Change Management Strategy



Government Finance Officers Association

Research and Consulting Center

Table of Contents

Chapter 1 Introduction

Chapter 2 Executive Summary

Chapter 3 Summary of Findings and Recommendations

Chapter 4 The District’s Change Characteristics

Chapter 5 Organizational Change Management Roles

Chapter 6 Next Steps

CHAPTER 1 - INTRODUCTION

The District School Board of Pasco County (District) is planning on implementing the Tyler MUNIS Enterprise Resource Planning (ERP) system to replace aging technology, improve and integrate its business activities, and to increase functional and reporting capabilities. However, the implementation of an ERP system is much more that just installing software. The system will provide the District with the opportunity to redesign ineffective business processes, design policies and procedures that will facilitate smarter business activities, and enable staff to perform more value-added activities. The implementation of such a system will provide the District with the opportunity to ultimately transform the organization’s structure into an environment that is more effective, more efficient, and that better serves the changing needs of the community.

Implementing and supporting the MUNIS system will not be easy. A project of this scope and complexity will require the District to dedicate extensive time and financial resources to the success of the project. It will also require the management of project risk and commitment of significant staffing resources to the project, all while maintaining ongoing operations. The potential long-term benefit of these efforts can far outweigh its short-term investment. However, as many organizations have realized, the success of these efforts will rely heavily on the degree that the District prepares for and manages the organizational changes that result from this strategic project.

The significance of the “people part” of ERP implementations is frequently undervalued, largely because people have incorrectly understood ERP implementation projects to be “technology projects,” perceiving that technology is tangible and relatively straightforward to design and implement. Over time, professionals in both IT and functional departments have begun to appreciate that ERP projects, while they do have a technological component, are largely business improvement projects, which require significant input and participation from the functional experts within an organization.

People have not always appreciated the transformative potential that ERP projects may have, not only on technology, but also on business processes and the people that are impacted by them. However, addressing the organizational needs of people as they go through the changes associated with ERP implementations is often an involved process. Therefore, a specialized effort is required to help the people impacted by such changes, as they transition from a fragmented environment towards an enterprise culture. The specialized activities and strategies that are used to support organizations through this transition are known as “change management.”

Within improvement initiatives, change management (CM) serves several functions:

1) it should prepare people and organizations to maximize the opportunities and potential of the future changes

2) it should serve as the primary vehicle for organizational communication, user involvement, and training

3) it should mitigate non-technology risk and resistance, and shorten the time to productivity increases and process efficiency.

In a word, change management is intended to allow an organization to achieve the goals and objectives set out at the beginning of the project. GFOA is pleased to support the District as it continues to develop and refine its change management strategies and activities, which will help it to successfully navigate the anticipated and unanticipated changes and opportunities ahead.

It is important to note that at this juncture of the ERP project, the District has already taken a few steps towards an effective change management strategy. First, it has recognized the importance of change management and integrated CM activities, and has taken steps to ensure that there will be a change management strategy and communication plan integrated with other implementation tasks and activities. Secondly, there is strong executive level support for the project, and a project governance structure has already been established with the authority to direct the project team’s efforts and assign resources. This active form of project governance is vital to building momentum and assuring project team members and participants that the District is committed to the project’s success.

The District is close to completing negotiations with Tyler, and it is important that change management planning keep pace with the software implementation ramp-up that is already starting to occur. In late September, we conducted focus group meetings to explore change management topics and issues by functional area. This report is the culmination of the data gathering and analysis from those meetings.

Despite its place as a milestone, it is important to understand that these first focus group meetings are really a jumping off point for developing specific communication activities that will be used throughout the remainder of the project. It will be increasingly important to develop and execute these activities as the District moves towards implementation. While there are certainly challenges (as any major project must contend with), the District is well-positioned to understand and meet them.

Scope of Work

The purpose of this report is to lay the foundation for a strong change management approach, and thereby limit the negative impacts of poor preparation and communication. Change management can help positively shape staff attitudes and beliefs now and throughout the project. Also, many of the organizational challenges that change management seeks to address are often much broader than the ERP project itself, and therefore must be immediately addressed in a systematic manner.

This document is divided into the sections below.

• Summary of Findings and Recommendations- A summary of organizational findings from the online survey, management interviews, and focus groups, along with a summary of recommended strategies that the District may employ to increase its opportunity for a successful implementation.

• District Change Characteristics – A description of the factors both resulting from and affecting the ERP project.

• Proposed Organization Change Management Roles – A recommended team structure within which the District staff will execute the change management strategy.

• Next Steps - A discussion of how the analysis here will be built upon to advance the District’s ERP change management strategies.

