New software built for your industry is often a good way to scale your business.
The factory floor hums with whispers of a new ERP system, a mix of curiosity and apprehension circulating. Employees who have been with the company since before computers are grumbling about “newfangled contraptions,” while younger workers nervously eye their workstations, wondering how this change would impact their daily routines.
Sound familiar?
It does to Nestle. The confectionary giant’s efforts to consolidate its 29 different business units into a standardized ERP was a struggle from the get-go. Misalignment between business processes and ERP capabilities, resistance to change and communication breakdowns were the top causes of delays and frustration among employees.
Employees reporting extensive disruptive change are 67% more likely to have issues with managers. According to the 2024 State of the Global Workplace Report from Gallup, Inc., while difficulties often affect frontline workers, it’s leaders who are experiencing the most change. Despite this, these leaders must be physically and mentally prepared to set the tone for their team to embrace upcoming challenges in their stride. Here are four pearls of wisdom to ensure leaders hit the ground running.
Popularity counts when appointing a change leader
Chaos and uncertainty might be filling your shop floors, but in the boardroom, a different kind of energy must fly. Leaders who are known for their ability to navigate tricky situations with a steady hand and a genuine smile are the right choice to steer this change.
No one can really prepare you for the allies and enemies that might emerge—they often come from the most unlikely places. For example, you might predict resistance from the engineers, muddled about how to access project data, CAD integrations, or track progress. Perhaps, it turns out, they received comprehensive guides, and actually, the pushback is coming from the accounting team. It will be the change leader’s role to clearly articulate the long-term benefits, generate enthusiasm, and establish clear communication channels to ensure these issues don’t slip through the cracks and escalate.
While they will be responsible for ensuring staff are on board and timelines are met, they will work closely with someone who can lead the data side of things. A chief data officer or an ERP vendor who can guide employees through the technical aspects, from data migration to customization.
Of course, implementing a new ERP impacts every aspect of manufacturing companies’ operations. Key individuals will need to support the change leader in reporting any issues with the system or their colleagues. The idea is for these people to become experts in the new ERP and ensure everyone understands their training.
Scoping data migration strategy isn’t a time to be ambitious
The data leaders’ first order of business is ensuring good data. Years of project files, billing records, and financial data lay scattered across various systems, and these need to be mapped and migrated to the new ERP. This isn’t easy. Data leaders must collaborate with change leaders, listening to the business needs and department objectives to meticulously chart a course, prioritizing critical data, identifying potential bottlenecks, deciding which data can go, and bracing themselves for the revamp.
Depending on exactly what manufacturers want to achieve with their new ERP, what modules they will implement, and what processes they will automate, will implicate the project scope. Change leaders must do their homework and reach out to multiple vendors and peers who have undergone similar ERP implementations to establish a realistic timeline and budget. No matter how well they plan, the only guarantee is that delays and unexpected costs will arise at some point.
Most commonly, manufacturers transfer data from old systems to the new ERP in a phased approach. Hershey’s didn’t do this, attempting to implement multiple systems (an ERP, CRM, and SCM system) simultaneously within a 30-month period. The end result was a 19% decline in quarterly profits, a drop in stock price, and a significant loss in market share. Instead of setting themselves up for failure, leaders should unite to agree on priorities, quick wins, the biggest bottlenecks, and the extent of proprietary data customizations.
Once the data roadmap is set, leaders must work with ERP vendors and data teams to ensure proper training programs that are tailored to employees’ roles and responsibilities.
Test, test and test again
With a plan in place, the real work can begin. The installation is the easy part—most likely the chosen ERP partner will ensure the proper configuration of the ERP software. It’s often the complex data transfer that causes issues.
Roll out the training sessions, make sure everyone understands the “why” behind the change, patiently address concerns, and quell anxieties. During this stage, it helps if the data lead is always available to demystify the technical jargon and guide employees through the intricacies of the new system.
Then, the most important—and time-consuming part—is testing it. Each phased migration must be thoroughly tested to identify and resolve any issues before going live. When the day of the launch arrives, leaders want to feel confident that the initial rollout was carefully phased, allowing teams to acclimate to the new system gradually. The change leaders will feel like they are everywhere at once, troubleshooting glitches, answering questions, and offering encouragement.
The post-implementation cooldown
In the weeks that follow, the factory floor slowly finds a new rhythm. Initial apprehension gives way to a growing sense of familiarity, and leaders start seeing some quick wins impressing the team. If this is the case, leaders should feel extremely proud that they have successfully navigated the company through a very challenging transition.
Adoption by the people who use it every day is where success lies. The best way to ensure teams feel comfortable is for the chosen change leaders to continue checking in with staff about the new processes and using their feedback to identify any areas for improvement.
Likewise, system experts must regularly monitor the ERP’s performance and determine whether objectives are being met and where refinements can be made. Your ERP partner can help you navigate all of these changes post-implementation with regular check-ins and KPI tracking.
Successful ERP integration hinges on user adoption and company-wide engagement. Yes, implementing a new ERP system can entirely disrupt your organization. However, that disruption—when done in a positive way—fuels change and growth. With the right leadership in place, the right ERP partner, an effective communication strategy, and efficient project management, new software built for your industry is often the best thing you can do to scale your business for the years to come.
By breaking your project into digestible phases and following these tips, manufacturers can better coordinate resources, reduce the pain of a new implementation, gain employee buy-in, and position themselves for long-term growth.
John Haddox is the COO of Decision Resources Inc. a Pittsburgh-based ERP consulting and implementation company. Reach him on Linked In.
