02 Nov 2017
In this research project I will talk about the Enterprise resource planning (ERP) systems integrate internal and external management information across the entire organization business units, like sales and service, finance and accounting, (CRM) customer relationship management, purchasing and manufacturing and. ERP systems automate this activity by integrated software applications that join all these businesses unite. the purpose of ERP system to facilitate the work flow of information between all organization business functions and manage the all connections with the stakeholders. ERP systems can be running on a variety of computer technologies hardware and networks and databases. The most big and huge organizations use the ERP systems. The multinational organization uses the ERP systems to manage their branches worldwide and monitor the cash flow in and out also manage the organization performance through the ERP systems by the reporting tools. in this research I’m focusing on the Egyptian organizations because the most Egyptian organization that tried to implement the ERP system faced a lot of problems and challenges that lead to implementation projects failure.
In this research I’m focusing on the important factor of these challenges it is the Resistance of change. And described what the resistance of change is and how can the top management, the decision makers, and the project managers handle it. in the last of this research project I talked about the summary of the problem and the way to deal with the Resistance of change to reach the ERP system implementation projects success.
Today the globalization makes the competitiveness between the organizations in the entire world wide more difficult than in the past. Because as we know the entire world become as a small village. All information and news can be known in the same time of happening, and this lead to all the organizations competitors in the same filed or industry have the same opportunities in the worldwide market. Referring to all the previous information, the organization in all worldwide went to use the ERP (Enterprise Resource Planning) software to facilitate its work and the entire processes that lead to reduce time consumed in the work environment and this is reflecting to the cost minimizing. And this is the technology benefits and it must be used by all the organizations that want to compete in the global market.
Otherwise the organization should not depending on their welling to use the new technology or use the ERP system only but the organization should improve its employee’s skills and willingness to learn and use the new technology and the new ERP (Enterprise Resource Planning) system, to reach the goals from implementing and using the new ERP (Enterprise Resource Planning) system, and to get the full benefits from this system and to get the maximum ROI (Return Of Investment) because this system will be high costly to be implemented and work
The new ERP systems implementations are expected to grow by 36% over the next five years (until 2017) in the world wide with total market value up to 66.6 billion dollars, ERP systems in the world wide are represents up to 42% of organization's systems budget. (AMR Research, 2011a).
Usages are liege commensurate with high increases in the productivity. As such, the next step will touch the productivity measurement or the KPI (Key Performance indicator) issues because the Productivity is a very important thing of the economic measurement tool to measure the technology's contribution. For that, the organization top managements and the business owners going to invest in these kinds of the technologies.
Otherwise, the success or failure of the implementing new IT system in any organization referred to the change resistance management and the strategy that which will follow.
So like I mentioned before the organization must spent the time and money to learn the employees to reduce the resistance of the change and increase the productivity
1.2Â Â Â Purpose and Scope
There are many of the Egyptian organization trying to implement or thinking to implement the enterprise resource planning (ERP) system and this study will fit the requirements for whom thinking or whom going to implement ERP system and want to know how the change resistance can affect the implementation end result. Otherwise the top management in the organization that wants to implement the ERP system and want to know how the organization culture can also affect the implementation project. And how can the organization avoid the reasons that result to the system implementation failure. And what kind of strategy and actions should the organization follow to avoid the implementation project failure. The scope in this study is the effectiveness of the organization culture in the ERP implementation project and why the multinational organization can implement the ERP system easy and clearly vice versa in the Egyptian company the ERP system implementation face a lot of challenge internally in the organization.
Because in the multinational organizations there are standard policies and procedures (CI) company Identification that the organization follows and in this case these policies and procedures are settled from the Head Quarter or the mother company witch lead, control and monitor the ERP implementation project phases and results.