CHAPTER 2- EXECUTIVE SUMMARY

Within this Change Management Strategy, we provide an extensive analysis that will help the District address the challenges that typically impact enterprise-wide initiatives. The report also includes information that will enable the District to develop specific plans intended to maximize the chance for project success. The following is a summary of the information that is included in this report.

Summary of Findings and Recommendations

Within the Summary of Findings and Recommendations section of the report, GFOA identifies the core organizational issues that may significantly impact the success of the ERP project. GFOA also identifies a number of strategies that the District and the project team may employ to address the findings that were identified.

Based on the focus group discussions, the following is a summary of our observations:

Summary of Organizational Findings

|Finding #1 – There will be resistance, but not to the technology – There was very little, if any, resistance to the idea of |

|updating the District from TERMS 3.1 to the Tyler MUNIS software. Instead, resistance will come from staff perceptions that they |

|don’t have time to learn a new system, have other things to do, do not have the right skill set, and fear that they will make |

|mistakes. |

|Finding #2 – There are conflicting communication needs – Most focus groups indicated that they are too busy to be involved heavily |

|in the project, but at the same time want to have even the smallest details explained thoroughly. Providing necessary information,|

|gathering feedback, and ensuring that staff are prepared will have to be balanced with the need to minimize the project’s impact on|

|current operations. This will require a diligent communications effort. |

|Finding #3 – Process improvement will be difficult, and there are strong cultural elements that will be challenged – Efficient |

|operations, supported by the MUNIS system, will require a shift in roles and responsibilities that have been in place for many |

|years. For example, much more validation will occur at the time a transaction is created, error correction may shift away from |

|central functions and closer to the transaction itself, and there is likely going to be more accountability and transparency across|

|all functions and departments. |

|Finding #4 – Training and support need to be addressed early Staff are concerned about receiving enough training and support to |

|adequately adapt to and take advantage of the new system. While nearly everyone we spoke with expressed a willingness to adapt to |

|new standards and processes, they were also somewhat skeptical of the District’s willingness to invest in the training and support |

|needed to implement and sustain improvements. |

|Finding #5 – There is a need to overcome skepticism The TERMS 3.1 rollout was widely viewed by focus group participants as a |

|disappointment, and as a result, there is some skepticism amongst impacted departments that the MUNIS system will be better. Steps|

|will need to be taken to address that and build confidence in the user community. |

Summary of GFOA Recommended Strategies

|Recommended Strategies |

|Strategy #1- Develop and implement a structured communications plan that will be the basis of the change management team’s |

|activities. This plan should include a regular update at department head meetings, presentations on a rotating basis at key |

|individual department meetings, and use of a project web page or collaboration site to disseminate information. |

|Strategy #2 – Increase executive and managerial support Staff will feel more comfortable learning new processes and technology if |

|they know that executives understand the time commitment needed, are committed to process change, and will provide the resources |

|needed to be successful. Executive support needs to be more visible and active in order to accomplish those goals. |

|Strategy #3- Set expectations on process change. While nearly all staff understand that business processes will change, few fully |

|appreciate the extent of that change and the work involved in making it happen. On the other end of the spectrum, some staff do not|

|have realistic views of the time needed to realize ERP benefits, and may be disappointed if their expectations are not aligned with |

|project constraints and goals. These areas also need to be addressed in the communication plan. |

|Strategy #4 – Begin developing a training and post-implementation support plan now, augmenting it with vendor recommendations as |

|implementation begins. Ensure that the training plan goes beyond software utilization to include process and workflow changes. |

|Publicize this planning effort to help assuage users who share a common concern about the District’s willingness to support changes |

|in job duties. |

Change Characteristics of the District

Within the Change Characteristics section, GFOA provides the District with a summary of the types of issues that must be considered as it endeavors to replace old technology and improve its business environment. The section covers the following areas:

1. Scope of the Change

2. Number of Individuals Impacted by the Change

3. Type of Change

4. Amount of Change

Organizational Change Management Roles

Within this section, GFOA provides the District with a summary of the roles and responsibilities that are common within the Change Management function. These functions include the following:

❑ Organizational Change Management and Communication

❑ Organizational Training

❑ Organizational Impact

❑ Supplemental Change Management Support

Next Steps

In this section, GFOA discusses activities that will occur beyond acting on the recommendations in this report. These focus on three areas:

❑ Identifying and training change management team members

❑ Ensuring that executive sponsors are identified and trained

❑ Developing a detailed communication plan that builds on the strategies identified in this document.

GFOA is pleased to work with the District as it develops a strong foundation for its improvement success. We trust that the information within this report will support the District as it moves forward toward establishing long-term improvements in its technology platforms and business operations.

CHAPTER 3- SUMMARY OF FINDINGS AND RECOMMENDATIONS

The section elaborates on the findings that were identified during our focus group meetings, and provides a number of recommendations that the District may wish to employ during implementation.

