ERP – Getting from Here to There with Organizational Change Management Session #25045 March 11, 2008 Alliance 2008 Conference Las Vegas, Nevada

Overview Delaware’s ERP history Organizational Change Management (OCM) – what is it? Creation of the State’s OCM Team Project Management processes integrate with OCM processes OCM processes and tools for success

State of Delaware ERP Systems In Progress Implemented PeopleSoft HCM V8.8 (HR/BA/PR/TL) X eBenefits PeopleSoft HCM V8.9 Components of Pay V8.9 Time & Labor 8.8 PeopleSoft Financials V 8.9

Payroll Human Resources Statewide Technology Delaware PHRST Payroll Human Resources Statewide Technology

Delaware’s ERP Background State of Delaware 71 Organizations 35 State Agencies 19 School Districts 17 Charter Schools 36,000 Employees 12 Unions Represented 37 Different Locals This illustrates the various organizations that make up the State of Delaware. All our school districts and 2 higher education organizations are included in the State make up.

1990’s G G 1990’s — Various False Starts July 1999 PeopleSoft Human Resource Version 6.02 implemented Benefits Administration & Payroll — Unsuccessful Rolled back to Mainframe Legacy System

August 1999 – February 2000 Project managed by consultants Low team morale Multiple project plans to ‘fit’ budget Production support for Human Resources Chain of command – multiple reporting structure

March – December 2000 Became a ‘state – managed’ project Acquired additional state resources Rearranged project team Added full time Change Management team Single reporting structure

December 2000 – July 2001 Change Management Team formed Strategy developed Prepared (readied) State Organizations End-User training (1300+) Successful HR (V6.02 to 7.51) Upgrade & Benefits/Payroll implementation

ERP Lessons Learned High – level commitment Acquire “Best of the Best” state resources Avoid modifications – re-engineer 1st Visionary Change Management Production support project plan

PHRST Upgrade V7.51 to V8.8 Client Server to Web based Not much functionality change One year timeline Planning began in April 03 before actual funding July 1 Tremendous change to look and feel! Internet education Go live was a non-event!

Why ERP Implementations Fail 42% Leadership 27% Organizational & Cultural Issues 23% People Issues 4% Technology Issues 4% Other Organizational issues left unchecked often lead to project failure Source: Organization Dynamics, Jim Markowsky

Department of Technology & Information Office of Major Projects Organizational Change Management Team

State Agency Transformation Governor & General Assembly established new agency The Department of Technology & Information Office of Major Projects Chief Program Officer Project Management Team Organizational Change Management Team

Process Integration Project Management Change Management Project Initiation Project Planning Project Executing Project Controlling Project Closing Change Management Managing Change-Planning Managing Change-Execute Preparing for Change Monitoring Change Transition Reinforcing Changes

Organizational Change Management

Change Management Team’s Mission Provide the structure and guidance necessary to effectively prepare organizations for the successful acceptance of cultural change in order to achieve their business strategy.

What is Organizational Change Management? Definition The organized, systematic application of knowledge, tools, and resources of change that provide organizations with a key process to achieve their business strategy

Organizational Change Management Objectives Provide awareness Ensure understanding Facilitate acceptance Care, listen, and respond Manage people’s expectations Ensure readiness Champion the project

Greatest Success Factors Active and visible sponsorship Use of organizational change management processes & tools Effective communications Employee involvement Effective project leadership and planning

Greatest Obstacles Resistance from employees and managers Inadequate senior management & sponsorship Cultural barriers Lack of change management expertise

Project Management & OCM in Delaware IT Projects

Preparing Process

Assessing the Organization Project Assessment questionnaire Organizational traits Change traits Plot the project on the Risk Determination Table Stakeholder Analysis

Assessing the Organization Risk Determination Table 110 Medium-High Risk High Risk Small incremental change to a change resistant organization Large Disruptive Change to a Change Resistant Organization Organizational Traits 44 Low Risk Medium-Low Risk Small incremental change to a change-able organization Large Disruptive Change to a Change-able Organization 22 12 24 60 Change Traits Modified from Prosci Change Management Toolkit

Stakeholder Analysis

OCM Tailoring Based on answers in the assessment Determines which tools to use Sponsor roadmap Coaching plan Readiness methodology Training Strategy

Change Management Team Model Sponsor Project Team Communications Coordinator Change Management Specialist / Readiness Lead

