CRM Authors: Xenia von Wedel, Ian Khan, PR.com Newswire, Steve Mordue

Related Topics: CRM

CRM: Blog Feed Post

2010 ERP Benchmark Preview

Why organizational change management is so important to ERP implementations

ERP at Cloud Expo

Although it is one of the key success factors for any ERP implementation, organizational change management can be difficult to quantify and rationalize.  However, a preview of our 2010 ERP benchmark study results begin to quantify the importance of a comprehensive organizational change management plan.

So far, over 2,000 organizations have participated in our study and we plan to publish results to our clients beginning early next year.  In the meantime, here are a few highlights from the study.

Highlights from Panorama’s Upcoming 2010 ERP Benchmark Study

  • Over 40% of organizations are dealing with significant change concurrent with a new ERP system rollout. An ERP system rollout alone will impose significant pressures on an organization and its resources.  Throw in other changes, such as a new CEO, acquisition of another company, or layoffs, and that change can be the straw that breaks the camel’s back.  Over 40% of companies implementing ERP software are dealing with either a new CEO or the addition of new office locations.  In addition, 26% experience a merger or acquisition around the same time as their ERP deployment, while 19% go through layoffs (that number is trending upward in the ongoing 4-year study).  The magnitude of these changes make a strong organizational change management program even more imperative.
  • People do not adapt well to change and organizational communication is weak. Over 53% of implementing organizations self-assess their ability to deal with change as fairly poor or very poor.  In addition, 47% say communication between management and employees is poor.  These types of environments are not conducive to effective ERP implementations.  Organizational change management tools, however, help address these organizational risks and barriers to make the rollouts more successful.
  • Over 60% of organizations suffer from poor visibility to data and poor integration in their old systems. This metric suggests that employees using a new ERP system have strong organizational resistance and a steep learning curve to overcome.  Poor integration between functional areas in the old system was cited by 64% of organizations as a driver for a new system, followed by poor visibility to reports and key operational data at 62%.  These metrics underscore the magnitude of change that a single, integrated enterprise software system such as ERP or CRM will entail.  An effective organizational change management plan is critical to helping employees understand and leverage the newfound operational visibility in the new system.
  • Organizations expect a lot from their ERP systems. Despite the organizational challenges outlined above, companies expect their enterprise software systems to deliver real business value.  Sixty-nine percent of companies expect their systems to improve business performance, while 39% expect the new system to standardize business operations and 39% also expect the new system to make employees’ jobs easier.  Not to be the bearer of bad news, but our experience and research shows that these goals simply don’t happen without effective organizational change management.
  • Most companies are not yet ready for the organizational changes of ERP software. Perhaps most alarmingly, a majority of companies are not ready to address the people, process, and benefits realization aspects of their enterprise software implementations.  Nearly 50% of companies in the process of implementing ERP software have not yet started their organizational change, training, or communication plans.  In addition, 42% have not developed a business case and ROI analysis, which suggests companies are not ready to measure and manage the business benefits they expect to achieve.  All of these areas need to be addressed prior to an effective implementation, which does not bode well for a large number of companies.

So what are the lessons learned from this benchmark data?  In case you don’t follow our other blogs or research briefings, organizational change management is one of the key reasons why companies succeed in their ERP initiatives, while lack of it is the reason most fail.  Success or failure has very little to do with software, which is why organizations need to carefully plan and allocate project resources to effectively handle organizational change management activities as part of their enterprise software initiatives.

How ready are you for your enterprise software initiative?

Take our organizational ERP readiness survey to find out.

Read the original blog entry...

More Stories By Eric Kimberling

Founder and president of Panorama Consulting Group. Founded in 2005 and headquartered in Denver, Colorado, Panorama Consulting Group is a niche consulting firm specializing in the enterprise resource planning (ERP) market for mid-sized companies across the globe. Independent of affiliation, Panorama helps firms evaluate and select ERP software, manages the implementation of the software, and facilitates all related organizational changes to assure that each of its clients realize the full business benefits of their ERP implementation. We minimize ERP risk, accelerate implementation progress, and increase the success and value of your ERP initiatives.