Methodology

GFOA facilitated 10 focus group meetings September 27-29, involving 112 District employees from a wide variety of schools and departments. The groups were:

Bookkeepers Information Systems

Work Orders Human Resources (end users)

Payroll Human Resources (District)

Projects/Grants Accounts Payable/Purchasing

Finance (District) EBARM

Each discussion lasted one to three hours, and by design, no managers or executives were allowed to attend the discussions. Our hope was to avoid “politically correct” responses and uncover specific concerns and issues. Participants in all ten groups were highly active and willing to share their opinions and concerns, and the sessions were thus dynamic and at times highly animated.

Overview

Although simply improving access to information through replacement of aging technology is a significant benefit in and of itself, the District is looking to leverage this effort further by improving its business operations through the Tyler MUNIS system. To do so, it will have to address the challenges of moving to more centralized and standardized functions and operations. Specifically, the District will need to establish an “enterprise culture”, in which business functions are focused on addressing the needs of the organization as a whole, and not only the specific needs of the particular departments or schools. This paradigm shift will be significant, especially given the flexibility of manual processes that many departments and their leaders have grown accustomed to in performing their day-to-day business activities.

Getting organizations to “own” the improvement process is often the largest challenge to the success of ERP projects. Many organizations mistakenly assume that “the new system” will fix their problems, and that it will save the organization from performing the hard work and making the difficult decisions that are often associated with making substantive business improvements. Yet, the problems that need to be addressed are often not related to technology or functionality, but are sometimes based upon organizational dynamics, outdated policies and cultural issues - issues that no system can address.

To the credit of the District’s leadership, the ERP project has a strong level of executive, managerial and staff support. As the improvement effort moves into implementation, all District staff will need to understand that the ERP system will most certainly result in positive technical improvements, but by itself will not make the operational improvements that are needed to reach project goals. Staff will ultimately be accountable for investing the time, resources and hard work to yield those desired benefits, while using the ERP system to facilitate and enable process improvements.

Observations and Findings

The following is a summary of the findings that were observed during our site visits. Following the findings is a summary of recommended actions that the District should take to address the findings.

Finding #1- There will be resistance, but not to the technology – The focus group participants were very supportive of new software. In general, there was lack of satisfaction with the TERMS 3.1 upgrade, with some participants indicating that version 3.1 was a step backwards for them. None of the participants indicated that TERMS 3.1 was a viable solution for the long term.

As a result, there is very little, if any, resistance to the notion of obtaining and implementing new software. Participants who had a chance to attend software demonstrations during the selection phase were enthusiastic about software features and functions, and were largely looking forward to using a new system.

This is not to say, however, that there will be low resistance to the project. Participants indicated the following concerns:

• Not enough time – participants were concerned that there would not be enough time to assist with design reviews, user acceptance testing, or deployment scheduling. Additionally, they felt that there would not be enough time to attend training and learn a new way of doing things.

• Other things to do – similarly, participants indicated that the need to attend to day-to-day operations would not allow them to participate in the project.

• Wrong skill set – there was some concern that the new technology would be overwhelming for staff who only have experience with simpler, character-based systems.

• Fear of mistakes – some participants indicated that there would be a fear of creating errors, and that they might not know how to fix them in the new system.

Each of these concerns are very common in ERP projects, and addressing them requires two strategies. The first is implementation of a communications plan that builds excitement and enthusiasm for the new platform, and the second is having executives send a clear message about expectations, resources and support. These are each discussed in the next section.

Finding #2 – There are conflicting communication needs – The majority of participants indicated that they wanted to have much more information about the project, the software, new processes, and impacts on their job, and that they wanted the opportunity to provide feedback to the project team. However, similar to Finding #1, participants also said that they didn’t have time for high levels of involvement in the project.

Addressing this concern will involve creative communication vehicles that can provide information and receive feedback in a highly user-driven way. As such, the communications plan will need to use “pull” mechanisms instead of “push” mechanisms where users can gather information and provide feedback on their own terms and with tools that they are comfortable with. This has an added benefit from a resource perspective, as some of the responsibility for adequate communications lies with the user.

Finding #3 – Process improvement will be difficult, and there are strong cultural elements that will be challenged – The Tyler MUNIS system will need to work for both the District and the schools, which have traditionally been at opposite ends of information flow. Chart of accounts design, for example, needs to support District-wide reporting, annual audit, and departmental manager needs all at the same time. In other words, the implementation will need to focus on a truly enterprise solution that meets the needs and goals of all the various users, departments and schools that comprise the District.

