Enterprise Data Technology Part 3 — Change Management

By Robert Kramer, Patrick Moorhead - March 22, 2024

While technology can be incredibly beneficial, its effectiveness ultimately relies on the individuals using it. You could buy and deploy the most innovative enterprise data technology system available, but without strong user adoption and training, its capabilities will not be fully realized. This points to the importance of change management, which addresses the human aspects of technology implementation, for ensuring that technical deployment and user adoption work together to make your EDT project successful.

In the first installment of this enterprise data technology series, I started with an overview of internal and external data sources, followed by a discussion in the second installment about EDT’s key components and benefits. In this piece, I’ll discuss how change management significantly affects a company’s use of EDT and its broader success in data management.

Change Management for EDT Implementations

It’s natural enough for people to react strongly to change, even when it’s for the better. For instance, if you came home from work to find that your partner or housemate rearranged all the furniture in your living room, you might have an initial emotional reaction that’s negative. Even if you come to see that the layout is distinctly better, it still takes some getting used to.

Now extrapolate a change like that across a whole logistics department implementing a new module for the SCM software, or an entire company implementing a new ERP system. Introducing a new system can expose all kinds of issues, including problems in supply chains, applications, equipment, security and workflows—and it shouldn’t be surprising if you face some negative reactions from employees because of the significant changes involved. Whether we’re talking about the technical aspects of implementation, the training required to learn new workflows or the human element of being uncomfortable with something new and different, the only reasonable thing is to expect some friction and get ahead of it. This requires an enlightened view of implementation that regards the human elements and the operational workflow elements as being just as important as the technical elements.

Top-level management must drive change to ensure it happens, as successful implementation often hinges on a C-level executive sponsoring the project and taking the lead. Designating a project management team to guide the new system’s rollout is also critical. If the in-house team lacks the necessary experience, bringing in external expertise is necessary—and must not be delayed. As discussed in my previous ERP and SCM article, failure rates for first-time implementations sit between 55% and 75%, mainly because 82% of employees resist change. In this context, the importance of leadership commitment cannot be overstated. In addition, your plan must include socializing the changes to come, training the affected staff, refining workflows and communicating the temporary issues that employees can expect.

Change Management Factors

The change management issues I’m talking about in this article aren’t hypothetical; I’ve faced them repeatedly as a sales and marketing leader across multiple companies. For any major project, I’m always adamant about defining processes, structures, roles, responsibilities and training stages. But if anything, this approach was even more important when implementing EDT systems that affected everyone’s work—from sales to marketing to customer support to purchasing to manufacturing to fulfillment. When implementing any new EDT product, in particular an ERP or SCM system, here are some of the critical change-management factors you need to keep in mind:

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  1. Sponsorship from Senior Leadership — Getting buy-in from leadership is mandatory, and this must include having a designated executive sponsor. A senior executive must own and drive the change, or else the project won’t be treated with the importance it deserves. The executive sponsor should form an implementation team to manage change and provide clear vision, resources and support at every level.
  2. Change Management Liaison — It’s essential to assign—or even hire—an in-house dedicated expert in the system to be implemented, someone with significant experience, to manage the change. This person will lead the project at a tactical level, planning methodically to minimize risks and ensure that the transformation is successful.
  3. Clear Goals — Creating specific and measurable goals for the deployment guides the project and allows for evaluating its effectiveness. It’s essential not only to identify the strategic gains expected from the new system, but also to understand how it will affect each department and type of user differently.
  4. Communication — Encouraging feedback and openly communicating with all stakeholders is essential. This includes explaining the reasons for the change, the benefits of the new system and how it will affect each part of the organization.
  5. Training — This is a massive part of managing any change in EDT systems. Without training, all the other hard work is lost. All existing employees must be appropriately trained to use the new system. Post-launch support is equally important to address issues quickly and ensure smooth operation. Select and train change advocates in each affected department and location to assist colleagues and promote the new system. Offer detailed documentation and user manuals, ideally through an online platform. And make sure that people—whether change advocates or individual users—know how to reach out for help when they get stuck.
  6. Data Quality — Successful change relies on having high-quality data in the new system. If you already have high-quality data, great—now you need to ensure that it’s ported effectively. But if your data quality isn’t good enough in the first place, then that’s a project in itself. In that case, you must take the necessary steps to get the data quality up to par, then explicitly manage the migration of the data from old systems to the new one, ensuring the new system’s reliability from the start. (I intend to write a detailed article soon about data quality, exploring more details and use cases.)
  7. Managing Customizations and Integrations — Nearly all ERP/SCM systems need customization, given that only a small fraction of companies, about 3%, purchase off-the-shelf solutions. The role of a change manager includes managing these customizations while ensuring that the new system works well with other systems in an organization’s IT environment. Note that opting for more customizations increases the likelihood of scope creep, which will make the project harder to manage. The goal here is to decrease complexity while improving efficiency wherever possible.
  8. Testing — The testing process should cover integration, specific system modules, data migration, performance, security, user acceptance and functional testing. These tests occur in stages, starting with early testing for configurations, integration testing to ensure system compatibility, UAT for user validation, regression testing to confirm functionality after updates, security testing to identify and fix vulnerabilities and performance testing to evaluate system capacity during peak times. Finally, post-go-live monitoring is conducted to resolve any emerging issues.
  9. Continuous Change and Improvement — Treating the implementation as a continuous process rather than a one-off project enables ongoing enhancements and adjustments to meet evolving business requirements. Anticipating changes throughout the process is key, and feedback from users will be invaluable as they engage with the system daily.

