Conceptual Study on Change Management Approaches and Strategies in ERP Implementations

1. INTRODUCTION

Change does not occur solely at the organizational level, but also at the countries level of the world [1] [2]. For instance, in late 2010 and early 2011 sparked a wave of revolutions and protests throughout the Arab world or to be called Arab spring which aimed to change something in the Arab world systems [3] [4]. However, organization needs constant change to keep their customers, keep updated with technology and the ability to competition [5] [6]. Therefore, many organizations seek to possession the enterprise resource planning systems, in addition asserting that an ERP systems help the various elements of the organization share knowledge and information, cut back costs, and improve management of business processes [7] [8]. Despite the advantages of ERP system, it faces resistance to change when transition to another system and it collide in implementation difficulties because of employees' resistance [9] Mentioned that 13%, 69% and 28% failure rate of the ERP systems as a result of technological issues, people and method respectively. However, [10] showed that 90% of firms that applied change management to ERP implementations believed that it had a powerful impact on the success of the project. Nevertheless, ERP implementations are plagued with high failure rates and inability to understand promised advantages and the failure rate has been estimated as 60-90%. The high failure rate within the implementation of ERP concerns to an improved understanding of the process [11] [12]. In fact, several cases of the failure to implement ERP considered because of either or cancellations and time overruns have been reported. Assert that effective implementation of ERP needs establishing five core competencies that are the utilization of change strategy development, project management, change management techniques, integration of business process re-engineering, and technical aspects to push the infusion of ERP within the workplace. However, change management engages the successful balancing of forces in favour of a change over forces of resistance [13]. Comprehensive income statement is a measure of firm performance. The purpose of issuing this statement is to make firms to disclose some certain elements of financial performance to help user groups of financial reports in making better financial performance evaluation. Also, comprehensive income as a basic financial statement, should report in details all the recognized revenues and expenses of the firm. The focus of income statement is on the operating revenues and expenses. User groups of financial reports for decision–making require data related to all revenues and expenses (including gains and losses). Therefore, a basic financial statement to Moreover, understanding ERP project implementation through a balanced perspective can thus forestall any unpleasant surprises, and can guarantee and guide the change management method to be embedded during an implementation painless fashion. Also, ERP system is usually related to elementary change to organizational processes that involve totally different stakeholders. Therefore, attention should be paid well for the stakeholders of change strategy. In their article under the title of "A Comparative Study of Critical Success Factors (CSFs) in Implementation of ERP in Developed and Developing Countries" showed that change management considered being the most of important factor in developed countries in implementation of ERP in developed and developing countries. In order to scale back the failure rate of ERP implementation, a variety of research focusing on the critical success factors within the implementation of ERP [14]. Change is bringing the modifications and alteration in the existing state. Changes occur naturally and it is important for the people to have the adaptability feature so that they can adjust with the required change. The need of time urges individuals, systems, organisations, and process to alter and modify so that they can survive. The reason behind organisational change is usually the dissatisfaction to some extent from the normal day-to-day routine work because if there is an absolute satisfaction about the routine manner, change would have never been required. Two vital types of organisational change are (a) Planned and (b) unplanned change. Planned change is result of the leaders and top management's assess the situation and need to bring modifications in the current process, plans, people, patterns, and situations whereas unplanned change emerges from the contingent situation that requires alteration as a sudden and surprising one because it is not being expected by the firm [15]. Thus, this leads to the argument that how to ensure that the changes are successful and to what extent? Nevertheless, the Enterprise Resource Planning (ERP) is widely used tool for the change management process. ERP is usually referred to as a category of business-management software, which is typically a suite of integrated applications that an organization can use to collect, store, manage and interpret data from these many business activities [16]. ERP provides an integrated and continuously updated view of core business processes using common databases maintained by a database management system. ERP systems track business resources such as; cash, raw materials, production capacity and the status of business commitments: orders, purchase orders, and payroll. The applications that make up the system share data across various departments (manufacturing, purchasing, sales, accounting, etc.) that provide the data. ERP facilitates information flow adapts better to change. It also makes a company more flexible and less rigidly structured so organization components operate more cohesively, enhancing the business, both internally.

The aim is to examine Enterprise Resource Planning implementation and the strategic approaches involved in the handling of change management process.

This study found that ERP critical success factors fall under one of five main categories, namely: change management [18] [19], top management support, business process re-engineering (Shah et al., 2011), vendor support and user involvement. The following subsections discuss each.

Change management is one among the most factors that led to failure in ERP implementation [19] [20], For successful ERP System performance, change management is measured as a significant aspect. A group of articles in previous studies addresses the change management by explaining why it is necessary within the ERP implementation, the way to do it effectively, and the effective learning. Moreover, change management is needed to organize users for the introduction of the new systems, cut back resistance towards the system and influence user attitudes towards change.