It was clear during the focus group meetings that there are at least some cultural gaps between schools and the District. School personnel believe that District staff do not understand how things work at a school, and how difficult it can be to meet District demands for information. Similarly, District personnel tend to believe that they are a service center for the schools, and that they have to “fix everything” even when schools submit bad data, break business rules, or fail to process items correctly.

Although the project team is a long way from completing any design activities, in GFOA’s experience, new ERP technology tends to push transaction processing out towards the end user. Whether you are creating a purchase order, changing an employee’s status, or generating a report, the tools to accomplish a task are generally available to and the responsibility of the end user. The result, of course, is that many business processes must change to accommodate best practices, business rules and workflow.

GFOA strongly suspects that while system design, configuration, testing and deployment will pose the normal set of technical issues, the cultural impact of the changes created by the software will require a very strong communications and training program that is supplemented by active executive support. The District’s cultural silos cannot be overcome simply by introducing new software.

Finding #4- Training and support need to be addressed early. As noted earlier, there is very little, if any, overall resistance to the District’s ERP project from a software standpoint. However, a consistent concern arose during our discussions around the need to support the user community in terms of training and post-implementation support. In our discussions, those sentiments were focused on two areas:

• Will the District commit the necessary resources to ensure that the software works as advertised, and that training is thorough and effective?

• Will the District develop long-term support structures to ensure that new technology and process changes “stick” and become part of the District’s new operating culture?

Given the degree of process change that the District is likely to experience on this project, it is crucial that users feel supported as they absorb these changes. Training and post-implementation support will be important areas for the District to address to respond to that need.

Finding #5 – There is a need to overcome skepticism – As mentioned elsewhere in this report, participants were by and large negative in their views of the TERMS 3.1 upgrade project. In discussing details, several points were made:

• Communications tended to focus only on the core group of highly impacted staff

• System changes actually increased work in central HR, according to participants

• Payroll saw no improvement from the upgrade, and calls for assistance from schools and other departments actually increased

• Query and report functions in TERMS are difficult

• Training on TERMS was widely criticized as ineffective and insufficient

The point here is that this negative experience creates an expectation that the Tyler MUNIS implementation will also be fraught with problems. Focus group participants have not seen enough of the system to be convinced that it will actually meet the requirements within project scope.

Recommended Change Management Strategies

Based on the previous findings, GFOA recommends the following actions to the District:

Strategy #1 – Develop and implement a structured communications plan. As mentioned in the findings, the TERMS 3.1 upgrade suffered from inadequate communications, user information needs must be balanced with workload impacts, and process changes may be culturally difficult to implement. A formal communications plan is needed that incorporates the following elements:

• The content and purpose of the communication

• The method by which it will be delivered

• Who the intended audience is

• The frequency with which the communication will take place

• The person or group responsible for developing and delivering content

Additionally, the project manager and/or change manager should continually evaluate the effectiveness of the plan elements, and be ready to modify them as needed. A good communications plan is not a static document, but goes through changes based on feedback from both the team and various audiences. The intent is to ensure that communication needs are met for all audiences – enabling the project team to take advantage of the broad base of support that it currently enjoys.

Development of a communications plan is already within scope of the project. Our goal with this strategy is simply to accelerate its development and usage to begin as soon as practicable.

There are three tools that the District can implement almost immediately to further the goals of this strategy:

• Create a permanent item on any executive meeting agendas to update stakeholders on project progress and answer any questions. This enhances visibility and awareness of the project for stakeholders, and will also give project sponsors an opportunity to remind senior staff of the importance of the project and commitment to its success

• Allow focus group participants to attend the software training that Tyler will provide to the project team. This will act as a de facto demonstration for the numerous staff who have yet to see the system, and will be another user engagement point for impacted staff.

• Create a project web page or collaboration site. Some respondents (typically those with a less-direct stake in the project outcome) did not feel the need for regular communication, but would like to be able to get a schedule of events, contact information, or other static data about the project. By creating an online vehicle for this, District staff from any area could be reminded of business drivers and goals, see project status summaries and calendars, and generally be updated on the project on their own schedule.

Outside of meetings, the communications plan must also reflect two-way communication informally. Receiving feedback and answering questions is equally critical, if not more so, than communicating project status. Such communication typically takes place on an ad hoc basis, with staff encouraged to email or call a member of the project team with any questions or concerns, although project team members should be available for meetings as well. The project team must collect and summarize this information for the project manager, and if necessary, the implementation, communications or training plans should be modified based on that input.

Strategy #2- Increase executive and managerial support. – Many of the issues from the focus group discussions touch on items that District executives can respond to immediately and often:

• Is the District just trying to find a way to eliminate my job?

• Will the District provide me with enough training to learn the new system?

• Will they help me balance my workload or provide backfill so I can help with design or testing, or at least be able to go to the training classes?

• Are their expectations reasonable? What if I have trouble with new processes for the first few months?

