Final Change Management Revised

7/31/2019 Final Change Management Revised

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[CHANGE MANAGEMENT: ERP IMPLEMENTATION]


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TABLE OF CONTENTS

Executive Summary........................................................................................................................................................... 3Introduction .......................................................................................................................................................................... 4Explanation of processes under consideration .......................................................................................................... 5

ERP Implementation Process..................................................................................................................................... 5Change Management Process .................................................................................................................................... 6

Operations Theory Discussion: Change management ............................................................................................ 7Case Study analysis ........................................................................................................................................................... 8Case Analysis and Discussion ........................................................................................................................................ 9Recommendations ........................................................................................................................................................... 11Conclusion......................................................................................................................................................................... 11References.......................................................................................................................................................................... 13


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EXECUTIVE SUMMARY

Change management is one of the key aspects that an organization should be prepared to face

and it is one of the most challenging one. Especially these days with many companies

actually going for the IT implementation, there are huge changes that would be in place when

there is a complete change in the existing systems. The success of the implementation

depends on how well the organization manages the change in the system. The report

discusses about two cases on Sri Lankan companies who have taken up ERP implementation

at two different stages and how they have managed to adapt to the changes in the existing

system so that they were successful in implementing the ERP system. The report also details

about the theoretical aspects of change management and at the same time it shows how

various theoretical concepts are put into practice by various companies so as to deal with the

change.


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INTRODUCTION

The business organizations these days have been investing huge sums of money in

developing their IT systems and one of the main reasons why they have been doing this is

because of the peer pressure. Most of the companies these days have started to make use of

IT technologies to make things easier for them and thus it becomes imperative for others also

to adapt to these technologies so that they are not sidelined in the competition (Leon, 2008).

The organization which does a proper IT implementation gains a competitive advantage over

its competitors. Most of the companies these days who are aiming to grow exponentially have

been resorting to ERP implementation processes so that they can streamline the processes in a

better manner. But one of the challenges that they face in the process is that that they look at

these ERP implementation processes to solve their problems all at once without

understanding the nuances of the implementation process. There is a massive change in the

existing system that any ERP implementation process warrants, thus the employees have to

be hand held so that they can seamlessly adapt to these changes. One thing that the

companies have to take note is that they have to have a strong top management who are ready

to make these changes and at the same time educate their employees about the need of having

such systems. It needs to be said that ERP implementation in a company doesnt essentially

guarantee a success to any company. In fact looking at the statistics, we can say that most of

the ERP implementations that have happened in many companies across the world have been

a failure. This is mainly because of the fact that they looked at these ERP implementation as a

short cut to make things easier for them without understanding the need of having a change

management process in place that can make sure that they use this ERP implementation to

their advantage (Lau, 2001). Before doing this the companies have to make sure they

understand and analyze various factors that are important in making this ERP implementation

successful. One of the key differentiators that can make or break an ERP implementationprocess is the change management process that the companies undertake. This in fact has

been identified as one of the factors that have resulted in many ERP implementation failures.

In this report we are trying to analyze and understand various factors that are important in

making an ERP implementation successful and at the same time I try to understand the

importance that change management holds in any organizational context when they are trying

to change and adopt something totally new for the company.


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Thus the report aims at understanding various factors that are important in making an ERP

implementation successful and at the same time it take the case of Srilankan Organizations in

general and few companies in particular in understanding how they go about these changes

and how effectively they have managed to tackle the change in their organizations. The report

also aims at analyzing and understanding how different is the change management process in

Sri Lanka as compared to that of other nations and whether any local factors play an

important role (Oosterhout, 2006). The report would help us in making a framework in future

for making the change management an important part in the whole implementation process.

This framework that we would design at the end of this report would help us in identifying

the relationship with the change management process and the ERP implementation process so

that it could be managed in a successful manner.

EXPLANATION OF PROCESSES UNDER CONSIDERATION

ERP IMPLEMENTATION PROCESS

Enterprise Resource planning is a management technique that is used by the organizations to

integrate various business processes so that the resources that are available at the disposal of

the company are managed effectively. This helps the management to streamline various

processes and allocate the resources to those processes that are more important to the

company by prioritizing them. The studies have shown that there are several advantages that

the company has by adopting the ERP processes in the system (Parr, 2008). Many

academicians have pointed out the importance of how effective an ERP implementation can

be in improving the processes and at the same time decrease the costs of operations by

reducing the redundant steps that are present in the system. Based on these studies there are

several frameworks that are developed to guide the ERP implementation process? In thisreport we are looking at the Project phase model that was developed by Shanks and Par and

how it has helped the Sri Lankan Businesses in improving the processes and thus improve the

margins.