Finney and Corbett (2007) mentioned that top management is a key requirement to own committed leadership at the top management level in their research. Moreover, this idea noted the necessity for management to anticipate any glitches that may be encountered (Motwani et al 2005). The senior management is deciding who will develop strategy plan. Empirically proved that robust and committed leadership at the highest management level are important to the success of an ERP implementation. In several cases, ERP implementation failed as a result of lack of top management commitment. Moreover, top management of the organization should analyze the sources of resistance and use the suitable set of strategies to offset them (Aladwani, 2001). However, management might notice that there is still robust workforce resistance to the operational changes ensuing from ERP implementation (Al-

alignment that will be accomplished on a part of top management.

Finney and Corbett (2007) mentioned that BPR was the third most ordinarily cited CSF in their analysis. Also, cited that implementing an ERP system inevitably involves an outsized portion of the organisation and often accompanies with major BPR efforts, and an ERP system improves business processes management [21] [26] [23]. However, the BPR factor is important to success or failure of ERP projects. Described a case study of a failed implementation of SAP R/3 to re-engineer the business processes of a major manufacturer. Therefore, implementing an ERP system must force the BRP and/or developing new business processes to support the organizations goals. In addition, employees need learning, training and coaching to know and grasp how the system can change business processes [24].

The selection of a suitable ERP vendor is very essential, as a good vendor can provide support ranging from technical assistance to training [25] [27]. Indeed, vendor support that serves the implementation process is also an essential part of an ERP system. [28]. concluded that companies of developing countries more deepen on ERP vendors experience in compared to developed countries companies in their article. However, experiences of ERP industry must be shared with users that supported by leading ERP vendors.

When implementing new information technology, the crucial goal of management is that the technology's intended level of usage is accomplished. However, user involvements begin from setting the ERP project's vision and end with any post implementation actions. [27] Informed that user involvement at early phase of ERP system implementation is supportive to understand the system and to present a helpful feedback. Indeed, the involvements of users encourage them to develop their views avoiding chance that their jobs will be threatened by the ERP system, or that they will not know how to do the job within the scope of such an EPR system. ERP users are imagined to be hesitant to welcome the new ERP system if they do not be familiar with how it works. Training each of users in the groups of how the ERP system works is important in making consciousness. Aladwani (2001) mentioned that a review of ERP research revealed different strategies for implementing ERP successfully [23]. These strategies are classified into technical, organizational and people strategies. Several of the technical strategies that have been planned to decide ERP success include technical characteristics of ERP installation, ERP complexity, adequacy degree of in-house technical capability, and cost and time of implementation [29] [30]. Organizational strategies for supporting ERP implementation achievement include change strategy growth, change management methods, project management, organizational structure and capital, managerial ideology, coordination, and information system function characteristics [23] [29]. People strategies contain employees and top management attitude, user involvement, and education. There are many change management strategies in previous studies in which some of them present efficient techniques, approaches and models. Also, others are neither efficient nor practical. This section presents and illustrates most important change management strategies for ERP implementation. Zafar et al (2006) proposed a model for managing user resistance and successful ERP implementation and is illustrated by the change management model (Figure below). The model recommends that the organizational resistance is predicted to be negatively associated with: resistance to changes is going to be negatively associated with achievement of predetermined goals, and also resistance to changes is going to be negatively connected to user satisfaction. The change management initiatives like obtaining the staff concerned and creating available support teams can mitigate the impact of resistance to change and enhance implementation success [31]. Early user involvement within the design and implementation of latest business processes additionally as extensive top-down and cross-functional communication could generate enthusiasm for ERP implementation. The tool of management is leadership, communication, training, planning, and incentive systems. These tools should all be used as levers to get rid of obstacles with minimal effort when applied properly.

common elements identified include: top management support, project champions, effective communication, clear systematic plans and effective training/knowledge transfer [32].model is illustrated in Figure below.