• Will the District invest in support? Will there be a help desk? Can I call somebody for assistance?

All of these questions were asked at several of the focus group meetings, and they are all perfectly reasonable. Also, they can all be addressed by ensuring that the Superintendent, Assistant Superintendents, Steering Committee members, and other stakeholders understand their role in change management and actively support the project and the people impacted by it.

Some communications, such as an answer to the first question posed above, simply must come from an executive in order to be credible. Therefore, the communications plan discussed in Strategy #1 must include vehicles for executive communication and feedback.

Also, executive stakeholders need to be apprised of project status and key issues and milestones. GFOA recommends that executive meeting agendas include a short item for project updates, so that this communication can happen within existing constructs.

Finally, it is imperative that stakeholders understand their role in the project, the impact that they can have on project goals and objectives, and ways that they can provide the support and direction that the project team will need. To accomplish this, GFOA will conduct a stakeholder seminar that covers these topics. We recommend that this seminar be mandatory for stakeholders, as that sends a strong message that active and visible support for the project is expected.

Strategy #3- Set expectations on process change. – Although this will be addressed in the communications plan, we believe that this is a large and important enough issue to be called out on its own.

Process change in this strategy focuses on the day-to-day transactions that every department and school executes. Users and stakeholders will need to understand and accept that the system will be configured to trap errors at data entry time, that other functions within the District may have access to the same data, and that they will need to take responsibility for the quality of the data that is moving through the organization. This represents a significant cultural shift for the District. Currently, there is little workflow or data sharing, and departments and schools typically hand off a process with little regard as to what came before or what happens next. The integration and standardization that comes with the Tyler MUNIS system will require a much tighter working relationship between the District and schools. It will no longer be feasible for a school or administrative department to say that “my part of this process ends here, and I don’t know what happens after that”.

Below are several options to help various stakeholder departments prepare for these process changes. Timing for these types of activities should be discussed ahead of time to ensure that they are fully integrated with other implementation activities, and provide the highest possible value to users. In some organizations, these types of communications have occurred before implementation begins, while in others they occur as part of the implementation kickoff. Regardless of when they occur, the intent of these tasks is to prepare staff for the standardization, transparency and accountability that will accompany process efficiency from ERP:

o The project team can facilitate process review meetings with affected users to analyze processes that are good candidates for change. This can be a follow up to the job shadowing that the project team has already started.

o The project team can prioritize and highlight processes that it expects to change or otherwise be significantly impacted by the new system, and present those to stakeholder departments and schools.

Within the communication plan, it will be important to set expectations for process change in two ways. First, expectations can be set through communication channels such as a project web page, department meetings, and informal communications. Secondly, expectation setting can occur through user engagement and involvement.

There is ample opportunity within upcoming implementation activities to increase involvement of users and stakeholders. Increased involvement is perhaps the best method of increasing overall acceptance of a new way of thinking, and building a level of trust in new processes as well.

In implementation, subject matter experts and department and school representatives will need to assist with product configuration, testing, documentation, and ultimately training. It will be vitally important that the process changes resulting from these activities be communicated back to stakeholders, and that feedback from those stakeholders be captured, assessed, and used to improve the overall implementation. This is a significant effort, and may require a dedicated resource.

Strategy #4 - Begin developing a training and post-implementation support plan – As discussed earlier, there was universal agreement that these two areas are of particular concern for the District. The concern regarding training reflects the end-user view, not the project team training that will need to take place to allow them to assist with package configuration.

Tyler’s implementation plan should include a training approach and plan, and there should be assumptions or recommendations regarding post-implementation support as well. In order to evaluate those, the project team will need to have a going-in position on training and post-implementation support.

The District needs to determine its training and support needs and resources, then develop a baseline that it can refine later in the project. Will the District adhere to a train-the-trainer approach? Will the District allow project team members to stay on the project after implementation for a period of time to provide post-implementation support? Will a help desk be deployed? These are the types of questions that can be addressed early in the implementation to allow for time to think through and implement solutions.

Resource allocation is another benefit of a longer planning horizon. Should there be recognition and acceptance of the need for increased staffing for support, or a need for reorganization of certain positions, the steering committee and other executive stakeholders will need time to review and budget for those recommendations.

Finally, using feedback from execution of the communications plan, the project team should continually refine the baseline training and post-implementation support plans to reflect project progress and user feedback.

