What is ERP Change Management?

Osmand Vitez

An enterprise resource planning (ERP) system is an information technology system a company implements to help automate its internal business processes and activities. ERP change management is the specific process for implementing a new system for the first time or changing from one system to the next. This entire process involves two different large-scale operations: information technology integration and change management. The size of the company will typically dictate the ERP change management process as the system contains several different modules or sections.

An outside team of ERP consultants may help manage hardware and software requirements of an ERP changeover.
An outside team of ERP consultants may help manage hardware and software requirements of an ERP changeover.

The change management process can be done internally or externally. Internal change management will involve shifting personnel from their daily job activities to the change management team. Business owners and managers will typically select individuals who have particular knowledge of the ERP system or other business departments that will receive the new system. Large companies with intricate business operations will often use this approach, as they have the personnel to handle this process.

External ERP change management requires a company to hire a management consultant or other change management team. These individuals or groups typically have particular knowledge or expertise with the change management process. Using an outside group with ERP change management may be more beneficial since the entire process involves technical information technology hardware and software.

Installing a brand new ERP system when the company does not have a previous enterprise system is often easier than overwriting an old system. Older systems may require the removal of old software or hardware packages. Newer technology is often difficult to integrate with older systems, which can result in higher change management costs. Additionally, the older technology hardware may have little to no salvage value. Companies will often lose money if they cannot sell the old equipment.

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Implementing an ERP system typically starts with one department or division. Depending on the company’s operations and business industry or sector, business owners and managers will often start with a lower volume area. This allows the company to continue main operations throughout the ERP change management process. Errors and issues can also be swiftly corrected without too many disruptions. Employees may also be more willing to help with the change process if they feel more comfortable with the process and business owners and managers work with employees rather than around them.

Change management is not necessarily a process that ends quickly. Changes or adjustments to the ERP system in future time periods will often be necessary to ensure the company will maximize the ERP’s value. When using an external change management team, the company may need to request continued support in terms of technical or customer service analysts. This allows the company to work with the ERP vendor to correct issues and problems.

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