Importance of Study
This study is very important for whom planning or thinking to implement ERP system in Egypt because it will give them a great background and experience from the past ERP implementation projects and can know the reasons for the success ERP system implementation to be as a guide for the planners and the decision makers. On the other hand this study will show some of the real reasons that due to the ERP system implementation projects fail. I see it is a very important guide to avoid these reasons. I see also it is a very important study to the project managers whom will be responsible for the ERP system implementation projects to take in them consideration the challenges and the obstacles that will be faced in the ERP system implementation projects. Like the change resistance and how the project managers can be ready to avoid and how can they will plane to manage this resistance by give the users good training and involved the key users in the ERP implementation project phases and give the initiative to everyone (from the key users) to train his subordinates. Because it will be a good chance for the key users to be learned well and good way for future ERP users’ support, and it will reduce the user resistance for the new ERP system implemented.
And it is important to the organization it already starting in the ERP system implementation, facing these problems to assist in solving the problem or to avoid facing these in the near future
On the other hand it is very important to the ERP systems vendors and software partner. They can settle some implementations scenarios as guides to the organizations they looking for ERP system implementations. Because the ERP systems are ranking by some points like the percentage of the successes and failed implementation projects.
1.4Â Â Â Problem Statement
For many years, the ERP systems vendors and the ERP project managers have debated about the reasons for the ERP system implementation failures in Egypt. And it has been controversial because some ERP project managers see it is technological reason and the ERP systems vendors see it is people reasons. We want all of our ERP system implementations in Egypt to go to production seamlessly, without defects or fails, where everyone is aware and informed of the outcomes and its benefits. We still have too many ERP systems implementations projects in Egypt failures that result in too money and time wasted. If we ignore this problem, we will need a lot of resources to handle the cascading problems
1.5Â Â Â Research Question
1.6Â Â Â Variables
Contingency variables
ERP Adaptation.
Process Adaptation.
Organizational Resistance.
Organizational fit of ERP
Data fit.
Process fit.
User fit.
ERP Implementation Success
Cost.
Time.
Performance.
Benefits.
(Research model figure 1)
As we see in this figure the project variables are divided to:
Independent variables and it contains the organizational fit to the ERP system by the data fit, process fit and the user fit to the ERP system requirements.
Moderators’ variables or the contingency variables and it mean the ERP adaptation, organization process adaptations and the organizational resistance to the ERP system.
Dependent variables are the end results success or fail with the project time and budget with the required output performance and benefits.
1.6.1Â Â Â Â Â Â Â Â Â Â Independent
Organizational fit of ERP
1.6.2Â Â Â Â Â Â Â Â Â Â Moderating
The ERP adaptation, the process adaptation, and organizational resistance.
1.6.3Â Â Â Â Â Â Â Â Â Â Dependent
Implementation result (success or fail)
General ERP
The ERP (Enterprise Resource Planning) system are defined by many ways depending on the definers for example the organization’s top managements define the ERP (Enterprise Resource Planning) implementations success or fail from the output performance results that the organization get after the implementation project, otherwise the ERP (Enterprise Resource Planning) vendors and partners define the ERP system implementation success or fail depending on the analysis has been taken in the beginning of the project and are the ERP system cover these analysis or not. From the project managers or the project responsible person side the success or fail for the ERP system implementation project. Are the implementation project finished in the planned time and cost and we get the planned goals or not.
And those are the most famous five ERP systems vendors in the worldwide.
SAP ERP.
Oracle ERP.
Microsoft ERP.
Siebel ERP.
Infotech
From this point, the points of view for all the involved characters (top management, project manager and the users) in the Enterprise Resource Planning project implementation should be consolidated before the implementation project star, to guarantee the required results and to work to achieve the same goals from all involved persons in the project.
The ERP (Enterprise Resource Planning) project is very costly, so the organization should prepare itself before starting the implementation project to avoid the fail and money losing. The organization should take care for all the project elements and should focus on the success factors that I will take about in the next pages.
From the previous information we can say the ERP (Enterprise Resource Planning) system is an integrated system that can contain all the organization business unites and departments and can integrate their process and functions in one cycle and make a workflow to facilitate the work between these business unites and departments. For example:
When the organization want to purchase something to the production department by using the ERP (Enterprise Resource Planning) system it will going in these process starting from the production department send a purchase request (PR) on the ERP system and automatically it will forwarded to the procurement department that will create the purchase order (PO) and the ERP system will recommend the vendors from the vendor list and when the vendor will supply the required items it will be added to the inventory and the invoice cost will be add to the credit balance for this vendor witch will appeared in the financial department to give the vendor his money, all these steps will done automatically with the mentioned sequences in just some seconds with zero error.
