ERP Change Management: Definition, 7 Best Practices, & Case Study

Implementing an ERP system opens the door to greater efficiency and growth. But the key to making it all work smoothly lies in effective ERP change management. With a well-structured approach, your team will easily adopt new processes, ensuring a smooth transition and lasting success.

In this post, we'll explore the importance of change management in ERP implementation, share best practices, and show real-life stories to guide your journey.

What is Change Management in ERP Implementation?

ERP change management is an organised strategy to help an organisation smoothly transition to a new ERP system. The goal is to prepare, support, and guide employees to adapt to the updated workflows and new systems faster and more efficiently.

This guided process includes a thorough plan, clear communication about why the change is necessary, proper training, addressing concerns or resistance, and ongoing support during and after the transition.

ERP implementation is not just technological upgrades; it impacts the organisation deeply at operational, cultural, and strategic levels, ERP change management plays a critical role in driving real and sustained value.

• Ensures that employees are well-prepared, trained, and supported throughout the transition;
• Identifies and addresses potential risks early - such as user resistance, skill gaps, or organisational misalignment
• Create a foundation for the ERP system to be used effectively in the long term, maximising its return on investment (ROI).

7 Best Practices for Effective ERP Change Management

Around 40% of companies face challenges during ERP implementation due to inadequate change management. To avoid these pitfalls, it's essential to adopt proper strategies that ensure smooth transitions, improve user adoption, and see quicker returns on investment. Here are seven best practices to guide your organisation through the ERP change process successfully.

1. Involve key stakeholders early

Stakeholders are individuals or groups who have a vested interest in the outcome of the ERP system. Their input is critical in shaping the system to meet the organisation's specific needs. By bringing them into the planning phase, you can align expectations, build support, and reduce the likelihood of resistance later in the process.

Engaging stakeholders early ensures they have a voice in shaping the ERP implementation.

• Brainstorming sessions: Allows stakeholders to share their concerns, expectations, and ideas. This helps gather diverse perspectives and insights on how the ERP system can best serve the organisation.
• Regular updates and feedback loops: Keep stakeholders informed on project progress, challenges, and milestones, encouraging feedback to guide the implementation.
• Involve them in decision-making: Include stakeholders in key decisions, such as selecting modules or customising workflows. This involvement fosters a sense of ownership and commitment to the project's success.

2. Develop a comprehensive change management plan

This plan acts as a roadmap for navigating the transition, helping you manage changes effectively. Developing a robust change management plan is not challenging if you consider these tasks.

Define clear objectives

You should set specific, measurable, achievable, relevant, and time-bound (SMART) goals. For example, an objective might be to reduce order processing time by 30% within six months of the ERP go-live date. This clarifies the purpose and success criteria for stakeholders.

Create a detailed timeline with milestones

Break the implementation into phases with milestones to mark significant achievements. Each milestone should correspond to specific objectives and tasks, allowing for regular evaluation of progress. Key phases may include:

• Initial assessment
• Training and delivery
• System testing and adjustments
• Go-live and post-implementation support

Including checkpoints in your timeline enables you to monitor the process and make necessary adjustments to stay on track.

Outline roles and responsibilities

Assign specific tasks to individuals or teams, ensuring accountability and clarity.

• Change management leader: Responsible for overseeing the change management strategy and execution.
• Training coordinator: Manages the development and delivery of training programs.
• Communication lead: Handles all communication efforts and ensures stakeholders are informed throughout the process.

3. Create a strong communication strategy

This involves creating multiple channels - such as emails, team meetings, and official town halls or Q&A sessions - where stakeholders can receive information, ask questions, share feedback, and gain clarity on the changes ahead.

Besides, tailoring messages to different audiences is crucial for effective communication. For instance, executives may require high-level insights into the strategic benefits and ROI, while end-users will need practical guidance on how the new system impacts their daily tasks. This targeted approach enhances engagement, mitigates resistance, and promotes a smoother adoption of the new system across the organisation.

4. Provide robust training and support

Employees need to understand how to use the new system effectively with role-specific training. Hands-on training sessions, video tutorials, and user guides are great ways to help employees feel confident with the system.

Beyond initial training, ongoing support is key to long-term success. After the system goes live, it's important to have a help desk or dedicated support team in place to answer questions and solve any issues quickly. Offering refresher training or additional resources, like FAQs and peer-led sessions, can also keep users updated with the system as it evolves.