CHAPTER 4- THE DISTRICT’S CHANGE CHARACTERISTICS

An organization’s cultural and business characteristics suggest the magnitude of the change that will be occurring and, as a result, the magnitude of the needed change management effort. To understand the level of change that is required, it is important to first understand how technology and business improvement projects can impact organizations. Most impacts from business improvement projects fall within four categories: wide, narrow, shallow and deep. The following table illustrates examples of business improvement activities and the range of impacts that they can have within an organization.

| | |Range of Organizational Impacts |

|Scope of |Wide |District-wide email system |ERP Projects |

|Change | | | |

| |Narrow |Dept. upgrade to Microsoft |New Bus Maintenance System |

| | |Office 2010 | |

| | |Shallow |Deep |

| | |Depth of Change |

As illustrated above, ERP projects often have wide and deep functional impacts to an organization, as many members of the organization are required to make significant changes to their business environment to accommodate the new system. This is in contrast to the implementation of, for example, a new work order system for bus maintenance, which may have significant functional impacts to a specific business environment, or a new email system, which may have minor functional impacts to many users throughout the organization. Because ERP systems have functionality that impacts many if not most departments (i.e. - every department has HR and Payroll business activities), it is likely that an ERP project will require significant organizational change throughout the District.

Change Characteristics

There are four essential change characteristics that are considered when determining the level of change that is required for an organization: 1) scope of the change; 2) the number of individuals impacted by the change; 3) the type of change (i.e., what is being changed); and 4) the amount of change to occur. This section will describe the District along these four characteristics, and then will conclude with analysis of the magnitude of the change facing the District.

Scope of the Change

The scope of the change describes the areas of the organization that will be impacted by the change. Scope is important because, as project scope increases, the requirements to manage the organizational impacts of such change can become more complex, and the need for further change management resources and strategies can be required.

The Project Charter includes a section on functional scope and each of the implementation phases. Readers are encouraged to review that document as a companion to this report.

The changes that the District will experience will not be limited to those of a functional nature. The District will also be required to absorb changes in its policies and its administrative activities. As the District considers reengineering some of its business processes in the future, it will need to accommodate changes in how business processes are managed, and how processes are either centralized or decentralized to maximize efficiency or effectiveness. This scope of change can have significant impacts, which must be accounted for in change management activities during implementation.

Number of Individuals Impacted by the Change

As change management is primarily about people, the number of individuals being impacted by the change is a clear indicator of the amount of change management needed. Increasing numbers of individuals impacted has the following implications relative to the change strategy:

Depending on design and configuration decisions, deployment of the Tyler MUNIS system has the potential to impact nearly every employee, if for no other reason than the system that captures time records and produces paychecks is changing. Direct impact departments include Finance (all divisions and work groups), Facilities, HR, Payroll, and Information Services. Outside of these core departments, virtually every position that performs Finance or HR related services (e.g. bookkeepers) within departments and schools will be directly impacted. Any manager who typically receives or requests ERP related reports will also be impacted, as the new system will likely provide tools for managers to develop their own reports.

Given that all departments are impacted by these business services in some way, there will be wide-ranging impacts on both central business functions and department-based business activities as well. The District should treat this project as an enterprise-wide effort with some impact to virtually every employee.

Type of Change

The degree of change that an organization experiences can impact the degree of change management that is required. For example, while a simple technological change, such as upgrading from one version of a word processing application to another, may only require basic training for employees, a large number of employees are still impacted by the change. To be sure, in this situation, no formal training program may be required if the differences in versions are not substantial – employees may be able to learn on their own, based upon their experiences with the prior version. However, if an organization were required to move away from one type of application environment to a completely different business environment, as will be the case at the District, this change may require a more sophisticated change management approach, as people go through the uncomfortable process of learning the new system.

Clearly, the most visible type of change will be in the technology itself. In many cases, previously manual processes will become automated. The current systems are several generations older than the Tyler MUNIS system, and the look and feel, degree of user-friendliness, navigation, flexibility, and scalability will all be significantly different. Those departments and staff that are unfamiliar with the latest desktop applications may need to be given support in basic navigation skills on the new platform. The District should account for this type of change as implementation moves forward (again, the communications plan should address this area).

ERP projects entail significant changes to business processes, policies, job responsibilities, as well as the enabling technology discussed earlier. This requires not only training on the changes to these elements but also more general support and counseling, especially for elements such as changes in job roles, changes in procedures, changes in business rules, and changes in authority. The findings and strategies discussed earlier are aimed at these less discrete and more difficult types of changes.

Amount of Change

The amount of change entailed by a project is typically expressed in terms of an incremental versus a radical change. Radical change is more difficult to adapt to than a change that is phased in incrementally.

Although this project will take place over two years or more, it is still associated with more radical change. Currently, the District’s plans call for implementing core financial applications first, followed by employee records, payroll, benefits and time entry functions. Employee self-service, work orders, and staff development follows that. It is entirely possible that circumstances arising during implementation may alter that schedule. Our only point here is that how the District has chosen to deploy these functions has a direct bearing on the change management activities that need to take place.