To start in the ERP project implementation we should build a team to be responsible for this project. This project maybe contains the Chief Executive Officer, Chief Operation Officer, Chief Information Officer and the business Development manager. This project will be full responsible in all the project phases starting from Diagnoses phase passing Analysis phase, design phase, Development phase, Deployment phase and Operation phase. These teams have a different experiences and privileges to facilitate the project implementation processes and to be able to solve any facing problem.
For example: to focus on the project team importance. There is an Egyptian company went to implement an ERP (Enterprise Resource Planning) and the company create a team called ERP dream team this team contains CEO (Chief Executive Officer), CFO (Chief Financial Officer), IT Director, and the project manager. This team has much level on the authority and privileges and support fast decision making that help them to solve any problem faced the project if it was technical or financial problems. And these factors lead the ERP (Enterprise Resource Planning) to success.
Many organizations faces the centralization decision maker and it lead to time consuming in the paper cycle and cycle for approvals and it reflect on the project time plan, which lead to schedule not followed and the cost will increase because the ERP (Enterprise Resource Planning) project calculated by the man day, this man day will translated to money. If the project exceeded the project scheduled plan it is due to increasing in man day numbers and money increasing and the final result will be the fail the ERP implementation project. So the decentralization will increase the project efficiency and will increase the success probability.
Whoever the ERP vendors in the worldwide recommend some factors for the organization that thinking or going to ERP implementation project and it prefer to get the ERP implementation process success the organizations (Clients) should assign a project team before the project starting date another recommendation is the team project have to agree with the top management about the project goals and the project output and these points must be knowing to each user or department that will be affected by this project (ERP project) and the organization top management should encourage all the affected employees with the ERP system by the money and moral, the top management should reassure the organization employees about their job positions, salaries and benefits.
Those factors are lead to the ERP system implementation project success as the organization planning to do. But if we didn’t imitate these it will lead to didn’t achieve the required goals from this project. And those factors are the subject to the researchers’ studies since a long time to get the fact for the ERP implementation projects failure are it a human factors that lead to the hole project fail or it is a software or system factors.
Some researchers go to the theory that said the human refuse the any changes by the human instinct but there are another studies going to deal with this instinct and manage it to accept the change, this is the human science.
All the time until now many researchers has been finding that because there are much kind of different characteristics in the same organization will spend more and different effects in different environments. The researchers are focusing on some specific fitness.
Henderson and Venkatraman (1993) ascribed the reasons of why the most of the IT department budget investment fails to make the IT department strategy be aligned with the organization strategy. For that reasons strategy model has been developed to be sure it is fitness among to the organization strategy, information technology and communication department strategy, fundamental structure and process of organization. That ERP system is a type of applications software used to integrate all organization process of each business unites in the entire organization. And if there is a big dependency between some different businesses unites of an organization. The ERP system will much fit all the requirement of the organization general process. Vice versa the contradiction between the processes of each business unites and ERP software will minimize the integrity between ERP system software and the operation requirement of organization. Referring to that the unfitness of ERP system software resulted from the specific business unite process and requirement of one organization, and more requirement cannot be well cooperate with the functions and options that provided by ERP software system. And referring to that if there are incompatible integration problems between organizations, it is because that the organization and the ERP system software manufacturer have different focuses and concepts. The researches results in this matter described in previous paragraph can encourage that the organizational fit of ERP system is one of the key factors to the success of ERP implementation. And developing the research for successful ERP implementation from the organizational point of view fit, referring to that organizational fit of ERP it have a great influence on the successful implementation of ERP systems application software. The main key Factor for ERP Implementation success is that the organization should select an ERP system that is suitable for the organization business processes type. When the organization is need to make some customization because its own unique business process is not supported by the ERP system, such customization can be either a customization of the business process of the enterprise or the make a new software package. Customizing the organization business process is a preferable choice. In Egypt we thought the relation of organizational fit may be worse because all the ERP systems in Egypt are structured based on European and American business process. Which is totally different from that of Egypt? The compatibility between ICT department and the user is also a key success factor for ERP implementation project.
the process adaptation in order to use the ERP system, the organization should mitigate its business process and the management technic according to the requirement of ERP system software, so that the expected goals can be achieved. if we need to apply the optimal practices solution, the organization should to adapt the business process, this should increase the necessity of business process reengineering (BPR). Business process reengineering assist in redesign the organization business process based on the first fundamental analysis in order to improve the organization performance.