The Project Phase model by Parr has been divided into three sections mainly such as

Planning, Project Set Up and Enhancement. In the planning part the top management decides

on the broad guidelines that they would decide for the ERP implementation (Leon, 2008).

This means that first of an ERP implementation process that suits the company operations. A


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steering committee needs to be elected from among the employees who could make sure that

the ERP implementation takes placed in the right manner. This is also to have someone

accountable for the same. After this the project scope needs to be decided by the top

management so that the whole team is focused in getting the work done at the right pace and

using the right amount of resources. It also involves deciding the person who would be

heading the operations and allocating the resources that are required for the same (Li, 1997).

The second step involves Project set up which involves various steps such as Project set up

and Re engineering redesign that needs a complete overhaul of the existing systems in most

of the cases. It also involves the most important steps in the whole process such as

Configuration of the systems and set up and installation.

CHANGE MANAGEMENT PROCESS

Even though there are several advantages that are associated with the ERP implementation in

an organization, there are a large number of organizations who undertake the same and end

up failing. There are several factors that are responsible for the same. It is clear from various

examples that has been discussed in various literature that change management is an

important role in ERP implementation and if it is not managed properly then, it is bound to

affect the whole implementation process and the whole process would be doomed to fail. One

of the major problems that we face in adopting ERP implementation systems in emerging

economies like that of Sri Lanka is that there is a huge gap in terms of knowledge and they

have to resort to outsourcing many process implementations that in turn affects the change

management systems in a negative manner (Lau, 2001). The time that is taken for the

implementation process and the change management becomes longer thus making it a tedious

process in such countries. It has been revealed that in most of the cases the top management

does not give the required importance to the change management in the whole

implementation process and as a result of the same, they are forced to face many huddles that

can affect the in the process. Thus it becomes important for the businesses in the country to

understand the basics of change management and then go ahead with the implementation

process so that the growth and development of the Sri Lankan businesses are managed

properly. In this study we make use of Kurt Lewis change management process to understand

how change management may be used effectively while implementation of ERP systems in

an organization (Leon, 2008). The Change management process By Kurt Lewis is basically

comprised of three steps namely unfreezes, move and freeze. There is a basic inertia that


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would be there in any system that it requires a push from the side of the management as well

as from the side of the employees so that the changes are brought about in the system. This

means that before the implementation of any change management system, the employees

have to be educated about the same and thus they are prepared to face the change in the

system (Li, 1997). Once the system is ready to accept the changes, the necessary changes

have to be made in the system and they have to make sure that once it reaches the required

point. They have to bring the inertia again so that they lock it in the desired state. If this is not

done then it will affect the whole implementation process mainly because of the fact that

there is no constancy in the process and the employees are bound to get affected and their

productivity would go down instead.

OPERATIONS THEORY DISCUSSION: CHANGE MANAGEMENT

The success in any business depends upon how well they adapt to the changes in the situation

in the market conditions. Change is one of things that the organizations have to deal with and

in most of the cases the organizations does not plan for managing the change; instead they

take reactive steps in order to manage the change in the condition in the market. The theory

of change management means that the organization deals with the change in a systematic and

orderly fashion so that they can be pro active and deal with the damages with minimal losses.

This also gives the organization a competitive edge over its competitors in terms of being

prepared for the change. Change in the environment normally happens either due to an

internal or external stimuli and this in most of the cases would be unforeseen in nature

(Kumar, 2009). There are several methods that the practitioners use to manage these changes

and make things more clear for the top management to handle. Managing an organization in

an uncertain environment can result in the top management getting confused in fixing up the

priorities and hence allocation of resources would not be done in the right manner. Changesthat are happening in an organization not only affect the people and the organization, but the

wider organizational context also. Thus even though the employees and other organizational

actors may be an important part in the whole thing we may say that other concerned

stakeholders and other beneficiary groups may be a part of the whole change process in an

organization.


