ERP – Getting from Here to There with Organizational Change Management

Session #25045March 11, 2008

Alliance 2008 ConferenceLas Vegas, Nevada

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Overview

Delaware’s ERP history Organizational Change Management

(OCM) – what is it? Creation of the State’s OCM Team Project Management processes

integrate with OCM processes OCM processes and tools for

success

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State of Delaware ERP Systems

ERP Systems In Progress Implemented

PeopleSoft HCM V8.8 (HR/BA/PR/TL) X

eBenefits XPeopleSoft HCMV8.9 XComponents of Pay V8.9 X

Time & Labor 8.8 X X

PeopleSoft Financials V 8.9 X

Payroll Human Resources Statewide Technology

PHRST

Delaware

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Delaware’s ERP Background

State of Delaware 71 Organizations

35 State Agencies 19 School Districts 17 Charter Schools

36,000 Employees 12 Unions Represented

37 Different Locals

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1990’s — Various False Starts July 1999

PeopleSoft Human Resource Version 6.02 implemented

Benefits Administration & Payroll — Unsuccessful

Rolled back to Mainframe Legacy System

1990’s

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August 1999 – February 2000

Project managed by consultants Low team morale Multiple project plans to ‘fit’

budget Production support for Human

Resources Chain of command – multiple

reporting structure

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March – December 2000

Became a ‘state – managed’ project

Acquired additional state resources

Rearranged project team Added full time Change

Management team Single reporting structure

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December 2000 – July 2001

Change Management Team formed Strategy developed Prepared (readied) State Organizations End-User training (1300+)

Successful HR (V6.02 to 7.51) Upgrade & Benefits/Payroll implementation

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ERP Lessons Learned

High – level commitment Acquire “Best of the Best” state

resources Avoid modifications – re-engineer

1st Visionary Change Management Production support project plan

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PHRST Upgrade V7.51 to V8.8

Client Server to Web based Not much functionality change One year timeline

Planning began in April 03 before actual funding July 1

Tremendous change to look and feel! Internet education

Go live was a non-event!

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42% Leadership 27% Organizational &

Cultural Issues 23% People Issues 4% Technology Issues 4% Other Organizational issues left

unchecked often lead to project failure

Why ERP Implementations Fail

Source: Organization Dynamics, Jim Markowsky

Department of Technology &

Information

Office of Major ProjectsOrganizational Change Management

Team

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State Agency Transformation

Governor & General Assembly established new agency The Department of Technology &

Information Office of Major Projects

Chief Program Officer Project Management Team Organizational Change Management

Team

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State CIO

Chief Program Officer

Project Management Team

OCM Team

Enterprise Architecture

Team

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Project Management

Project Initiation

Project Planning

Project Executing

Project Controlling

Project Closing

Change Management

Managing Change-Planning

Managing Change-Execute

Preparing for Change

Monitoring Change

Transition

Process Integration

Organizational Change

Management

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Change Management Team’s Mission

Provide the structure and guidance necessary to effectively prepare organizations for the successful acceptance of cultural change in order to achieve their business strategy.

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What is Organizational Change Management? Definition

The organized, systematic application of knowledge, tools, and resources of change that provide organizations with a key process to achieve their business strategy

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Organizational Change Management Objectives

Provide awareness Ensure understanding Facilitate acceptance Care, listen, and respond Manage people’s expectations Ensure readiness Champion the project

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Greatest Success Factors

Active and visible sponsorship Use of organizational change

management processes & tools Effective communications Employee involvement Effective project leadership and

planning

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Greatest Obstacles

Resistance from employees and managers

Inadequate senior management & sponsorship

Cultural barriers Lack of change management

expertise

Project Management & OCM

in Delaware IT Projects

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Preparing Process

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Assessing the Organization

Project Assessment questionnaire Organizational traits Change traits Plot the project on the Risk

Determination Table

Stakeholder Analysis

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Risk Determination Table

Modified from Prosci Change Management Toolkit

Assessing the Organization

Medium-High Risk

Low Risk

High Risk

Medium-Low Risk

12 24 60

Change Traits

110

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Organizational Traits

Small incremental change to a change resistant organization

Large Disruptive Change to a Change Resistant Organization

Small incremental change to a change-able organization

Large Disruptive Change to a Change-able Organization

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Stakeholder Analysis

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OCM Tailoring

Based on answers in the assessment

Determines which tools to use Sponsor roadmap Coaching plan Readiness methodology Training Strategy

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Change Management Team Model

Sponsor

Project Team

Communications Coordinator

Change Management Specialist / Readiness

Lead

PROJECT INITIATION

ExecutiveSponsors

Project TeamChange Management

Project Lead

Communications Coordinator

Change Management

Coach

Change Management

Coach

Change Management

Coach

Change Management

Coach

Gre

en

Team

Yellow

Team

Blu

e

Blu

e

Team

Team

Red

Team

ProjectDirector

ERP Team ModelState Orgs.

