Choosing to move your Enterprise Resource Planning (ERP) operations to the cloud is a transformative experience for your organization. Whether you are making this transition to streamline business processes, prepare for an acquisition, or to simplify operations, your transformation is as much about people, behaviors, and how you work as it is about the technology.
Software-as-a-Service (SaaS) platforms are easier, quicker and more straightforward to implement, compared to a customized, on-premise software. Why? SaaS implementations are based on best practice processes that can be tailored to your business.
It’s similar to the options for a new home - build a house or buy a condominium? When you build a house, you decide every facet from size of rooms to wall placement to where plumbing and electric are routed. Then you get to pick the color of paint, flooring, and tile and ultimately where your furniture is placed. When you buy a condominium, you have a preset constructed structure with potential to make minor modifications and selections to personalize – there’s no opportunity to build to your specifications.
When you move to Software-as-a-Service, in the cloud, you are a tenant in an environment that is built and administered by someone else. Your processes will change, your organization will shift, and your workforce skills will need to adapt.
Organizations are Systems – Everything is connected
As with Jenga, blocks build upon the strength of what was placed before it, but when structures are interconnected, removing, or changing a piece impacts the stability of the overall structure, or in this case – organization. Many organizations approach ERP cloud transitions similar to a traditional on-premise technology upgrade and are unprepared for cloud-specific considerations. Moving finance, accounting and human resource management functions to the cloud is different; It’s a business transformation that creates and introduces a ripple effect throughout the organization, impacted by the approach and upfront decisions.
As you plan and prepare for transformation think about your transition and consider the following from a holistic view:
- Technology’s role is to enhance the efficiency and consistency of business processes. Business processes are interconnected. The decisions you make for one process more than likely will impact others. Do you have all the right people in the room to represent and understand the business holistically? If not, the downstream impact you may experience due to design re-work, delayed go-live, or resistance could be significant, impacting business outcomes and ROI.
- Managing team bandwidth: Daily work needs to continue during the design. Do you have the resources/people with the right skills available to help the design team while continuing the daily work?
- Job role impact: Cloud-based ERP offers an opportunity to revisit who does the work and may open up opportunities to adjust your organization or shift responsibilities. Is a shared service model an option?
- Managing System Updates: Cloud-based ERPs introduce updates and functionality regularly. Do you have the governance and decision-making structures in place to review, test, integrate and communicate with or train impacted individuals?
- One of the key benefits of ERP operations in the cloud is streamlined and simplified processes and a standard interface. However, it is counterintuitive for individuals doing the work to have to adopt their processes to fit the technology. Technology is, at its root, a tool, and people expect that tool to make their work easier and to bring value to their specific job. How will you ensure end users are informed of the changes to process, and possibly policy, and drive adoption of the new way of working?
- On average, it takes 66 days to build a new habit. Are you thinking about the long-view and sustaining the adoption of the new way of working?
- Adoption: Your organization won’t change the way it works without people changing behaviors and adopting the new processes and technology. How big of a change is this for the people who do the work? How ready is your organization to make this change? Do you have the capability to support your organization through change?
- Resistance: People and teams process change differently and express a range of emotions from optimism and hope to fear and caution. Are you prepared to help your team and the end-users to move through the reactions to the change productively?
- Ability: New technology requires new knowledge and skills. Job roles and responsibilities may be redefined or shift. Do you understand what those skills will need to be and how you will develop them?
Your choice to implement a cloud-based ERP is a holistic business transformation. View the cost and impact to your business through the consideration of the organization, people, process, and of course, the technology. You will spend money for the right technical solution; but ensuring people who use the system get value from it is necessary to achieve the financial and organizational benefits you desire. The people impact should be part of the overall business case and forefront of consideration, not an afterthought, or a consideration during the implementation process or during deployment planning.
You have an opportunity to do things different.
Research shows a direct correlation with deliberate and structured management of the people side of change with achieving project results. You are six times more likely to achieve project success (Prosci, 2018). When you are deliberate, purposeful, thoughtful, and intentional in planning for the people side of change you:
- Increase the probability of your new cloud-based ERP being adopted by the users
- Mitigate the natural disruption that comes from introducing new processes and technology
- Focus on realizing the people-dependent ROI of your project
- Start to introduce change competency into your organization
Our recommendation is to view your transformation effort holistically by considering the impact on the whole system (technology, organization, process, people). Implementing the technology is important. Just as important is the ripple effects of impact on your people. Be purposeful to also:
- Assess how big the change is for your organization and how ready your organization is to make the change
- Develop a deliberate, tailored, targeted strategy to drive adoption
- Engage and equip change leaders to drive the transition and adoption
- Select the right tactics - communications, engagement, training, resistance management, coaching - to support the change
Making the decision to move to the cloud is a considerable endeavor. Incorporating a deliberate approach to address the people, process and technology changes in your business transformation initiative will enable your team to be adaptable, resilient, and able to uncover new ways to ignite growth that drives results.
By: Leslie Oines, Principal Consultant and Shannan Simms, PhD, Vice President