The Tipping Point of ERP Systems
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Enterprise Resource Planning (ERP) Archives
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May 3, 2011 8:15 AM
“The Tipping Point” by Malcolm Gladwell is one of my favorite books of recent. In case you haven’t read it, the premise of the book is to provide sociological and sometimes non-conventional ways of explaining why change happens. For example, he cites a theory that the decrease in crime in the US during the 1990s had more to do with Roe vs. Wade than it had to do with increased law enforcement efforts. In short, the author examines why and how changes happen in general.
When I first read the book, I began to wonder if the same concepts applied to ERP systems. After all, Panorama regularly works with clients that have generated strong biases for or against particular ERP vendors based on a number of factors during their software selection processes. In cases where an ERP software has already been selected, companies and their employees typically reach a tipping point to either accept the ERP system or resist it.
Let’s start with the first case. A client has an existing ERP system and is evaluating potential options to replace that software. In many cases, end users have already developed an overwhelming impression that the old system doesn’t work. Perhaps it was poorly implemented, employees were not adequately trained, or the company’s underlying business processes were broken. Regardless of the precise cause, it more of than not has little to do with the software itself. However, those underlying problems can be enough to cause employees to reach a tipping point that leads them to conclude that the existing system won’t work under any circumstances and that they need a new one. The system may in fact work just fine with some minor, inexpensive, and low-cost enhancements, but a tipping point based on other perceptions is reached nevertheless.
Similarly, when we guide clients through the software selection process, employees involved in the evaluation of potential systems often reach a tipping point in their impressions of the contenders. Perhaps a demo went extremely well or maybe the employees connected with the personalities of the sales team. In any case, the tipping point may have been caused by subjective or irrational reasons. This is one of the reasons our ERP selection process is designed to neutralize these potential factors and facilitate a tipping point on more rational and business-centric reasons.
In the second case, when a company is implementing a new ERP system, employees often do not accept or reject a new system right away. How well or how poorly a company facilitates organizational change management, communications, and training activities as part of the implementation will determine how soon and how strongly employees will accept or resist the new system. Obviously, the goal of an effective organizational change management plan is to ensure that employees reach a tipping point of embracing new business processes and business benefits sooner rather than later.
So what are the lessons here? First, organizational change management is instrumental to ensuring that a tipping point is reached, either during the evaluation of potential ERP vendors and/or during the implementation of the selected software. Second, it is important to separate fact from fiction and business rationale from more emotional criteria during a software selection process. This can be accomplished via an independent review and validation of either your existing software or potential options that you may be considering. Once a tipping point is reached, it can be very, very difficult to turn the tide in a different direction, so it is helpful to facilitate the tipping point in a way that makes sense to your organization.
Originally posted on 360º ERP Blog
| Blogger Profile: Eric Kimberling | |
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With over fifteen years of consulting experience, Eric Kimberling has a wide range of professional expertise in companies ranging from the SMB market to large corporations. Eric’s background includes extensive ERP software selection, ERP organizational change, and ERP implementation project management experience. Twitter: http://twitter.com/erickimberling Linkedin: http://www.linkedin.com/in/erickimberling |
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