© 2002 lamarsh & associates, inc. k. judge surviving erp how to manage the organizational...
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© 2002 LaMarsh & Associates, Inc.
K. J
udge
SurvivingERP
How to Manage the Organizational Change
Herman A. Zwirn CIRM
LaMarsh & Associates, Inc.
2© 2002 LaMarsh & Associates, Inc.
APICS Chicago Chapter 14
05/21/02
participants will ...
• Learn a working model of Change Management
• Determine how to use Change Management strategies and tactics in your ERP implementation
4© 2002 LaMarsh & Associates, Inc.
APICS Chicago Chapter 14
05/21/02
"We trained hard-but it seemed thatevery time we were beginning to form into teams, we would be reorganized. I was to learn later in life that we tend to meet any newsituation by reorganizing; and whata wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency anddemoralization."
Organizational change: and the beat goes on...
PETRONIOUS (1st Century Roman and advisor to Nero)
5© 2002 LaMarsh & Associates, Inc.
APICS Chicago Chapter 14
05/21/02
Some myths orWhy we don’t need change management
• People will always adapt to change.
• Change happens, you don’t have to manage it.
• That’s what we pay our managers to do.
• The project will get done with or without change management.
• If you change the process, everything will change.
• ERP makes change happen.
6© 2002 LaMarsh & Associates, Inc.
APICS Chicago Chapter 14
05/21/02
Failure is Possible
No Plan for Implementation
Fuzzy Definition of Desired
State
Failure to Integrate
all Changes
FAILURE
7© 2002 LaMarsh & Associates, Inc.
APICS Chicago Chapter 14
05/21/02
Critical Success Factors
• User Involvement
• Executive Management Support
• Clear Statement of Requirements
• Proper Planning
• Realistic Expectations
• Smaller Project Milestones
• Competent Staff
• Ownership
• Clear Vision and Objectives
• Hard Working Focused Staff
8© 2002 LaMarsh & Associates, Inc.
APICS Chicago Chapter 14
05/21/02
Change is about...
• Organizations• Individuals• Results
9© 2002 LaMarsh & Associates, Inc.
APICS Chicago Chapter 14
05/21/02
Change is about...
• Structure• Process• Culture• People
10© 2002 LaMarsh & Associates, Inc.
APICS Chicago Chapter 14
05/21/02
Stages of Change
Current State
WHY?WHY?
Delta State
HOW?HOW?
Desired State
Desired State
K. Judge
WHAT?WHAT?
11© 2002 LaMarsh & Associates, Inc.
APICS Chicago Chapter 14
05/21/02
Layers of Desired State
Company’s Desired State
Department’s Desired State
Target’s Desired State
12© 2002 LaMarsh & Associates, Inc.
APICS Chicago Chapter 14
05/21/02
Desired State
Structu
re
Proces
s
Culture People
13© 2002 LaMarsh & Associates, Inc.
APICS Chicago Chapter 14
05/21/02
Dip in the Delta
Productivity
K. Judge
14© 2002 LaMarsh & Associates, Inc.
APICS Chicago Chapter 14
05/21/02
Dip in the Delta
Productivity
K. Judge
15© 2002 LaMarsh & Associates, Inc.
APICS Chicago Chapter 14
05/21/02
Why?
• “There are many ways to achieve it, but managing change is no longer a competitive discriminator – it is just part of the ante to get into the game. Competitive advantage goes to the company that can manage change and embrace innovation, proactively, while minimizing perturbation of existing operations.”
Based on Next Generation Manufacturing Project, The Agility Forum
17© 2002 LaMarsh & Associates, Inc.
APICS Chicago Chapter 14
05/21/02
What is it?
• Change management is the methodology that integrates change and the ability of the organization and people to adopt it.
• It is an organized, systematic application of the knowledge, tools and resources of change that provides organizations with a key process to achieve their business strategy.
• It is a real tool to mitigate the risk and increase both the ownership and sustainability of change.
18© 2002 LaMarsh & Associates, Inc.
APICS Chicago Chapter 14
05/21/02
What you need
• A consistent and scalable model of change that matches the change process
• A disciplined methodology to implement the model that can be integrated into the way work is done
• A learning system that embeds a change capability into the workforce
19© 2002 LaMarsh & Associates, Inc.
APICS Chicago Chapter 14
05/21/02
Managed Change™ ModelExterna
l Change Drivers
Internal
Change
DriversPrepare to Change
ResistanceResistance
SponsorSponsor TargetTargetChange Agent
Change Agent
CultureCulture HistoryHistory
Identify the Change
DeltaDeltaCurrentCurrent DesiredDesired
Plan the Change
RewardRewardCommunicationCommunication LearningLearning
Implement the Change
Sustain the Change
20© 2002 LaMarsh & Associates, Inc.
