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Managing Organizational Change--a.k.a. Juggling

By: Jeff Carr

Jeff Carr is founder and CEO of Ultra Consultants, a research and enterprise selection consulting firm serving the manufacturing and distribution industries, headquartered in Oak Brook, IL; 312/319-1411; https://ultraconsultants.com.

Saturday, September 1, 2018
 

who how what when where whyFact: No newly deployed enterprise-technology solution reaches its full potential without a corresponding organizational change. The reason: Even the best technology solution, if not embraced by the workforce within a business-transformation scheme, operates at less than its full capabilities.

This is why forward-thinking enterprises, when deploying new ERP systems, are wise to consider three vital aspects of organizational-change management: technology, processes and people.

Only by juggling all three at the same time, can momentum develop and continue.

This momentum, which must be greater than inherent resistance to change in workplace processes, results when project teams agree on the following elements:

  • Shared need and clear reason why the status quo no longer is viable.
  • Shared view of the desired future state and a clear sense of direction.
  • Clearly defined next actions and ownership.

Organizational Change Management

The 8-Step Process for Leading Change methodology from leadership change expert John Kotter provides a useful blueprint for establishing the necessary framework for successful organizational change.

A recent project with Warren, ME-based Knox Machine Co., a make-to-order machining company, provides one example. For more than 40 years, it supplied close-tolerance machining to the defense, communications, aerospace and plastics industries. It was apparent that its legacy ERP system no longer could support the business adequately.

Knox Machine used an awkward collection of business-management tools: Excel spreadsheets for inventory control and reporting functions; various manual processes for material planning and shop-floor execution; and one accounting software for financials and another solution for quoting, order entry, purchasing, shipping and job costing.

The inevitable consequence of such a cobbled-together solution: an enterprise lacking an integrated view of the business, and having no true process flow among standalone systems. Moreover, because planning was paper-based, the system was prone to human error, resulting in inaccurate data.

Knox Machine knew that to maintain quality and accommodate growth, it would need a modern, comprehensive and effective solution. Recognizing the importance of building a foundation of trust, the first step involved management walking the plant floor and listening to employees.

The mapping phase of the project provided a clear analysis of the current state of the company’s business processes, revealing gaps and issues to overcome. Education of the workforce assumed a key part of the methodology, with exposure to industry best practices resulting in an employee consensus for change.

The team then turned its attention to opportunities for success. It defined future-state possibilities and requirements, drafted systems architecture and the project charter, and created a business scenario that helped drive ERP selection and required process changes.

Proof Is in the Pudding

Knox Machine’s organizational-change effort and deployment of a modern make-to-order manufacturing and ERP solution resulted in the following:

  • 40-percent improvement in reporting;
  • Elimination of data manipulation within the shop;
  • Reduction of time required per order from 2 hr. to 2 min.
  • Improved shipping execution, no longer having to rely on internal, personnel-based knowledge to ship products; and
  • Automated planning and scheduling, replacing manual systems.

Sound Familiar?

If your organization has outgrown its legacy solution, and invented multiple processes to work around the system’s limitations, consider an organizational change. Don’t let a home- grown system limit your efficiency, quality and ability to scale. MF

Download the case study.

 

See also: Ultra Consultants

Related Enterprise Zones: Management


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