People must be allowed to make mistakes and must not be scared of making them.

3. Sense of urgency

Another important precondition is that everyone in the organization must feel the urgency to change. Without this pressure, it will be difficult to set things into motion. There is a positive way and a negative way to fuel this urgency, and though the positive approach is more pleasant, it might sometimes be necessary to take the negative route. Although education experts will often try to convince us that you will end up with fantastic children simply by doing no more than reward good behavior, parents know that this is just an illusion. In some cases, punishment (or the threat of punishment) is the only thing that will work. That is not to say that you should not prefer rewarding positive behavior, as you obviously want to avoid a culture of fear in your organization.

4. Create space

When organizations are confronted by unexpected developments, they need to have the space to deal with them. This means that you need the time and money to carefully explore and analyze the unexpected. When unexpected developments put pressure on the project’s timetable and budget, the project manager will seek to hide these developments as quickly as possible, because they simply do not have the time and space. In an ERP project, an organization must have the time and space to resolve issues arising in the project, if necessary outside the project. Even formal, highly-structured organizations must have this space. Over time, creating procedures and company rules will help organizations become very efficient and effective: again, we like it when the trains run on time. All too often, though, following procedures and company rules becomes an almost religious duty. Organizations must create space and slacken the reins, giving their employees the opportunity to explore new areas and make mistakes without having to fear negative consequences.

5. External network in order

No organization is an island. Although organizations do not like airing their dirty laundry, it can be wise to ensure that your organizations is connected with other organizations that may be able to help or contribute ideas. Do take note that I’m referring to the external network: the external, personal contacts of everyone within an organization are of vital importance in responding to unexpected developments. Working with external parties, or using their ideas and solutions, can help you solve problems and seize opportunities. Generally speaking, navel-gazing will not help you deal with unexpected developments.

ERP projects affect the whole organization

It is important that the factors that underlie resilience are known to more people than just upper management. ERP projects affect the entire organization, which is why everyone in the organization, from the very top to the very bottom, should be aware of the importance of resilience and seek to make a positive contribution. A revolutionary idea might be to set up a large-scale programme to help make your entire organization more resilient. You need not have a specific goal or problem in mind: it will simply help your organization respond to unexpected developments. Unexpected developments are not just restricted to ERP projects:  you might compare training your organization’s resilience to training your body. If you are fit enough, you can easily restructure your plans and think of your own solution when train traffic comes to a standstill once again. You could go on foot or by bike, or you might even build a rocket to explore new horizons!

 

Do you want to know more about this subject?

Do you want to know more about the subject of ERP-processes or do you need consultancy on demand for your organization? Then contact the author of this blog and also co-founder of Viperty Jos van de Cappeleveen and get advice on the best route for your organization.New call-to-action