APICS Chicago Chapter 14
05/21/02
Methodology
Current State
Desired State
Fishbone Analysis
Dip in the Delta
Key Role Maps
Culture Analysis
History Assessment
Resistance Assessment
Statement of Work
Team Infrastructure
Change Headquarters
Communication Team
Communication Plan
Learning Team
Learning Plan
Communication Events
Learning Events
Reward Events
Feedback Reports
Deliverable Library
Reward Team
Reward Plan
Deliverables
Ownership Development Plan
Step FiveMonitor the Change
Step OneIdentify the Change
Step TwoPrepare the Change
Step ThreePlan the Change
Step FourImplement the Change
Project GovernanceSteps
Current State
Desired State
Fishbone Analysis
Dip in the Delta
Key Role Maps
Culture Analysis
History Assessment
Resistance Assessment
Statement of Work
Team Infrastructure
Change Headquarters
Communication Team
Communication Plan
Learning Team
Learning Plan
Communication Events
Learning Events
Reward Events
Feedback Reports
Deliverable Library
Reward Team
Reward Plan
Deliverables
Ownership Development Plan
Step FiveMonitor the Change
Step OneIdentify the Change
Step TwoPrepare the Change
Step ThreePlan the Change
Step FourImplement the Change
Project GovernanceSteps Step Five
Monitor the ChangeStep One
Identify the ChangeStep Two
Prepare the ChangeStep Three
Plan the ChangeStep Four
Implement the Change
Project GovernanceSteps
How?
21© 2002 LaMarsh & Associates, Inc.
APICS Chicago Chapter 14
05/21/02
Company
Structure Proces
s
Culture People
•Link ERP to business strategy•Support an ERP Process Change Center of Excellence•Define internal connections to build sponsorship cascade•Define executive sponsor roles
•Apply a change model to the ERP implementation•Introduce a change methodology •Use the change methodology as a part of all aspects and levels of the ERP implementation
•Build organizational change learning capability•Process Orientation•Create sponsor level Learning
•Integrated Enterprise Thinking•Seeks change•Focused, disciplined and patient
22© 2002 LaMarsh & Associates, Inc.
APICS Chicago Chapter 14
05/21/02
Departmental
Structure Proces
s
Culture People
•Apply a scalable change model•Apply a change methodology to implement the model•Embed the change methodology into other ERP methodologies
•Build Departmental Sponsor Cascade•Define ERP roles and responsibilities•Create key role charters•Define ERP performance measures
•Develop knowledge of ERP and organizational change•Know enterprise role of the department•Develop change agent skills•Develop ability to use the change methodology
•Change resilient•Knowledge based•Value driven•Cross-functional Partners•Process-driven•Customer focused
23© 2002 LaMarsh & Associates, Inc.
APICS Chicago Chapter 14
05/21/02
Individual
Structur
e
Proces
s
CulturePeople
•Design jobs to include change management•Build in ERP role and measures•Build change agent measures into performance evaluation
•Design work flow and methodologies to include change management tasks.•Change management is a work habit
•Provide general change process knowledge•Process thinking capability•Apply change agent skills•Develop target skills
•Create tolerance for change•Knowledge driven•Value centered•People centered•Customer centered
24© 2002 LaMarsh & Associates, Inc.
APICS Chicago Chapter 14
05/21/02
Data Gathering and AnalysisIdentify Risk/ Identify issues / responseEstablish SponsorshipBuild Team strength
Assess
Executive Kick-off
Prepareto
Change
Business Assessment Analysis
Develop
Planthe
Change
Configuration
Design andFinalizeCommunicationsLearning (Training)AndRewards
Launch and ExecuteSystem Events:• Communication• Learning• Rewards Event designs
Specific communications, learning and rewards events
Deploy
ImplementtheChange
Implement System/ Processes / Policies
Post-Audit
SustaintheChange
Own It
Go Live
Governance&
Identifythe
Change
Res
ult
s Build ProjectInfrastructure
Define goals andSet expectations
TurnoverResponsibility
Identify Next Steps:
KnowledgeTransfer
Plan
Change Communications
ERP Managed Change™Integration
25© 2002 LaMarsh & Associates, Inc.
APICS Chicago Chapter 14
05/21/02
Elements of successful change
• Commit to making change management a key competency and part of the ERP strategy.
• Explain why the Current State is no longer viable.
• Clearly define the Desired State that will result from the ERP implementation.
• Build a systematic change-management methodology to implement your change during the ERP Delta State.
• Integrate that methodology into the heart of the ERP project and the organization.
26© 2002 LaMarsh & Associates, Inc.
APICS Chicago Chapter 14
05/21/02
Discipline
• The ERP Desired State as requires the continuous, conscious process of applying a systematic change methodology to implement ERP and build a sustainable future that is owned by the greatest majority of people in the enterprise.
27© 2002 LaMarsh & Associates, Inc.
APICS Chicago Chapter 14
05/21/02
Process technology
Process automation
Information System
Technical / task based skills
Information and business systems capabilities
Enterprise understanding
Inter-personal and collaborative behaviors
Ownership/Innovative Application
BENEFIT RELATIONSHIPS
60%
20%
20%
Why is this Important?
28© 2002 LaMarsh & Associates, Inc.
APICS Chicago Chapter 14
05/21/02
It makes a difference
• It impacts 90% of project critical success factors
• It impacts 100% of the factors reported to cause projects to fail or be cancelled
• Benefits are obtained earlier
• Failure risks are reduced
29© 2002 LaMarsh & Associates, Inc.
APICS Chicago Chapter 14
05/21/02
Critical Success Factors• User Involvement• Executive Management Support• Clear Statement of Requirements• Proper Planning• Realistic Expectations• Smaller Project Milestones• Competent Staff• Ownership• Clear Vision and Objectives• Hard Working Focused Staff
MC
MC
MC
MC
MC
MC
MC
MC
MC
30© 2002 LaMarsh & Associates, Inc.
APICS Chicago Chapter 14
05/21/02
Your Turn• Questions
• Comments
• Concerns
• Ideas
Herman A. Zwirn [email protected]