As mentioned previously, top management is one of the important factors in the implementation of the ERP system’s success or failure. This research has focused on the implementation phase of the ERP system implementation project because the high failure rate of ERP systems being implemented and the high costs of these failures. report that ERP failure rates remain in the 67%–90% range. 35% of ERP implementations project are cancelled, with the remaining 65% of them resulting in cost and scheduling overruns averaging 178% and 230%, respectively. Mabert, Soni and Venkataraman (2001) estimate implementation costs range from tens of millions of dollars for medium-sized companies to $300–$500 million for large, international companies. Researchers have also proposed phase and process models of ERP implementation and identified top management strategic work actions within these different implementation phases (e.g., Nah et al., 2001; Shehab et al., 2004; Yu, 2005). One of the underlying hypotheses I’m using in this study is that if ERP implementation is a process then a process contains a series of sequential steps, whereby the first step that affects the succeeding steps Consequentially, if the top management indicate the two specialized areas of work expertise i see in the first phase of implementation, their successful work in this phase will transfer directly to the latter implementation phases and increase the chances of having a successful ERP implemented system. It is also important to recognize that the top management follow one of the two strategic actions is being asked to concentrate on in the beginning or the starting phase of ERP system implementation will have had its first preliminary work in previous non implementation phases of assimilation such as the chartering phase.
Resistance to change is the act of opposing or struggling with modifications or transformations that adjust the current status in the workplace.
To deal with the resistance to change it is a big challenging because the Resistance to change can be overt or can be covert to both individual and organization. Employees can recognize that they don't like and don’t want the change to be done so the employees Resort to resist publicly and verbally. Otherwise the employees can just feel insecurity for them jobs so they resist the change, sometimes the resistance to change is unknowingly through the actions the users are take, like the talking methods that use to describe the new change or the stories or the conversations that the employees share about the new system in the workplace.
Whatever the way of the resistance to change happens, it is really threatens the success of the new system implementation project. The Resistance of change is affects by inverse relationship the speed at which an implementation for the new system is adopted. The worry of changes affects the employee’s opinions and feelings at all phases of the implementation process. Also it is affects quality, productivity and relationships.
How do we detect on the resistance to change in the workplace? Listening to the gossip and the attitude of your employees. That does appear when the employees are more absenteeism or missing the meetings that related to the changes. The delaying and poor assignments that related to the change subject and forgotten commitments these are all signs of resistance to the change. We have to Listening to employees talking about the change in conversations can told us a lot information about resistance to change. Some organization employees will challenge and resist the change. The more powerful and increasing in the resisting from the employees side, in terms of job position, job title and longevity. It reflects to more success the employee will have with resistance.
Resistance to change is appear in employee’s actions like verbal criticism, failure to adopt, sarcastic remarks, side comments, failed commitments, missed meetings, lack of support verbally, interminable arguments, and the absenteeism. Resistance to change can increase if the employee not feeling he has been involved in changes more enough, top management should support to gain the targeted results.
Resistance to change is a natural human reaction when employees are affected by changes. Change is unacceptable and requires some new way of thinking and doing in workplace. People have a big problem in imagining the vision of what is the life will look like with the new effects of the change. So they keep an eye on to be with the known rather than to be with the unknown. Change always produces the anxiety and the uncertainty for the employees. The employees may lose their feeling of work security. For this reason they may prefer and like the current status. Verses the change to new or unknown status. There are some sort of reactions when changes are introduced, huge and are unpredictable. Every employee will be affected in new changes.