While phasing clearly helps mitigate change concerns (as well as overall risk), the changes are still significant enough to be called radical change. This is primarily due to the likely introduction of a new chart of accounts, data and process integration, workflow, and new analysis and reporting tools. Additional factors will include reengineered processes, elimination of some paper forms, and elimination of department-level desktop applications. These are major changes that suggest this is more than an incremental improvement in operations.

Change management will be needed to help staff members understand the benefits and opportunities of business process improvements; to promote the understanding of how changes may improve businesses processes; to facilitate the resolution of issues that may result in resistance among stakeholders who are adversely impacted by the business changes; and to support stakeholders through the training and support process.

As with most ERP projects, making quick and significant functional improvements in a collaborative manner will require significant change management activities, which encourage stakeholders to work together for common interests, rather than for the interests of their respective departments. This effort will also require continued executive leadership to encourage departments to work together in a substantive manner. This area is critical to realizing the benefits of an ERP solution, and the area in which much of the change management effort should be focused.

CHAPTER 5 - ORGANIZATIONAL CHANGE MANAGEMENT ROLES

There are four key organizational roles to consider as the project moves into implementation. The first is overall change management and communications, which is the primary subject of this report. The second is training, an important component of the change management effort. The third is organizational impact analysis, and the final role is supplemental support, recognizing the important role that informal support structures and external professionals can play.

This chapter presents a summary of these four functions. In terms of project team structure, some governments combine these areas and give responsibility for all to a single individual. In others, particularly larger organizations such as the District, the scope or logistics of the implementation may dictate that the training role be filled separately from the change management role, or that the impact analysis role be filled from one of the core departments. In those situations, GFOA recommends that the training lead or training coordinator, and the impact analyst report directly to the change manager, to ensure that District-wide communications are seamless.

Change Management and Communications

The Change Management and Communications function requires leadership from project management. Many project managers develop specific leadership roles for each of the team leads in the implementation organizational structure, and taken together, the project manager and team leads become the Project Management Team. While responsibility for the execution of change management activities can be delegated as appropriate, it is important that the Change Manager or other member of this Project Management Team have the following responsibilities:

❑ Develop, manage and coordinate change management activities and strategies

❑ Schedule and coordinate the frequency and logistics of communication activities

❑ Develop and manage the Communication Plan

❑ Review all project-related communication activities and products for quality assurance

❑ Ensure the development of all communications for the project

❑ Develop and deploy “Resistance Mitigation” strategies

❑ Facilitate the acquisition of resources for all change management activities

❑ When requested by the project manager, report to Project Steering Committee on progress and issues related to change management

❑ Ensure that change management activities, including training activities, coincide with other project-related activities

❑ Ensure the success of specific change management activities and strategies

❑ Serve as “spokesperson” and “cheerleader” for the change management effort, coordinating with project team members to present information to stakeholders.

❑ Collaborate with other project team members to understand the issues that should be communicated across the District

❑ Support the change management leadership in managing the change strategy

GFOA understands that the District is experiencing some difficulty identifying a single individual to serve as Change Manager. Until such a person is found, GFOA can assist with planning, training and initial communications activities. It would be beneficial to the District to find a small group of change agents to assist with these activities to allow for knowledge transfer and to provide credibility to the end user community.

Qualities and Attributes that the Change Manager should exhibit:

• Well regarded by other management staff.

• Should be a proven project manager with a successful track record on past projects and activities.

• Should be a member of in-house staff (i.e.- to the degree possible, the Change Manager should not be an outside consultant; however, as discussed above, pairing a knowledgeable outside change management consultant with an internal staff member who understands the culture of the District can provide an effective solution).

• Should have experience in contract management

• Proven experience in developing messages for various targeted audiences within the public sector environment

• Excellent communication, presentation and facilitation skills

During ERP implementations, it is common (and encouraged) for the implementation consultant to provide change management support for the project. This support person (or persons) brings change management expertise and experience that the District employee may not initially possess. Tyler’s Change Management support staff may provide the District with assistance in best practice implementation, functional process changes, and the ability to challenge the status quo with software-based process improvements.

Yet, while it is appropriate for both GFOA and Tyler to provide direction and expertise, it is important that the change management effort eventually be led by District “insiders,” with the organizational capital to get things done within the organization.

