ASSIGNMENT

(Term Paper)

Problem Statement:
Propose a scheme for change management in a public sector organisation,
planning to commission an ERP package, where no prior computerization was
there.

Submitted To:
Dr. Madhvendra Mishra

Submitted By:
Saroj Agrawal
IMB2009041
MBA-IT (2nd Semester)
 Abstract
One of the biggest changes that an organization can experience is the implementation of an
Enterprise Resource Planning (ERP) system. An ERP system touches every aspect of the
operations of an institution and touches every constituent group both inside and outside the
institution. As a result, leadership should address the communications, politics, resistance,
teamwork, and leadership issues that can provide significant barriers to change, cause delays
in project timelines, and hinder the full utilization of the new software functionality.

Change is inevitable when working on any large project or change initiative – especially with
the implementation of an ERP system. Institutions preparing for an ERP implementation
should proactively approach and manage change to improve the likelihood of success of the
implementation project and the ultimate use of the new system.
“What is change management?”
Change management is the effective management of a business change such that executive
leaders, managers and front line employees work in concert to successfully implement the
needed process, technology or organizational changes.

In thinking about how to define change management, it is important to provide context

related to two other concepts – the change itself and project management. We can define the
scope of focus for the change, project management and change management:

Element Scope of Focus

The Change Organization and Operations
Project Management Tasks and Activities
Change Management Impacted Employees

When a change is introduced to the organization, we are ultimately going to be impacting one
or more of the following four parts of how the organization operates:

• Processes
• Systems
• Organization structure
• Job roles

“The change” in an organization is initiated to move from a current state to a desired future
state, where performance is better than it had been.
There are numerous examples of the changes happening in organizations right now,
including:
- Six Sigma initiatives
- New performance review systems
- Enterprise Resource Planning (ERP) applications
- 360 degree evaluations
- Virtual work environments
- Balanced Scorecards
- Mergers/acquisitions
- Implementing a Project Management Office (PMO)

Each of these examples of “the change” has a future state they are trying to achieve. Change
management has emerged as a structured discipline that business leaders are seeing as a
‘must have’ and not just a ‘nice to have’ when major project or initiatives are launched.
Change Management Methodology

Point 1: Individual and Organizational Perspective

Change Management methodology requires both an individual and organizational

perspective.

Individual change management Organizational change management

Understanding how one person Understanding what tools we have to help

makes a change successfully individuals make changes successfully

 Organizations don’t change,  While change happens one person at a

individuals do. time, there are processes and tools
 No matter how large of a project you that can be used to facilitate this
are taking on, the success of that change.
project ultimately lies with each  Tools like communication and
employee doing their work training are often the only activities
differently, multiplied across all of when no structured approach is
the employees impacted by the applied.
change.  When there is an organizational
 Effective change management change management perspective, a
requires an understanding for and process emerges for how to scale
appreciation of how one person change management activities and
makes a change successfully. how to use the complete set of tools
 Without an individual perspective, we available for project leaders and
are left with activities but no idea of business managers.
the goal or outcome that we are trying
to achieve.

Point 2: Managing change with the single individual

The first step in managing any type of organizational change is to understand how to manage
change with a single individual. ADKAR Model is a model of individual change, an
acronym for Awareness, Desire, Knowledge, Ability and Reinforcement. In essence, to make
a change successfully an individual needs:

 Awareness of the need for change

 Desire to participate and support the change
 Knowledge on how to change
 Ability to implement required skills and behaviours
  Reinforcement to sustain the change

ADKAR describes successful change at the individual level. When an organization

undertakes an initiative, that change only happens when the employees who have to do their
jobs differently can say with confidence, “I have the Awareness, Desire, Knowledge, Ability
and Reinforcement to make this change happen.” Because it outlines the goals or outcomes of
successful change, ADKAR is an effective tool for:

• Planning change management activities

• Diagnosing gaps
• Developing corrective actions
• Supporting managers and supervisors

Point 3: The 3-step process for the project team, initiating or supporting
change.

Phase 1 - Preparing for change

The first phase is aimed at getting ready. It answers the question: “how much change
management is needed for this specific project?” The first phase provides the situational
awareness that is critical for effective change management.