As a result of that resistance to change is often occurs after change is introduced in the workplace. Resistance to change is viewed as a normal human reaction in any work environment even if the most supportive employees and cooperative employees may experience resistances. So when you introduce the change you should to believing in that you will experience resistance or that resistance will be very hard.
in the way of introducing the resistance of change you have to believing that your employees want to cooperate and make the best of each actions and the employee will fully support all the changes as time will goes by. In your approach and your thinking you can affect the level to resistance of change is deeply. And you can reduce the natural resistance to change by the some actions you can take and how can you involve the employees whom will be affected by change. In the change process and in the good case and in the best scenario every employee has the chance to talk about the impact the change and provide input to manage the resistance of the change. Rationally these actions are depends on how big the changes are and how many employees the changes will affect. In the organization-wide change effort.
For example the employees share with the input about how to implement the changes at the departmental level, not about making the changes in the first workplace. These recommendations are made for all world wide of managers, team leaders, supervisors and employees who are asked to change something or who are asked to change everything but periodically at the workplace. You may not have the required input into the direction chosen by your executives and top management or you may have it. And you are expecting to make the changes in the organization and deal with any resistance to change that you may facing you along the way.but you can reduce the employees' resistance of change by taking these recommendations.
These recommendations can help you to eliminate and reduce the resistance to change that we create as we begin in changes. This is not be guide to you for managing resistance to change, but implementing these recommendations will give you a head start.
Whatever where is the change was originated and change can be showed up at any place in the workplace, and it may be originating with you. You should own the change by yourself. This is your task responsibility to implement and manage the changes. You can only one who can do that in effectively way under one condition if you plan how will you manage the change in the implementation with the employees influenced by you in the organization.
You have good opportunity to tell top managers what you think. And you spoke loudly to the focus group. So you can present your recommendation with information and examples to the project team. The project manager and to the department team leader have chosen. Then it’s the time for change to be move on and ready to make. Once the decision is taken with the deferent direction you need, the time is over. Whatever disagree or not the group, the team decides or the organization to move on, so you need to do your best to make the final selected direction succeed.
Even if you don't support the selected direction, but once the direction is the final direction that the team or group select it you should support it. Weak support is going to undermining all the change efforts. If you unable to deal with the new fact that the chosen directions are not as you want to be going. You can at least deal with the fact that it is the fact that you will support it. So, once any direction has been chosen. It is your job role to make it done.
If you are consider being honest and your employees will trust you and they will feel loyal to you. Employees should be likely to get onboard to deal with the change as fast as you can. So you have to spend more time and efforts in building this type of the relationship between you and the organization employees because this will serve you well during change. Because they will serve you well at work in everything and especially during the hard times like stress times and change this is the important thing.
There is no doubt; you have departmental colleagues, reporting staff, and employees whom you must communicate for the change. The method that you use to communicate the change to people you influence is the important impact on how resistance to change will happen. If you communicate the change clearly, you will win the minds and the hearts of employees.
you have to know one of the important key factors in reducing the resistance of change is to implement the change in an environment which belief that the changes are needed. For that one of your important tasks in effective communication with the employees is to build the reasonable case for why the changes were be must. If the rationale reasons were not clearly communicated to you or you are not clear about the main reasons for the change you will not be able to convincing others. So you have to consult with your project manager firstly.
You should inform the organization’s members about what your group can and what cannot affect. You have to spend more time in discussing how to implement and how to manage the changes and make it done successfully. The organization that you are member in it and going to make the change work successfully. You have to ask the employees to share with you in that matter because only the teams can make the changes happen not individuals. You have to stress that you have skills, knowledge and strengths that can help the team to go forward in the change and this applies to each of team members.
An big part of the resistance to change is disappears when employees are becomes clear about the benefits that the change will make them as group and the benefits to individuals, all the departments and the organization must be oriented to make it clear. But I see there is no nothing will be more important to an individual employee than to know and to be sure the benefit on their career path or job.