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CASE STUDY ANALYSIS

It has been seen from the previous section that there has no study have been done on the

correlation between the change management and the ERP system implementation in a Sri

Lankan business context. This is one of the important things that need to be studied so that

the ERP implementation process is on track. The report aims at achieving two things: How

the change management processes affects the ERP implementation in an organizational

context and at the same time we try and identify whether such techniques are being used by

Sri Lankan companies while they have been doing their ERP implementation.

The primary objective of this study is to identify and fill the gaps in the research which exists

between these two important processes namely ERP implementation and change

management. The report aims to understand the influences that the process of change

management has on ERP implementation processes and the extent to which it affects the

implementation process. It also tries to find out an ideal framework for ERP implementation

in a Sri Lankan context.

Here we use a case study analysis as it is contemporary issue and a case study method is the

one that is best suited to understand the issues and find a solution for the same as in this

subject the boundaries between theory and practice is blurred (Panneerselvam, 2008). Two

different case studies have been used for this purpose and the organization that has been used

in this case has been information rich in terms of ERP implementation processes. The

objectives were kept in mind while choosing these organizations and at the same time it has

been ensured that the organizations chosen for the study is different in all respects so that we

get a holistic view and the study does not become redundant.

There are two case studies that would be used in this case to study about the effects of change

management in ERP implementation process. Let us look at both these cases and then

analyze the same.

Afridi and Angell is a subsidiary of a Dubai based firm which is established in Sri Lanka in

the year 1995. The company was hugely successful in its operations as they have managed to

gel well with the culture irrespective of the fact that it is completely different from that of

Dubai. The company was established as a flagship firm and they are in the business of

milling of Wheat and have a capacity of around 1000 metric tons per day. With a number of

processes that they have to handle the top management wanted to streamline the processes


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and hence in effect they wanted to save the costs that are involved in these processes. It was

also found that in many cases some processes are redundant in nature and thus they had to be

eliminated (Irani. 2001). The company top management saw ERP implementation as the

solution to the problems that they face. One of the best part was that the top management

envisioned these changes much before the actual operations in the country was about to start

and as a result of the same they have managed to make it successful. This has helped them in

making the required changes within the timeline and this pro active decision has also resulted

in reducing the resistance from the part of the employees and thus the whole implementation

process went on smoothly. One of the only problems that they have faced in the ERP

implementation process was that they were new to the circumstances and it took them some

time to understand the culture and hence design of the implementation process took some

time.

The second case is about a public sector organization in Sri Lanka where their area of

operation was into operations and logistics management. The main problem was in the

finance department which took long times to prepare the reports even though there was

adequate manpower available in the finance department. They have tried out various methods

to overcome this delay and this was solved to a certain extent when the whole department

was made to use MS excel but again this caused some other issues that needed attention fromthe top management. The top management had to come up with a solution that would address

these issues immediately (Irani, 2001). Thus they have decided to automate the processes

with the use of computers and hence get accurate and real time information. This also ensured

that there would be little errors which needed back checking by the employees. Thus they

have decided that ERP implementation is the way out in such a situation. In this case just like

a normal public sector organization, there was a lot of lethargy in the system and thus it was

very difficult for the top management to get it moving. As mentioned earlier, in this case the

most difficult phase for the company was the unfreeze phase. Also the top management faced

some opposition from the part of the employees as they were used to the systems that were

already in place

CASE ANALYSIS AND DISCUSSION

Now that the background of the case has been discussed, let us analyze both the scenarios

with respect to the above mentioned theoretical frame works. In this section I would try and


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analyze both the cases with each other so that the differences in both the scenarios are

brought out.

In the first case the idea of implementation came from the top management who identified the

need of having a change in the processes so that they can adapt to the changed environment.

The implementation idea was put forward much before the actual operations started which

made things much simpler for all the people concerned. In the second case, the need was

identified by the people at ground and later it was passed on to the top management. Even

though ERP implementation was one of the only ways to move forward in this case, there

was resistance amongst the existing employees mainly because of the fact that they were used

to working in a particular pattern and hence they had to change based on the changes in the

system (Fortune,, 2006). Some initial cost had to be incurred by the company in getting their

employees trained for the same and get them ready to work in the new work environment. In

both the cases the employees had to be educated to make them understand the need of ERP

implementation in the organization. In the first case it was much easier for the management to

educate the employees as they were starting up afresh. This was not the case in the second

one. The employees were already seasoned to work in a particular fashion and hence they had

to be made aware of the benefits of shifting their work practices into a separate thing

altogether.

