This document outlines the organizational change management (OCM) approach for an ERP implementation project at a company. It provides background on the need for the ERP system and the OCM. The OCM will focus on managing resistance to change, creating ownership and adopting new processes. Key elements are leadership/sponsorship, communication, and optimizing the organization. The OCM team mission is to enable adoption and ensure benefits. The document defines charters for communication, leadership engagement, and organizational alignment to guide the OCM work.

1. 2008
Organizational ChangeCharter
Template
Author:
Company:
4/29/2008

2. Organizational Change Charter 2008
Index Page Nr
1 Document change history
2 Introduction
2.1 Purpose
2.2 Background to the project
3. Contextual framework for organizational change
management (OCM)
3.1 Approach
3.2 The case for OCM
3.3 OCM: Final deliverable and milestones
4. OCM charter elements
4.1 OCM team mission and key relationships
4.2 Communication charter
4.3 Sponsor and leadership charter
4.4 Organization optimization charter
5. Limits and exclusions
6. OCM organizational arrangements
7. Conclusion
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3. Organizational Change Charter 2008
1 Document change history
Version Date Author Description of changes
1.0 1/5/2008 PM de Kock First Draft
2. Introduction
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4. Organizational Change Charter 2008
2.1 Purpose
This document outlines the approach to, mission and guidelines for the
planning and implementation of the Organization Change Management
(OCM) element of the ERP implementation at XXX. The document provides
background to the project, the OCM team mission and key relationships, as
well as the charters for the following:
• Communication
• Leader and sponsorship
• Organization optimization
The document concludes with an overview of the potential limitations,
assumptions and OCM organizational arrangements. The above aspects are
highlighted in more detail in the paragraphs that follow.
2.2 Background to the project
XXX took a decision to proceed with the implementation of an ERP system
against the background of the following key needs:
•
•
•
•
•
Following the decision to proceed, a tender process was followed and
relevant implementation partners, as well as additional resources mobilized.
The project is currently in the preparation phase and as such one of the key
outputs is the drafting of a charter for OCM that will provide the basis for
further action in this regard. The paragraphs that follow highlight this in more
detail.
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5. Organizational Change Charter 2008
3. Contextual framework for organizational change management
(OCM)
3.1 Approach
The change management component of ERP implementations are increasingly
regarded as a strategic imperative to project success. Research and
benchmarking shows that where technical delivery is not supported through
OCM, the inevitable result is lack of ownership, capacity and under utilization
of the system. However, if OCM is over emphasized at the cost of technical
delivery, the result is often a loss of credibility, mistrust between the
implementation team members and schedule delays. OCM is consequently
not an end in itself but an essential component in the provision of an
integrated business solution.
In terms of the above the key elements in achieving success in delivering OCM
are as follows:
• Managing resistance to change, thereby enabling adoption of new
processes, procedures, systems, roles and structures in the shortest
possible time
• In addition to create ownership of the solution, thus moving the
organization to take co-responsibility for the successful implementation
and maintenance of the system
Against the background of the above the following organizational leverage
points are identified and utilized to facilitate adoption and ownership in an
effective and efficient fashion:
• Leadership and sponsorship
• Governance and compliance
• User competence in respect of the new system
• Performance management
• Organization design as well as role clarification
• Ensuring attraction and retention of a pool of competent users; and
• Communication
The above paragraphs provide a clarification of the major components of the
OCM effort, and this provides the background for consideration of the
business case, an aspect that will be discussed in the next paragraph
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6. Organizational Change Charter 2008
3.2 The case for OCM
While anecdotal evidence alludes to the need to address aspects related to
human commitment and adoption, several studies are currently confirming
the strategic nature of effective OCM. In this regard the following should be
considered:
• A recent study by Deloitte, of 62 ERP implementations, show that
executives in these business-organizations attribute no less than 60% of
implementation success to addressing so called people issues successfully
• A study of 118 SAP implementations, by the Australian SAP User Group
(SAUG) show conclusively that where OCM is implemented successfully,
SAP R/3 installations are delivered well within scope and lower than
budget
• In addition to the above, research conducted by the Corporate Leadership
Council, Towers Perrin and Gallup also show that employees who are fully
engaged to their work situation tend to improve their discretionary effort
significantly, while their retention increases dramatically (up to 80% as
indicated by the Corporate Leadership Council)
The above provides a clear case for OCM, and highlights the need to consider
what the final product/outcome of the change effort should be. This is
outlined in the paragraphs that follow.
3.3 OCM final deliverable and milestones
As indicated previously, OCM interventions are not an end in itself. It is
indeed aimed at the delivery of an integrated business solution. In terms of
this the final deliverable of OCM should consequently be as follows:
• An implemented support package that will ensure early adoption of the
new system, and ownership for its successful implementation and
maintenance. This is measured through the following success factors (see
OCM Dashboard):
o Common orientation
o Ability of key role players
o Level of ownership
o Uniform perception
o Felt results
o Sustainability
The milestones that need to be achieved to deliver the above are outlined in
Table 3.3 (a)
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7. Organizational Change Charter 2008
Table 3.3 (a) OCM Milestones
4. OCM charter elements
4.1 OCM team mission and key relationships
The OCM team is responsible for the identification of people management
and organizational design risks that could retard the implementation of the
system.