Change Management Project Lead Communications Coordinator Executive Sponsors ERP Team Model State Orgs. Project Director Change Management Coach Green Team Change Management Coach Yellow Team Change Management Project Lead Project Team Change Management Coach Blue Team Communications Coordinator Change Management Coach Red Team

Managing Planning Process

Comprehensive Organizational Change Management Plan Uses existing project documentation Project Charter Scope or Statement of Work Compiles information in one location to aid communication efforts Provides Project overview information OCM strategy information

Comprehensive Organizational Change Management Plan Provides Recommended change management team structure Sponsor Activities Communication Plan Readiness Methodology Training and Coaching Plans Resistance Management Plan

End-User Identification & Skills Inventory End-User Inventory End-User Identification Manager/Supervisor Identification Specify Key-End User Skills Gap Analysis Identify IT Support Personnel and Technical Specifications

Organizational Change Phases and Communication What is happening? How do I stay motivated? Transition through Analysis Celebrate Success! through Awareness Understanding Comfort Unaware Denial Insight Ability with coaching Desire through impacts Anxiety What’s in it for me? How do I prepare? Knowledge by training What will I do differently tomorrow?

Communication Plan

Who Should Deliver the Messages? The majority of messages should come from the CEO and the direct supervisor ©2005 Prosci Best Practices in Change Management

Who Should Deliver the Messages? The current situation and rationale for the change Business issues or drivers that created the need for the change Competitive issues or changes in the marketplace What might happen if the change is not made Vision of the organization after the change is made Overall timeframe Alignment of the change with business strategy ©2005 Prosci Best Practices in Change Management

Who Should Deliver the Messages? The impact on daily activities Why employees want to go along Job security Specific ways they are expected to aid the change Resources for assistance and ways to provide feedback ©2005 Prosci Best Practices in Change Management

Information Sheets FACT sheets - awareness Impacts/Info sheets Training information Coaching information Count-down to system implementation

Information Sheets Awareness Info Sheet Coaching Info Sheet

Communication Tracking Spreadsheet Communication Title Media Date Sent Sent from and to Organization/Team Phone Email Address Follow-up Needed Yes No Type of Follow-up Needed Meeting Phone call Email Other Comments

Managing Executing Process

Preparing/Tracking/Reporting “Readiness” Preparing/Tracking/Reporting

OCM Readiness Methodology All Project Teams INPUT Functional Impacts Successful System Implementation End Users Readiness Checklist Master Readiness Tracking Spreadsheet Functional Impacts Documentation

Readiness Tracking, Measuring, and Reporting Functional Impacts Spreadsheet Master Readiness Tracking Spreadsheet Readiness Checklist On-site Tracking Station OCM Status Executive Sponsor Readiness Reporting

Functional Impacts

Master Readiness Tracking Spreadsheet

Readiness Checklists

Executive Sponsor Reporting

Training

Training Assure training steps are in place Training strategy Training Plan Training Design Materials

Coaching

Coaching Plan Customized Coaching Plan Prepare managers and supervisors to coach their employees through the change

Transition & Monitoring Processes Knowledge transfer Collect & Analyze Feedback Lessons Learned

Transition Develop Transition plan Plan to train organization resources

Transition Ownership to Business Owner Knowledge Transfer Plan Identifies required skills by project team role Assesses current skills Develops an agreed upon action plan and milestones Re-assesses semi-annually for life of project

Monitoring Change Survey End Users Post implementation Three months Six months One year Monitor Help Desk Training

Reinforcing Process

Reinforcement Collecting, Reporting, and Analyzing Feedback Work resistance plans Celebrate! Milestone successes Implementation successes

Integration is Key

Achieving Successful Organizational Change for ERP Projects Dedicate resources to Organizational Change Management Secure visible executive sponsorship early in the project Repeat key messages early and often Involve employees in the change process Work with the PM from the beginning and plan your change strategy together

Change Management Team Tracks, measures, and reports readiness Identifies critical roles and individuals to act in these roles Plans for change and manages it as a process Assesses organizational readiness

Change Management Team Educates individuals about change Communicates in a clear, honest, open manner Demonstrates commitment through active involvement and role modeling Solicits sponsor involvement when necessary

Organizational Change Management Team Leader Q & A State Of Delaware William Penn Building 801 Silver Lake Boulevard Dover, DE 19904-2407 Pamela M. Waters Organizational Change Management Team Leader Voice: 302-739-9815 Fax: 302-677-7073 Email: Pamela.Waters@state.de.us SLC: D-410

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