14.

Consultants, Vendors and Employees

Enterprise Resource Planning (Second Edition) By Alexis Leon (2008)

ERP Vendors
Vendors are the people who have developed the ERP packages. They are the people who have invested huge amounts of time and effort in research and development, to create the packaged solutions. Choosing the right vendor and the right ERP package is one of the most critical tasks of ERP implementation. Vendor selection is not a popularity contest and bigger does not always mean better. While selecting a vendor the factors like track record, quality of the product, the financial stability, longevity, after sales service, contribution in implementation, training, and maintenance should be considered. The vendor should supply the product and its documentation as soon as the contract is signed. Once the contract has been exchanged the vendor will guide the company through a series of events culminating in the use of the tool. The vendor is responsible for fixing any problems that the implementation team encounters in the software. Another role the vendor has to play is that of the trainerto provide the initial training for the companys key users, people who will play lead roles in the implementation of the system

Enterprise Resource Planning (Second Edition). Copyright 2008, Alexis Leon. All rights reserved.

ERP Vendors (contd.)

Vendor training should achieve the goal of showing the key users how the package works, what the major components are, how the data and information flow across the system, what is flexible and what is not, what can be configured and what cannot, what can be customized and what should not, the limitations, the strengths and weaknesses, and so on. The objective of vendor training is to show how the system works, not how it should be implemented. The trainees should use these training sessions to question the vendor on all aspects of the system. The project manager should monitor and control the costs incurred by the vendor. Problems and bugs should be brought to the vendor's attention for resolution, for which there should be a provision within the contract regarding the withholding of payment. The vendor should supply the product and its documentation as soon as the contract is signed. The vendor is responsible for fixing any problems in the software that the implementation team encounters. The ERP software might have to be customized to suit the companys needs. Customizing means altering the product so that it is suited for the companys purposes. It is the vendor who is responsible for the customization.
Enterprise Resource Planning (Second Edition). Copyright 2008, Alexis Leon. All rights reserved.

Consultants
Business consultants are professionals who specialize in developing techniques and methodologies for dealing with the implementation and the various problems that will crop up during the implementation. A consultant's success depends upon a number of factors including computer literacy, conceptual skills, software knowledge, industry knowledge, maturity, problem-solving capability, communication skills and organizational skills. Thus, consultants are people who have made the business of ERP implementation their business and have invested huge amounts of money and manpower for that purpose. Consultants provide three general categories of servicesmanagement, application and technical. 1. Management consultants focus primarily on the function of management as it relates to the organization of resources and business process flows. 2. Application consultants focus on the process of communicating, teaching, demonstrating and configuring software for the business process flows. 3. Technical consultants deal with technical issues such as database conversions, source code modifications, communication protocols, operating systems, software installation, hardware systems and integration programs.

Enterprise Resource Planning (Second Edition). Copyright 2008, Alexis Leon. All rights reserved.

Consultants (contd.)
Consultants are responsible for administering each of the phases of the implementation so that the required activities occur at the scheduled time and at the desired level of quality and with effective participation of all those who must participate. Consultants bring know-how about the package and about implementationknowhow that is not included in the standard documentation. This know-how (also known as practical knowledge) is derived from their expertise, which stems from practical experience. By eliminating the trial and error method of implementation and doing it right the first time the consultants help in saving huge amounts of money, time and effort. It is the duty of the consultant to understand the total context and scope of the envisioned work and to know when to alert the company management about actions and decisions that must be undertaken so that the job will not be compromised and the implementation will not be jeopardized. Maintaining technical documentation on the project also falls within the duty of the consultant. The consultants should create a knowledge base and should train enough people so that the work they have started is continued.

Enterprise Resource Planning (Second Edition). Copyright 2008, Alexis Leon. All rights reserved.

Importance of Employees
ERP implementation is not a technology or process projectit is a people project. To succeed during and after implementation, the ERP system needs full and complete support of all the end-users of the system. With the implementation of the ERP system the old job descriptions will change and the nature of the job will undergo drastic transformation. So, there will be fear of the system replacing existing jobs, as many functions will be automated. Also people will be afraid of the amount of training they have to undergo and learning they have to do in order to use the new system. If these fears are not addressed and the fears alleviated well in advance, then it will be asking for trouble. While the ERP systems eliminate many existing jobs, it creates many new onesones with more responsibilities and value addition. If the company can succeed in making its employees accept the fact that ERP is good and even after switching to the ERP system the jobs will be there and the management will do everything to train the employees and make the transformation easy, then employee resistance can be eliminated.

Enterprise Resource Planning (Second Edition). Copyright 2008, Alexis Leon. All rights reserved.

Reasons for Employee Resistance

Implementing an ERP system is a change and it is human nature to resist change. All ERP implementations will face some amount of resistance. The main reason for this resistance is fearfear and uncertainty about what will happen. ERP systems introduces new procedures, automates existing one and brings about changes of sweeping magnitude. In the case of ERP implementations, change is happening faster that most people care to think about. In fact, change is happening faster that most people care to accept. It is human nature to resist change and fear the unknown. The main reasons for the resistance towards change are fear of failure, fear of being redundant and fear about the uncertain future. 1. Fear of being Redundant - The biggest fear shared by people in companies going in for ERP implementation is the loss of their job. 2. Fear of Failure - Another fear that must be addressed in the planning phase is how to handle people's fear of failurethe fear of not understanding or being able to work within an automated environment. 3. Fear of the Future - Openly discussing and announcing the purpose of implementation and what it means to the employees of the firm can help to address the fear of the future. Without a feeling of confidence that things are going to be good, they may never try it at all!

Enterprise Resource Planning (Second Edition). Copyright 2008, Alexis Leon. All rights reserved.

Dealing with Employee Resistance

If employees are not convinced about the importance of the ERP system and the benefits of using it, they will not be fully co-operative. This can result in the failure of the system. It is very important therefore, that users be won over before implementing the system. Some of the techniques used to deal with employee resistance are: 1. Training and Education - One main reason for the resistance is ignorance. So people should be told in advance about the ERP implementation, its implications, advantages and how the job profiles will change and the company is planning to ensure that the employees are trained so that they can get better opportunities and jobs in the new system. 2. Creating ERP Champions - Another method of reducing resistance is by creating champions. One of the most efficient ways to transition to new technology is to find a well-respected potential user of the technology. 3. Pilot Projects - Implementing the ERP system in a pilot project is a good idea because it minimizes the risk of failure. A successful pilot project is a morale booster for the implementation team and a good marketing tool.

Enterprise Resource Planning (Second Edition). Copyright 2008, Alexis Leon. All rights reserved.

Dealing with Employee Resistance (contd.)

4. Involve Employees in ERP Process - The more involved employees are in the ERP decision and implementation, the more ownership and buy-in they will have into the project. 5. Address Issues of Fear, Uncertainty and Self-esteem - Each and every one of the levels within an organization must be addressed in overcoming resistance to change. 6. Manage Expectations - Managing expectations of problems to be expected during the initial and final phases is the biggest challenge. The project manager and the implementation team should monitor the mood and attitude of the employees, their expectations and concerns and take corrective action before problems get out of control.

Enterprise Resource Planning (Second Edition). Copyright 2008, Alexis Leon. All rights reserved.