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Managing Planning Process

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Provides Recommended change management

team structure Sponsor Activities Communication Plan Readiness Methodology Training and Coaching Plans Resistance Management Plan

Comprehensive Organizational Change Management Plan

ComfortComfort

UnawareUnawareDenialDenial

AnxietyAnxiety

InsightInsight

What is happening?

What’s in itfor me?

What will I do differently tomorrow?

How do I prepare?

How do I staymotivated?

Organizational Change Phasesand Communication

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Communication Plan

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The majority of messages should

come from the CEO and the direct

supervisor

Who Should Deliver the Messages?

©2005 Prosci Best Practices in Change Management

Executive Manager

11%

Senior Mgmt11%

Department Head9%

Employee's Supervisor

31%

CEO/President25%

Change MgmtTeam Member

7%

Change Mgmt Team Leader

6%

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Executive Manager

11%Senior Mgmt

11%

Department Head9%

Employee's Supervisor

31%

CEO/President25%

Change MgmtTeam Member

7%

Change Mgmt Team Leader

6%

•The current situation and rationale for the change

•Business issues or drivers that created the need for the change

•Competitive issues or changes in the marketplace

•What might happen if the change is not made

•Vision of the organization after the change is made

•Overall timeframe

•Alignment of the change with business strategy

©2005 Prosci Best Practices in Change Management

Who Should Deliver the Messages?

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•The impact on daily activities

•Why employees want to go along

•Job security

•Specific ways they are expected to aid the change

•Resources for assistance and ways to provide feedback

Executive Manager

11%Senior Mgmt

11%

Department Head9%

Employee's Supervisor

31%

CEO/President25%

Change MgmtTeam Member

7%

Change Mgmt Team Leader

6%

©2005 Prosci Best Practices in Change Management

Who Should Deliver the Messages?

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Information Sheets

FACT sheets - awareness Impacts/Info sheets Training information Coaching information Count-down to system

implementation

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Information SheetsAwareness Info Sheet Coaching Info Sheet

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Communication Tracking Spreadsheet

Communication Title Media Date Sent Sent from and to

Organization/Team Phone Email Address

Follow-up Needed Yes No

Type of Follow-up Needed Meeting Phone call Email Other

Comments

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Managing Executing Process

“Readiness”

Preparing/Tracking/Reporting

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OCM Readiness Methodology

All Project Teams

INPUT

Functional Impacts

Successful System Implementation

End Users

Readiness Checklist

Master Readiness Tracking Spreadsheet

Functional Impacts Documentation

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Readiness

Tracking, Measuring, and Reporting Functional Impacts Spreadsheet Master Readiness Tracking Spreadsheet Readiness Checklist On-site Tracking Station OCM Status

Executive Sponsor Readiness Reporting

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Functional Impacts

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Master Readiness Tracking Spreadsheet

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Readiness Checklists

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Executive Sponsor Reporting

Training

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Training

Assure training steps are in place

Training strategy Training Plan Training Design Materials

Coaching

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Customized Coaching Plan Prepare managers and

supervisors to coach their employees through the change

Coaching Plan

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Transition & Monitoring Processes

• Knowledge transfer• Collect & Analyze

Feedback• Lessons Learned

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Transition

Develop Transition plan

Plan to train organization resources

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Transition Ownership toBusiness Owner Knowledge Transfer Plan

Identifies required skills by project team role

Assesses current skills Develops an agreed upon action

plan and milestones Re-assesses semi-annually for life

of project

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Monitoring Change

Survey End Users Post implementation

Three months Six months One year

Monitor Help Desk Training

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Reinforcing Process

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Collecting, Reporting, and Analyzing Feedback

Work resistance plans Celebrate!

Milestone successes Implementation successes

Reinforcement

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Integration is Key

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Achieving Successful Organizational Change for ERP Projects

Dedicate resources to Organizational Change Management

Secure visible executive sponsorship early in the project

Repeat key messages early and often Involve employees in the change process Work with the PM from the beginning and

plan your change strategy together

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Change Management Team

Tracks, measures, and reports readiness

Identifies critical roles and individuals to act in these roles

Plans for change and manages it as a process

Assesses organizational readiness

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Change Management Team

Educates individuals about change Communicates in a clear, honest,

open manner Demonstrates commitment through

active involvement and role modeling

Solicits sponsor involvement when necessary

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State Of DelawareWilliam Penn Building801 Silver Lake BoulevardDover, DE 19904-2407

Pamela M. WatersOrganizational Change Management Team

Leader Voice: 302-739-9815Fax: 302-677-7073

Email: Pamela.Waters@state.de.us SLC: D-410

Q & A

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