Otherwise employees must feel with the commitment for that, energy, time and focus are all necessary to implement the required change are compensated by the benefits they will win from making this change. customer satisfactions, a pay raise, increased sales, saved time, more effective, productive employees, recognition from your boss and a new role or project all these are examples of some methods in which you can help organization's employees feel compensated well for them to spend energy, focus, time, change and challenges that they will facing to deal with change.
You can expect that employees will face the same range of thoughts, agreement, emotions and disagreement that you will experience when the changes will introduce to you or when you participate in creating the changes itself. And never discard an employee's response to even the simple change. And you can't know or expect the impact of the change from an individual’s point of view. The change maybe seems low influence to some organization’s employees but the change will strongly impact another employee's task. You have to hearing the employees well and letting the employees express their point of view in change in a nonjudgmental workplace environment will reduce they resistance to change.
Controlling the employee’s jobs is one of the factors that employees want from working in the organization. So this control expected to be follows when you mentioned to minimize resistance to change in the workplace. Give the employees control in any work aspect of the change they can manage it. If you have communicated clearly, you have provided the rationale, the goals, the direction and the parameter that have been ruled by your organization. In this matter your job task is to encourage the employees to make the change work successfully. Practice effectively and give delegations and set the right way which you need to get the right impact for the change effort.
You must make an open line of communication through the organization to make sure that the required feedback reaches the mind of the employees that leading to the charge. Changing the courses or details, tweaking and continuous improvement are natural and expected as a must of any organizational changes. Most of the changes are not the same standard steps but there is must be a willingness and acceptance to examine the development (plan - do - study - act). If we trying to implement our change in an organization environment that is focus on employee oriented with more transparent communication channel and a high level of trust, we have a lot of advantage. But in the most supported environment, we should understand and respond well to many factors of human responses and emotions that are selected during change time.
Figure (1) shows the proposed model that referred as the conceptual of the ERP Success Model. And as we discussed in the previous sections the success of ERP systems can be classified into two categories:
The success of ERP adoption. And, The success of ERP implementation.
It means when the organization go to adapt itself (work structure, policies and procedures) this will lead to system implementation success
The adaptation level is manly effect the success ERP implementation. Because there are some point can be
Some of its organizational processes adapt to fit the basic business practices other organizational components and their interactions must be changed together.
It emphasizes the need to take account of the management of organizational change.
Change management is the most critical source of BPC implementation.
Organizational fit of ERP will be more strongly associated with ERP implementation success
Affect most of the company's business functions.
Influence users directly.
Change in the job content.
Uncertainty of the new system.
Force involuntary changes.
Frequently lead to different power and resource allocations.
Organizational fit of ERP will be more strongly associated with ERP implementation success.
This research has shown that the human factor that is operator/user of the technology's refusal to wholly adopt the technology and to fully utilize the potentials of the technology is important issues in implementation of changes in any kind of companies. To overcome this problem, the management must be embarking on a structured program to educate / train the users about the potential benefits of the new ERP system. This may in many ways reduce the probable resistance that could arise and enhance the likelihood of a successful implementation.
Resistance to change is an important and essential factor it must be considered in any change process. The right management of resistance is the key for change process will success or failure. From the resistance to change we know any problem that retard or fail the process at its beginning or in development, targeting to keep the current situation without changing. so we will grouping the concepts of resistance and inertia as a similarity. In the literature review I used many studies that talked about resistance to change. In the empirical research, this research has been supported by many Egyptian companies that undergoing a change process.
Furthermore this research has been assisting me to know the sources of resistance to change. My suggestion that these are the most significant issues manager that leading a strategic change process should be aware of some important points like:
Can the change manager do something to be able to deal with those sources of resistance? There are no standard advices to avoid resistance to change. However I would suggest that managers should pay very high attention to some topics, these topics are:
First, you should reduce resistance caused by old values, you should consider the organizational culture fits with change needed and what are the actions could be done to reach such fit before the change process. This cultural factor would also help to make management and employees more interests closer to avoid organizational silence.
Another important key factor in change process is the training. Training would be a best tool to avoid communication difficulties and thus avoid resistance. And to help in narrowing the gap between the current situation and the capabilities required for the change process to success.
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