By Helen A. Hawkins, PhD, Sopris Systems Project Manager
The importance of dealing with the human side of change when embarking on a major transformational initiative—such as a new Dynamics AX Enterprise Resource Planning (ERP) implementation—is often overlooked. The human side is likewise one of the major causes of project failures to deliver on time and within budget.
There is power in the status quo, especially if people don’t feel a compelling need to change. Even if there is a valid reason to change the ERP system, the majority of the employees, partners, customers, vendors, and stakeholders impacted may not be aware of, or care, about that reason. They may feel comfortable with the current state of affairs because they don’t understand what’s in it for them—or why they were not consulted about the decision to change.
Human resistance to change is natural and should be expected. Emphasis on planning for the human side of change is often prioritized much lower than building out the new hardware, software, and business processes. In the same way an ERP system requires taking steps—requirements analysis, design, build, train, test, and rollout—human change management requires creating awareness, desire, knowledge, ability, and reinforcement (aka ADKAR).
John Kotter from the Harvard Business School suggests that major transformation efforts fail when formal change processes are not put in place. He outlines eight steps necessary for transformational change to succeed:
- Establish a sense of urgency.
- Form a group to lead the change effort.
- Create a vision.
- Communicate the vision.
- Empower people to act on the vision.
- Create short-term wins.
- Consolidate improvements and create more change.
- Institutionalize the new way of doing things.
Oftentimes we start engagements with clients who put the cart before the horse. The C-Suite decides to purchase software without planning for the transformational change impact on the people involved. Then we inevitably witness change resistance as the project gets underway and human resistance, which slows the timeline and increases the budget. Starting the engagement with the readiness and willingness for change—and establishing an appropriate change management initiative that runs in parallel with the system implementation—should be the rule, not the exception, if ERP implementations are to succeed.