Many organizations are reaping significant benefits from implementing ERP systems, most notably efficiency improvements. But, more impressively, some are going way beyond productivity metrics to realize a richer return on their ERP investments. They’re truly mastering processes and diminishing departmental silos. They’re enhancing customer and constituent satisfaction. These organizations are driving and analyzing performance in ways that weren’t even possible prior to ERP systems. A common thread in their success is an empowered, take-charge HR department—one that leads strategic initiatives to identify and execute positive changes in organizational alignment, role definitions, and resource development.
Re-Aligning Organizational Structures
After an ERP implementation, previous rigid organizational structures may require re-directing to reflect new cross-functional business processes. HR can add strategic value by assessing organization structures in view of the ERP system capabilities and the organization’s mission and culture. For example, it’s not uncommon for payroll departments to be part of Finance. But, in ERP, the payroll modules are often part of—and closely tied to—the HR system and associated processes. Various objectives, processes, communications, job functions, and reporting structures will likely be affected after implementing ERP systems in either or both HR and Finance. The ERP system also offers the opportunity to create shared services centers that challenge traditional organizational models.
Alignment assessments also reveal where additional cross-functional interaction is required as a result of new technology and processes. With cross-functional teams becoming more critical to market competitiveness, it may make sense to adopt matrix reporting structures.
Furthermore, ERP systems can enable a deeper business intelligence and more effective decision-making—if the right analytical tools are in place. HR leadership can help the management team assess the analysis requirements as well as the ownership and processes for producing and sharing information in meaningful reporting formats.
Assessing Roles and Functions
With the right alignment now in place, HR can effectively lead the analysis of the roles and responsibilities required to deliver on the new cross-functional objectives, processes and ERP capabilities. We at CherryRoad often see job descriptions that are 10 to 20 years old. These become even more outdated after an ERP implementation, as the automation of tasks enables some positions to focus on more value-added responsibilities.
Once they’ve assessed role requirements, redundancies and gaps, HR and department management will know the extent of optimum change. They may also uncover the need for fine-tuning some processes.
Re-Focusing the Resources
Now, the HR leaders have the necessary foundation to structure, develop and manage staffing resources and HR processes that truly can deliver on the more stringent standards of an ERP-enabled organization. Then, those leaders and their HR staffs can better assess and re-direct employees as well as develop more effective recruitment and training programs.
Certainly, the ERP system will drive some of the training requirements. For example, an organization’s legacy system may have required that some employees possess only basic bookkeeping skills, while the ERP system requires an understanding of business accounting. But, inevitably, training will extend well beyond system-related skills, as departments will need some employees to take on new analytical roles.
While the IT department is often the champion of an ERP system implementation, it’s the HR leaders that must carry the post-implementation torch. Their experience and holistic view make them best suited to help the organization harness the real power of its people and ERP investment. If you’d like to learn more, we invite you to email us at info@cherryroad.com.