Training

The Training function is responsible for ensuring that all impacted stakeholders receive adequate training and support to successfully perform their roles within the new business environment. The specific responsibilities of the training function include the following:

❑ Develop and manage the Project Training Plan

❑ Work with implementation consulting staff and other project team members to map legacy job roles and responsibilities to new roles within the new business environment

❑ Work with implementation consultants and other project team staff to develop training plans for each impacted business role

❑ Manage and/or coordinate all training activities (pre-requisite, project related and on-going)

❑ Schedule all project-related training activities

❑ Manage the logistical coordination of all equipment and resources for project training

❑ Support the change management leadership in managing the change strategy

Qualities and Attributes of those serving in the Training role

• Extensive background in training assessment, curriculum development, training coordination, and scheduling

• Experience in logistical planning and contract management

• Excellent communication skills

Organizational Impact Analysis

The Organizational Impact function is responsible for assessing the organizational impacts (labor impacts, policy and procedural impacts) of the ERP system and developing strategies that successfully address these impacts. For example, the transition from the legacy environment to an organization-wide enterprise environment may result in the need for further skill set training for certain job classes. Such a change to the business environment may require the District to develop new policies and procedures related to these changes. The Organizational Impact function ensures that the District addresses these issues. The specific responsibilities of the Organizational Impact function include the following:

❑ Work with Human Resources staff and project team staff to assess role-based work impacts of working within the new business environment

❑ Develop role-based job description “crosswalks”, which map legacy job descriptions and responsibilities to new job descriptions and responsibilities

❑ Work in collaboration with the project team and Tyler to ensure that training is provided for new role-based responsibilities

❑ Research labor-related administrative policies to assess the implications of the new business environment on labor relations and activities

❑ Confer with impacted stakeholders to discuss job impacts

❑ Work with Human Resources staff and other stakeholders to develop policies and strategies related to organizational impacts

❑ Support the overall change management strategy.

Qualities and Attributes of those serving in the Organizational Impact Function

• Extensive background in human resources management and labor relations

• Typically a member of Human Resources upper management staff

• Excellent communication, facilitation and negotiation skills

• Detailed understanding of

o State of Florida and District human resources policies and procedures

o District labor agreements

• Well-respected among executive management and bargaining units

Supplemental Change Management Support

In addition to core project team staff, the District may consider employing other resources to the Change management effort, to enhance and supplement their change management activities. The following is a summary of such resources:

Department Liaisons- While not necessarily direct members of the project team, this group is often critical in the change management effort. Department Liaisons are typically mid-management department staff members that are well respected throughout their departments, which have been designated as the project representatives from their departments. They serve as the primary communication conduit for the project, regularly attending project informational meetings and communicating project-related issues to their department staff. The Project Team will regularly schedule meetings with this group to provide status updates and to make them aware of anticipated changes. With this information, the Department Liaisons ensure adequate department-wide communication of project activities, and serve as the project champions within their departments, regularly notifying staff of core project milestones, as well as anticipated process and policy changes.

Training Professionals- Should the District lack the expertise or staffing availability to develop an adequate training solution, it may consider employing the services of an experienced training vendor. These vendors are well-trained in adult-learning techniques and often have experience with training end-users in the use of a particular software solution. This may result in better knowledge transfer to end-users as they learn to use the new system. Such training services that are provided by training vendors include the following:

➢ Curriculum Development

➢ Instructor-led training

➢ Training Deployment

CHAPTER 6 - NEXT STEPS

While this report provides feedback through which the District may develop effective change management activities, GFOA is also supporting the District in other activities:

Preparing the Change Management Team: As mentioned earlier, GFOA understands that there have been difficulties at the District in identifying a change manager and change management team. GFOA will assist by filling that role initially, and preparing and conducting a half-day planning and training session for District staff identified to assist with change management during the implementation.

Development of a Communication Plan: GFOA will assist in development of a Communication Plan as described in Strategy #1 above.

Stakeholder Seminar: The long-term success of a project of this magnitude requires the regular and open support of the Project Sponsors, the Project Steering Committee, and other stakeholders. However, in GFOA’s experience, these executive staff members may not fully appreciate their role in change management, and may not be as effective as they would like at communicating their support of the project. The Stakeholder Seminar identifies the recommended activities and strategies that Project Stakeholders should apply to adequately express their support, and thus promote the long-term District-wide support of the project.

Other Tools: In addition to the items mentioned above, GFOA will assist in developing the following as part of the overall change management effort:

• Resistance Mitigation Plan: As the District proceeds with implementation, it may experience unexpected resistance to process change. The Resistance Mitigation Plan summarizes many of these common resistance strategies, and provides counter-strategies that the change manager can use to reduce the impact of organizational resistance.

• Coaching Plan: During periods of transition, managers often need support in how best to support their staff through the transition to a new business environment. The Coaching Plan will provide department management with recommended approaches for supporting staff through the change process.

Altogether, the change management deliverables and strategies will help the District to develop a strong foundation for success, along with effective plans of action to address the findings described earlier, and to maximize its improvement efforts.

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Consulting Report to

The District School Board of Pasco County, FL

Change Management Focus Group

Results and Analysis

October, 2011

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