The key relationships that need to be managed in the process of executing
their responsibilities are outlined in Diagram 4.1 (a)
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8. Organizational Change Charter 2008
Diagram 4.1 (a) Key Relationships
Diagram 4.1 (a) above provides a broad overview of the major role players in
the implementation of the project. It indicates the relative interest as well as
influence in the project and based on this, provide a broad engagement
strategy. This broad strategy will be utilized and further expanded upon in the
detailed stakeholder analysis and sponsorship approach to be developed as
part of the OCM component of the project.
4.2 Communication charter
4.2.1 Mission
The OCM team is responsible for the identification of communication needs,
formulation of key messages and utilization of innovative media and channels
to communicate to the stakeholders in the project.
4.2.2 Guiding principles
• Communication will be short, to the point and clear
• A central message (“the elevator speech”) will be created to ensure that
all efforts are linked to the rationale, and strategic alignment of the
project
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9. Organizational Change Charter 2008
• Reporting as well as action planning will clearly state:
o Who, what, where, when and why
o Main goals and results to be achieved
o Problems and potential solutions
o Benefits of approach or intended action
• Communication will in all instances be aimed to engage the reader
through the use of metaphors, relevant picture art and emphasis of
specific, strategic issues
• As far as possible will the use of the following be avoided in
communication to the target population (unless clarified appropriately):
o Acronyms, abbreviations, technical jargon, flowery adjectives,
clichés and quotes
o Aspects or processes not relevant to people outside of the project
o General or over-used words
o Overstating the expected outcomes of the project
4.2.3 Critical success factors
The success of the communication element of the project is dependent on the
following:
• Communicating with the end in mind (strategic alignment and delivery)
• Timely and appropriate targeting of messages
• Creating an acceptable level of understanding for the content and context
of the project
• Enablement of the target population to participate, take co-responsibility
for benefit realization and effectively influencing decision making
4.3 Leader and sponsorship charter
4.3.1 Mission
The OCM team is responsible to enable change leaders, executive
management and sponsors to play their rightful role in governance and the
creation of a psychological climate for optimal benefit realization. This is
achieved through the implementation of:
• An appropriate sponsorship model
• An effective governance process
• The provision of communication advice and support
• The development of change agents to create and maintain impetus aimed
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10. Organizational Change Charter 2008
at delivery of an integrated business solution
4.3.2 Guiding principles
The leader and sponsorship support, provided by the OCM team will take
place within the framework of the following guidelines:
• Clear identification of key stakeholders to the project
• Development of appropriate stakeholder engagement strategies
• Assessment of the readiness of the organization to implement the
envisaged changes
• The development and implementation of appropriate strategies to deal
with resistance
• The implementation of effective strategies to deal with capacity issues,
including role clarification, attraction and retention of skilled people
(where appropriate)
• The identification of people management risks as result of
implementation, as well as strategies to mitigate such risks
4.3.3 Critical success factors
For the leader and sponsorship element of the project to be successful the
following should be enabled:
• Strong executive sponsorship
• Strong project leadership
• Strong business process ownership
4.4 Organizational optimization charter
4.4.1 Mission
The OCM team is responsible for the timely identification of the impact of the
project on key organization components and the formulation as well as
implementation of strategies to align these so as to ensure optimal benefit
realization. These factors include:
• Structures
• Systems and business processes
• Shared values and culture issues
• Management approach
• Role and job design
• Attraction and retention of right skills for benefit realization
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11. Organizational Change Charter 2008
4.4.2 Guiding principles
The organizational optimization element of the project will be performed
against the background of the following guidelines:
• Timely and comprehensive identification of organizational impact of the
project
• Articulation of change strategies to ensure alignment of organizational
components that include:
o Conducting thorough orientation and executive alignment sessions
o Role redesign and clarification
o System as well as role based training
4.4.3 Critical success factors
The success of the organizational optimization element of the project is
dependent on the following:
• Analysis and benchmarking of organizational impact of the project
• Design proposals that reinforce the cross functional nature of the
organization
• Effective communication of organizational impact
• Role clarification
• Effective transfer of skills to the organization
5. Limits and exclusions
The OCM component of the project is designed and implemented within the
limits of the project scope. Actions are directed in accordance with the
detailed scope statement for OCM (as outlined in the approved Work
Breakdown Structure – WBS). As such will changes in terms of the scope be
managed and approved in line with the change control protocol and
delegations of authority for the project and OCM WBS.
It should also be noted that the OCM component does not deal with user
training that is either aimed at familiarization or competence building in the
use of the system (nor role based training to operate and maintain the
system). Notwithstanding will coordination be observed between OCM and
the relevant training specialists.
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12. Organizational Change Charter 2008
7. OCM organizational arrangements
The OCM team consists of the following members:
• Senior OCM Specialist
• Two OCM Coordinators, provided by the client organization
8. Conclusion
Per definition the charter provide an overview of what needs to be delivered
by the relevant team/sub team, and serve as mandate for further action
following its approval. As such it should be stated that this document is a
draft, for consideration and approval and should be read against the
background of its status.
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