According to Abbas and Asghar (2010), the process of transition or transformation of an organisation is regarded as organisational change [33]. Young (2015) counter argued that harmonization of ERP systems can be a mammoth task (especially for big companies) and requires a lot of time, planning, and money [34]. Moon et al (2006) found that integration of truly independent businesses can create unnecessary dependencies [26]. Walsh (2009) argued that Provides a comprehensive enterprise view (no "islands of information"), making real–time information available to management anywhere, anytime to make proper decisions. Moreover, it protects sensitive data by consolidating multiple security systems into a single structure. After evaluating the pros and cons of ERP, the next step was selection of a big brand to assess how effective is the ERP in the strategic change management process [35]. Menon et al (2019) explores critical challenges in Enterprise Resource Planning (ERP) implementation based on insights from an exploratory qualitative single case study in the Canadian Oil and Gas Industry. The study was conducted in a Canadian case organization using twenty interviews from members of four project role groups of senior leaders, project managers, project team members, and business users. The study further collected and challenges and out of which, the top twelve challenges discussed in detail were drawn from the responses of participants from all four project role groups. The study findings indicated that critical challenges were significant during ERP implementation. This research appears to be one of first case studies in the Canadian oil and gas industry that focuses on critical challenges in ERP implementation projects [36]. Khatri and Kumar (2015) states Enterprise Resource Planning, ERP software has come a long way since its inception as Inventory Management and Control Systems of 1960s. The value of ERP Implementation Strategy has been stressed over the years and it has been included as an important Critical Success Factor, CSF, as recorded by previous researchers. Traditional ERP implementation followed more or less a sequential approach akin to the Waterfall Model. Researchers over the years have categorized ERP Implementation methodology and developed frameworks. These are based on varied ERP Implementation observations. Given the variety of methodologies and frameworks available, the real-world ERP implementation demands the development and adoption of a strategy as a guiding principle for underlying methods. This paper suggests a new classification approach based on the ERP implementation strategy that can be categorized as custom-made, vendor-specific or consultant-specific. This research paper also conducts a comparative study of leading vendor-specific ERP implementation methodologies along-with their example cases. It then discusses how the principles of Agile Methodology as laid down in the Agile Manifesto [1] are being incorporated in ERP implementations [37]

Although there are number of organizational factors interlinked with the strategic change but in this research Haque (2017) identified factors have been considered. This is due to the fact, in the preliminary research stage, these factors were evident in the case of Burberry. Many of the changes are likely to have a decisive impact on the social relationships inside the 'target' system and the relationship between the "target" individuals or groups from external environment [38]. Change can create new leaders, as it can create other roles Sah and Dadwal (2018) examines the effective strategic change management and Enterprise Resource Planning implementation under distinctive learning styles namely; diverging, converging, assembling, and accommodating

changes and organizational factors in relation with the ability to adopt change and successful ERP implementation. Total 87 respondents were approached through snowball, purposive, and convenience sampling. Findings revealed that accommodating learning style is the most influential learning style that significant positively affects the ERP implementation process. Interestingly, all learning styles (diverging, converging, assimilating, and accommodating) have statistically significant correlation with organizational change process. Additionally, complexity is the most critical organizational component affecting employees' ability to accept changes [39]. Najm et al (2018) study was to explore the impact of change management dimensions (top management support, enterprise communication, organizational culture, and training and education) on ERP system outcomes (productivity improvement and decision-making improvement) in the Jordanian pharmaceutical companies [40]. To achieve the objective of the study a questionnaire consisted of (46) items was built, and its validity and consistency were verified. The study was conducted on a sample of (200) employees working in five major companies in the Jordanian pharmaceutical sector: Hikma Pharmaceuticals, Pharma International Co. and United Pharmaceutical Manufacturing Co., Philadelphia Pharmaceuticals Co. and Amman Pharma Industries. Data was analyzed using regression analysis. The results of the study indicated that the four dimensions of change management have a significant positive impact on the two outcomes of ERP system application. Enterprise resource planning (ERP) is an IT system that supports the business functions that firms adopt to gain advantages and development possibilities. However, some firms do not show positive financial performance after implementing ERP. Why is this case? An ERP is an information system (IS) that brings about radical changes with in organizations, changing both the IS environment and overall corporate business process, which may cause resistance from the organization‘s members. Thus, change management is crucial, in operating a successful ERP, to addressing organizational changes after the adoption of ERP. The objective of this study was to examine the influence that the depth of business process reengineering (BPR) and change management have on ERP performances. To this end, KOSPI companies with more than a year of experience using ERP were analyzed using the structural equation method. This study confirm the mutual relationship between the ERP success factors and its performance. In future research, it would be helpful to determine if companies with higher IT performances actually have better financial results. known for the sustainability of an organization. Adopting ERP through change management will add a lot of success to a company. But to deem the surroundings and other people as the major tools are the basic that would like for the total system to work well. Also, there is the necessity to induce a preparation for any kind of hurdle that comes. Handling complicated beneath efficient leadership is that the core matter of pains for a sleek ride of ERP. A need into the planned and pre-implemented strategy followed by implementation and post-implementation consequences will bring in views for achieving organizational goals. In addition, based on the preceding review on the explored literature of change management of ERP implementations, change management becomes a crucial topic within the ERP implementation. Moreover, a collection of articles addresses the change management by explaining why it is necessary within the ERP implementation, the way to do it effectively, the best practices, the successful experiences, and therefore the appropriate change management strategies.

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Department of Management, Rai University, Saroda, Dholka Taluka, Ahmedabad, Gujarat mitenmaru@gmail.com