IoT & Smart Cities Stories
The platform combines the strengths of Singtel's extensive, intelligent network capabilities with Microsoft's cloud expertise to create a unique solution that sets new standards for IoT applications," said Mr Diomedes Kastanis, Head of IoT at Singtel. "Our solution provides speed, transparency and flexibility, paving the way for a more pervasive use of IoT to accelerate enterprises' digitalisation efforts. AI-powered intelligent connectivity over Microsoft Azure will be the fastest connected pat...
There are many examples of disruption in consumer space – Uber disrupting the cab industry, Airbnb disrupting the hospitality industry and so on; but have you wondered who is disrupting support and operations? AISERA helps make businesses and customers successful by offering consumer-like user experience for support and operations. We have built the world’s first AI-driven IT / HR / Cloud / Customer Support and Operations solution.
Codete accelerates their clients growth through technological expertise and experience. Codite team works with organizations to meet the challenges that digitalization presents. Their clients include digital start-ups as well as established enterprises in the IT industry. To stay competitive in a highly innovative IT industry, strong R&D departments and bold spin-off initiatives is a must. Codete Data Science and Software Architects teams help corporate clients to stay up to date with the mod...
At CloudEXPO Silicon Valley, June 24-26, 2019, Digital Transformation (DX) is a major focus with expanded DevOpsSUMMIT and FinTechEXPO programs within the DXWorldEXPO agenda. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive over the long term. A total of 88% of Fortune 500 companies from a generation ago are now out of business. Only 12% still survive. Similar percentages are found throug...
Druva is the global leader in Cloud Data Protection and Management, delivering the industry's first data management-as-a-service solution that aggregates data from endpoints, servers and cloud applications and leverages the public cloud to offer a single pane of glass to enable data protection, governance and intelligence-dramatically increasing the availability and visibility of business critical information, while reducing the risk, cost and complexity of managing and protecting it. Druva's...
BMC has unmatched experience in IT management, supporting 92 of the Forbes Global 100, and earning recognition as an ITSM Gartner Magic Quadrant Leader for five years running. Our solutions offer speed, agility, and efficiency to tackle business challenges in the areas of service management, automation, operations, and the mainframe.
The Jevons Paradox suggests that when technological advances increase efficiency of a resource, it results in an overall increase in consumption. Writing on the increased use of coal as a result of technological improvements, 19th-century economist William Stanley Jevons found that these improvements led to the development of new ways to utilize coal. In his session at 19th Cloud Expo, Mark Thiele, Chief Strategy Officer for Apcera, compared the Jevons Paradox to modern-day enterprise IT, examin...
With 10 simultaneous tracks, keynotes, general sessions and targeted breakout classes, @CloudEXPO and DXWorldEXPO are two of the most important technology events of the year. Since its launch over eight years ago, @CloudEXPO and DXWorldEXPO have presented a rock star faculty as well as showcased hundreds of sponsors and exhibitors! In this blog post, we provide 7 tips on how, as part of our world-class faculty, you can deliver one of the most popular sessions at our events. But before reading...
DSR is a supplier of project management, consultancy services and IT solutions that increase effectiveness of a company's operations in the production sector. The company combines in-depth knowledge of international companies with expert knowledge utilising IT tools that support manufacturing and distribution processes. DSR ensures optimization and integration of internal processes which is necessary for companies to grow rapidly. The rapid growth is possible thanks, to specialized services an...
At CloudEXPO Silicon Valley, June 24-26, 2019, Digital Transformation (DX) is a major focus with expanded DevOpsSUMMIT and FinTechEXPO programs within the DXWorldEXPO agenda. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive over the long term. A total of 88% of Fortune 500 companies from a generation ago are now out of business. Only 12% still survive. Similar percentages are found throug...