Success and Failures of Change Management

As mentioned earlier, implementing new EDT systems can significantly change organizational processes and introduce other challenges. Recent examples highlight how important effective change management is for technology adoption.

  • Nike successfully implemented SAP S/4HANA, enhancing data visibility. Its change management strategy included securing an executive sponsor, providing training regionally, designating champion users to support the new system and maintaining transparent communication, complete with regular updates, to encourage open dialogue.
  • Schneider Electric rolled out Oracle Cloud ERP to enhance its supply chain, using a phased implementation to reduce disruptions. The approach adopted an agile methodology, enabling feedback from users to refine processes and focus on user engagement, training and effective communication.
  • Home Depot undertook an inventory optimization initiative using SAP S/4HANA and JDA. It used good change management practices to ensure it maintained high data quality, improved workflows, reduced manual tasks, improved team communication and established performance tracking for identifying improvement areas.

Companies that emphasize transparent communication, stakeholder involvement and comprehensive training navigate these challenges more effectively, leading to better operational performance. By contrast, failures in EDT implementations often stem from inadequate planning and ineffective change management processes. This can lead to specific problems that arise from insufficient testing, unrealistic expectations, poor vendor selection and more.

Unfortunately, examples of failed implementations abound—even for companies that are generally well-managed.

  • The chocolate maker Hershey, for example, encountered a significant setback due to a rushed implementation schedule and the simultaneous rollout of multiple enterprise systems, compounded by insufficient training and poor communication that led to low employee buy-in.
  • Target’s venture into Canada was spoiled by critical errors in ERP data entry from inexperienced employees importing existing data, resulting in 70% of the data not being usable. This oversight, along with insufficient change management protocols and a hurried timeline, contributed to the closure of 133 stores, elimination of 17,000 jobs and $7 billion in losses.
  • Revlon’s attempt to consolidate various SAP systems without a realistic change management strategy resulted in shipping delays and sales losses.

These examples show the importance of a well-thought-out change management strategy, including realistic timelines and comprehensive training and testing methods. Taking these steps—even when they seem tedious or when you encounter pushback from users—helps ensure smooth transitions and validated outcomes before you end up with a big problem.

Let’s Change!

Successful EDT implementations demand refined strategies and thorough management protocols. Given the complexities and the high difficulty level associated with these implementations, the importance of change management must not be overlooked. Strong change management practices will help you navigate challenges and instill effective methodologies before the project even launches. This approach facilitates the organizational resilience and flexibility needed to overcome any obstacles and sets a solid foundation for achieving the desired outcomes from EDT projects.

Robert Kramer
VP & Principal Analyst at Moor Insights & Strategy

Robert Kramer is vice president and principal analyst covering enterprise data, including data management, databases, data lakes, data observability, data analytics, and data protection. Robert has over 30 years of proven experience with startups, IT companies, global marketing, detailed strategies, business modeling, and planning, working with enterprise companies, GTM assets, management, and execution.

Patrick Moorhead

Patrick founded the firm based on his real-world world technology experiences with the understanding of what he wasn’t getting from analysts and consultants. Ten years later, Patrick is ranked #1 among technology industry analysts in terms of “power” (ARInsights)  in “press citations” (Apollo Research). Moorhead is a contributor at Forbes and frequently appears on CNBC. He is a broad-based analyst covering a wide variety of topics including the cloud, enterprise SaaS, collaboration, client computing, and semiconductors. He has 30 years of experience including 15 years of executive experience at high tech companies (NCR, AT&T, Compaq, now HP, and AMD) leading strategy, product management, product marketing, and corporate marketing, including three industry board appointments.