In the first case the job roles did not change much and it was much easier for people to adapt

to the changes which was not the case in the second case. There was a shift in the power from

being decentralized to a centralized power system which meant that the job roles did change

and hence there was uncertainty in the minds of the employees when this implementation has

happened (Hong, 2001). In both the cases we can see that the organizations had to impart

training to the employees and in some cases had to hire new recruits in case the existing skill

sets were not good enough for the process redesign that they have made. In the first case the

vendor had to work with the employees in developing the system that matched their needs

and it was much more difficult as they had to develop the systems right from the scratch and

this was not the case in the second one. The employees and the top management were clearer

about what they wanted and hence the planning part was much easier and at the same time

this meant that the amount of rework that they wanted was minimal in this case (Elrod, 2002).

In the first case after the systems were developed the testing was done later, this has resulted

in more time that was taken for the implementation process. This also meant that they had to


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do continuous iterations to reach the right process. In the second case the testing was done in

parallel and hence the requirement for changes in the system was minimal in nature.

Potential changes that could have been made in both the cases were that in both these cases

the top management took the decision without adequate consultation with the people who are

at the ground. This meant that they had to do more number of iterations which spent both

time and resources to make it as per their requirement. This also resulted in a bit of resistance

from both the parties thus the management had to spend a lot of time educating the

employees. If the employees are also made a part of the same, then they would have

developed a sense of belongingness in the organization and they would have taken the

ownership of the work in making it a success.

RECOMMENDATIONS

Work closely with the vendors so that the changes in the implementation process canbe done as and when they understand the hurdles that are present in the system.

Conduct more training programs so that the employees are handheld to carry outvarious tasks.

Educate the employees well before the implementation starts so that they are ready toface the changes in the system.

Involve employees also in making the decisions and especially when they allocatingthe resources so that the right amount of resources gets allocated to all the

departments.

CONCLUSION

From the report it is clear that in case of change management, the top management has to be

relentless in making it a success right from its beginning to the implementation phase and

should continue to put in the efforts during the enhancement phase. In both the cases the

organizations were not aware about the changes that had happened and as a result of the

same, the steps that they have taken is more or less reactive in nature (Dawson, 2008). This

means that they were more or less unprepared to face the changes that were happening and


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they had to adjust to the situation which both the companies have done in a successful

manner. In case of an ERP implementation program, there would be wide spread changes that

would have to be done in the system and as a result of the same it has to be predicted at a

much earlier stage so that the organization can prepare itself for the changes that are going to

happen in the organizational culture, people and the organization as a whole.

The theoretical framework that has been discussed above shows that there is continuous

relationship between the theory and the practice so there is no gap, but this is not the actual

case. The research shows that the planning phase in the implementation process has a direct

correlation to the unfreeze phase and in the next step where there is a continuous

communication between the vendor and the company where in both the parties work towards

a better solution that would address the issues (Akkermans, 2002). This is the next step that

needs to be managed in change management process. In the case study it is being mentioned

that the training is a continuous process that has been carried out throughout the life of the

project, this is mainly because of the fact that most of the employees lacked the technical

expertise and skills to be on board right from the beginning. Refreezing is one of the most

important phases in the change management as the organization has to make sure that they

reinforce the learning that they have imparted to the employees so that it becomes imbibed in

the work habits of the employees (Rajapakse, 2009). This is ensured by means of usertrainings that makes the employees familiar with the processes. Thus the refreezing phase has

a direct relationship with the enhancement phase in theory. It has been revealed that in most

of the cases the top management does not give the required importance to the change

management in the whole implementation process and as a result of the same, they are forced

to face many huddles that can affect the in the process. Change management is one of those

processes that the organization have to give utmost importance to mainly because of the

uncertainty that surrounds the whole set up and ERP implementation in lots of the cases can

make or break the situation, change management in case of ERP implementation needs a

special attention


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Elrod II, P., & Tippett, D. (2002). The death valley of change. Journal ofOrganizational Change Management, 15, 273291.

Fortune, J. (2006). Framing of project critical success factors by a systems model.International Journal of Project Management, 24, 53-65.

Hong, K.-K. (2001). the critical success factors for ERP implementation: anorganizational perspective. Information and Management, 40, 25-40.

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Panneerselvam, R. (2008). Research Methodology (6 Ed.). New Delhi: Prentice Hallof India.

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Final Change Management Revised