Outputs of Phase 1:
• Change characteristics profile Phase 1: Preparing for change
• Organizational attributes profile
• Change management strategy
• Change management team structure Define the change management strategy
• Sponsor assessment, structure and roles

Prepare the chan ge management team

Develop the sponsorship model

Phase 2 - Managing change
The second phase is focused on creating the plans that are integrated into the project activities
- what people typically think of when they talk about change management. There are five
plans that should be created to help individuals move through the ADKAR Model.

Outputs of Phase 2:
• Communication plan Phase 2: Managing Change
• Sponsor roadmap
• Training plan
• Coaching plan Develop change management plans
• Resistance management plan

Take actions and implement plans

Phase 3 - Reinforcing change

The third phase helps project teams create specific action plans for ensuring that the change is
sustained. In this phase, project teams develop measures and mechanisms to see if the change
has taken hold, to the see if employees are actually doing their jobs the new way and to
celebrate success.

Outputs of Phase 3:
Phase 3: Reinforcing change
• Reinforcement mechanisms
• Compliance audit reports
• Corrective action plans
• Individual and group recognition approaches Collect and analyze feedback
• Success celebrations
• After action review
Diagnose gaps and manage resistance

Implement corrective actions and

celebrate success.
Connecting organizational and individual change management

The image below shows the connection between the change management tools developed in
the organizational change management process and the phases of individual change described
by the ADKAR model. This picture is the essence of effective change management and is the
core of change management methodology.

Change Management Tool ADKAR phases of change

Communication Awareness

Sponsor roadmap Desire

Coaching Knowledge

Resistance Management Ability

Training Reinforcement
PCT Model for Change Management
Project Change Triangle – or PCT Model – provides another approach for defining and
positioning change management. This simple but powerful framework shows the three crucial
elements of a successful project as corners of a triangle:

• Leadership / Sponsorship is at the top of the triangle

• Project Management is in the lower left corner
• Change Management is in the lower right corner
Organizational Changes Resulting from an ERP Project
When implementing an ERP system, institutional stakeholders are all faced with changes in
the ways in which they operate and interface with the institution. Some of these
organizational changes occur as a result of the project and others occur as a result of the new
software itself.

Change from the new software Change from the implementation

project
Business and operating processes and Staff must work across functional lines and
procedures will be changed. on teams, often for the first time.
New policies and procedures will be created. Decisions will be made across functional
lines.
New job skills must be learned. Workloads will increase during the life of the
project.
Individual job roles may change. Standard services may be reduced
temporarily.
New reporting structures may affect Staff must learn new skills while managing
individuals and whole functions. current workload.

Change management strategies for ERP Implementation

Improvement strategies such as ERP implementation, commonly involves change. Hence,
responsiveness to internal customers is critical for an organization to avoid the difficulties
associated with this change. To assist top management with the complex organizational
problem of workers’ resistance to ERP implementation, an integrated, process-oriented
conceptual framework consisting of three phases is presented below:

 Knowledge formulation
 Strategy implementation
 Status Evaluation

Knowledge Formulation Phase

The first step in effectively managing change introduced by IT is to identify and evaluate the
attitudes of individual users and influential groups. This analysis should address such
questions as:

 Who are the resisting individuals and/or groups?

 What are their needs?
 What beliefs and values do they have?
 What are their interests?

The answers to these fundamental questions may offer a good starting point in determining
the sources of employees’ resistance to the ERP system.
Strategy implementation phase

Management can use the knowledge regarding potential users from the previous stage to set
up strategies that can best overcome users’ resistance to the ERP system, and to convince as
many users as possible to adopt it. If this is the case, it is more appropriate to find an action
sheet for implementing the selected strategies. The three-level adoption process provides a
good framework for describing this phase.
Status evaluation phase

The process of monitoring and evaluating change management strategies for ERP
implementation is the last component of the suggested framework. Besides having a
performance measurement system to ensure that the desired business outcomes were
achieved, believe it is as important to have a performance system to monitor the progress of
ERP change management efforts. It is imperative that top management makes sure workers’
anxiety and resistance to ERP is under control. The status evaluation phase provides feedback
information to top management in a dynamic manner. In order to be useful, the feedback
should be timely, accurate, and systematic.

Figure: A model of Successful ERP adoption