Technology companies are notorious for believing the solutions they propose to a potential user’s pain points are the best possible answer. When it comes to ERP software systems, however, too often many developers, vendors and integrators ignore or overlook the reality that the technology they sell is actually a business solution, not simply a technology tool.

In the process of reviewing pitches and proposals from sellers, C-suite executives – including chief technology officers – need to remember that SAP, Oracle, Microsoft and all the rest are in the technology business – this is what they focus on selling. For an ERP software system to have a measurable, positive impact on an organization, whether it is installed in the private or public sector, it is important to remember that no matter how the sophisticated the software, it will still be used by people.

It is a company’s responsibility to ensure it has a plan to accommodate all of the change management aspects of an ERP software project so people are not only trained in how to use the new system, but also to understand how this system will change their jobs. This is important so that both the system and your people succeed.

However, this does not absolve the vendor and integrator from helping with the human aspect of their product.

ERP Means Change Management

As complex as an ERP software system may be, if the vendor and integrator understand the user’s business it is possible for everything to go smoothly (from a technical point of view) on the day the system goes live.

However, this is only half of the problem. The other half is understanding that the data being collected and distributed will be going to people. Since ERP means a major shift in an organization’s management, it also means a major shift in how employees work.

In many respects, the user experience with ERP is at least as important or perhaps more so than all of the coding that sits behind a terminal in someone’s office. This does not just mean easy-to-understand screens; it also means easy-to-understand work processes.

ERP change management can’t simply be handed off to Human Resources. It requires an effort that involves the vendor and integrator, as much as it does HR.

As a result, it is necessary for the contract with both the vendor and integrator of the ERP software system to specify what each entity’s role in the change management process will be. The contract provisions need to be specific, including detailing the seller’s experience in handling change management in similar organizations and sectors. If direct experience is weak in this area, it may signal a warning of other problems with the solution they are proposing you buy.

Serious Implications

Regardless of whether an organization is updating a legacy system or implementing an ERP software system for the first time, it needs to recognize it is acquiring a management solution that happens to use technology.

User experience and understanding of the human factors associated with digital transformation are as important to achieving success as is integrating the system with the organization’s existing processes and infrastructure.

As attorneys whose legal careers have focused on negotiating and drafting contracts for ERP software systems, we have advised clients on ensuring that change management is part of the process and should be incorporated into the agreement with a vendor and integrator. Executives and senior managers cannot lull themselves into thinking that the purchase decision is the end-goal of the process. Nor can they allow employees to undermine the use and effectiveness of the ERP software system because they do not grasp the changes it brings to their job or the organization.

If you have questions about the role of change management in a successful ERP software integration, feel free to call us. We would be happy to share our experience and offer suggestions.