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Chapter 9 • Organizational Change and Business Process Reengineering 245

ERP implementation projects usually mean radical changes to an organization. This includes
fundamental changes in procedures and processes, job functions, and, initially, in the bottom
line. According to Appleton, “Approximately one half of all ERP projects fail to achieve
anticipated benefits due to managers underestimating the efforts involved in managing
3
change.” The decision to implement an ERP must be addressed logically and communicated
to key management and staff in order to achieve the desired company goals.
The reasons to move to an integrated ERP system are to improve the bottom line by
streamlining business processes and to create a competitive advantage. It was believed for
years that ERPs would almost immediately increase profits and provide a short-term return on
investment. In most instances this is not the case. Expectations are now changing with the
understanding that ERP implementations are much more of a long-term investment. For
change management reasons, however, each company must develop a logical and strategic
reason to implement an ERP system. Bypassing this step will, at best, result in an ERP system
that does not meet management expectations and, at worst, be a complete failure even to get
through the implementation.
The rationale to implement an ERP is often a result of an organization conducting a
BPR study. These studies both identify process and procedural changes to streamline the
business and they identify best business practices that can create industry advantages. In
addition to identifying and documenting organizational changes, BPR sets the stage for the
implementation. In almost all cases legacy systems will not be able to meet the needs
identified in BPR, whereas ERP systems have been sold for a number of years on the fact that
they are built around “best practices.” In any case, BPR is one of the best methods for deter-
mining the need to move to an ERP system and set the high-level goals and project imple-
mentation scope.
The next step is to communicate the BPR results to the company so they can begin gaining
an overall organizational commitment in replacing legacy systems with an integrated ERP.

ORGANIZATIONAL COMMITMENT
The commitment to implementing an ERP system is sometimes akin to jumping off a cliff with
a parachute and hoping it opens. A prime component of a successful implementation is the
unwavering commitment and “will” of senior management and key staff to see the implemen-
tation through to the end. There will be problems and issues to overcome and resistance to
change, both open and passive, so senior management and key staff need to be steadfast in the
quest to succeed.
There are two key areas to consider to ensure organizational commitment to the project:
components of change management and the OPM3. The first, a component of change manage-
ment, is a well-defined communication plan. The communication plan should reflect the organi-
zational experience and build upon the ERP benefits and expectations. The second, OPM3, is a
process that will help in understanding the existing organizational experience in implementing
systems. Using OPM3 will assess an organization’s ERP system implementation experience. It
will also assist in understanding the implementation skill level and therefore the level of risk
involved in the implementation.

3 Appleton, E. L. (March 1997). How to Survive ERP. Datamation, 43 (3), 50–53.