5. Monitor and evaluate the change process

How do you know if your ERP implementation is on the right track?

Monitoring and evaluating the ERP change process helps answer this question. It involves regularly checking how well employees are adapting to the new system and gathering their feedback. This enables you to spot issues early and take steps to resolve them before they slow down progress.

In addition to feedback, analysing metrics is key to confirming the ERP’s impact on efficiency. You can determine if the new processes are improving efficiency as expected. If not, adjustments can be made to improve the system, ensuring the project stays aligned with organisational needs.

Consider consulting with ERP implementation experts who can provide valuable insights and best practices tailored to your organisation. Their expertise can help you identify potential pitfalls and improve monitoring strategies for a successful implementation.

6. Address resistance to change

Employees may feel uncertain about how the ERP will impact their jobs or routines. To address this, it's important to communicate early and clearly, explaining how the ERP system will benefit both the company and the employees.

Listening to their concerns and showing empathy can go a long way in easing their worries. Encouraging open dialogue and assurance of ongoing support helps reduce resistance, making employees feel part of the change rather than sidelined by it.

7. Foster a culture of change

It's vital to encourage your organisation to be open to new ideas and flexible in adapting to changes. To create this culture, leaders should regularly communicate the benefits of the ERP system and highlight how it will improve the company. Recognising and rewarding employees who adapt quickly and contribute positively can motivate others to do the same. Encouraging teamwork and support during the transition also helps build a positive environment where change feels manageable.

Case Study: How Koppert Achieves Success with ERP Change Management

Koppert, a global leader in sustainable agriculture, needed a flexible ERP system to support its rapid growth and complex supply chain. They transitioned from their outdated ERP system to Microsoft Dynamics 365, an AI-powered ERP and CRM solution that allowed them to adapt to changes and grow without needing another ERP system in the future.

Let's explore how they achieved success through step-by-step ERP change management.

• Starting small and phased approach: Koppert understood that changing their ERP system was a major task that could disrupt their operations. To manage this, they started with core processes like procurement and finance, adding more functions like e-commerce and warehousing in later phases.
• Strong governance and team involvement: Koppert treated the ERP implementation as a business project, not just an IT task. They set up a core team that included both IT and business experts. A steering committee made up of top leaders provided oversight to ensure alignment with company goals.
• Using standard features: In their previous ERP system, Koppert had a lot of custom features, which made things complicated. With Dynamics 365, they used out-of-the-box features. This reduced the complexity and allowed them to streamline processes.
• Clear communication and training: Employees were kept informed about the changes, and received training to feel comfortable using the new system. This minimised resistance and helped ensure a smoother transition.
• The phased roll-out for global operations: Koppert rolled out the ERP system across their global offices in phases, starting with their headquarters in the Netherlands and gradually moving to other locations like the USA, Mexico, and Slovakia. This phased approach allowed them to adapt to local regulatory requirements while maintaining a standardised system.

Conclusion

Effective ERP change management is essential to ensure your organisation maximises the benefits of its new system. By following the above 7 best practices, you can minimise resistance and encourage smoother adoption.

Besides, collaborating with an experienced ERP consultant can further enhance the process with practical insights and strategies. This partnership ensures that your ERP implementation is not only successful in the short term but also sets your organisation up for long-term growth and efficiency.

ERP Change Management: Frequently Asked Questions (FAQs)

1. What is ERP change management?

ERP change management is the systematic approach to preparing, supporting, and helping organisations transition to a new ERP system. It involves managing the people, processes, and technology changes associated with the ERP implementation.

2. Why is ERP change management important?

ERP change management is crucial because it helps a company move to a new system with minimal disruption. Providing training and addressing employees' concerns, encourages people to embrace the change and use the new system effectively.

3. What are the key steps in the ERP change management process?

The key steps are:

• Involve important people from the start.
• Create a plan that explains what will change and when.
• Communicate clearly with everyone involved.
• Provide training and support to help people learn the system.
• Keep track of progress and make adjustments if needed.
• Address any resistance or concerns.
• Encourage a flexible mindset towards change.

Reference: 

• Worldmetrics (2024). Shocking ERP Implementation Failure Statistics: Where Projects Go Wrong.