Summary
ERP implementations offer an opportunity to drive cultural shifts, address inefficiencies, integrate software, and modernize processes. They act as “emotionally significant events,” prompting organizations to reassess practices, adopt new behaviors, and prepare for continuous improvement. Cloud-based ERP systems require frequent updates, shifting organizations toward proactive change management. Key focus areas include time recording, data cleansing, and performance measurement to meet government compliance standards like Federal Acquisition Regulation (FAR) and Cost Accounting Standards (CAS). A successful ERP implementation depends on identifying gaps, eliminating outdated practices, and building a foundation for sustainable, competitive operations.
ERP Implementations as ‘Emotionally Significant Events’
I first encountered the term “emotionally significant events” early in my career from a mentor. Reflecting on it, I realized such events—both personal and societal—have shaped many aspects of life.
An emotionally significant event refers to a moment or experience that creates a profound psychological impact, triggering reflection, behavioral shifts, or personal change. These events disrupt normal routines, making individuals or groups more receptive to new perspectives and open to transformation. Examples include:
1. Communities uniting during natural disasters, like Hurricane Milton or wildfires in the Amazon.
2. Power outages, such as those that devastated Puerto Rico.
3. Family health emergencies.
4. Tragedies
Though ERP implementations may not carry the same emotional weight, they similarly disrupt norms, requiring thoughtful preparation and openness to change. These projects demand significant time and effort, leading to opportunity costs that affect both professional and personal lives, thus “Emotionally Significant Event”.
Embracing Change and Continuous Improvement
Adopting cloud-based ERP systems introduces an evolving environment with frequent updates. Organizations must establish processes for evaluating and integrating new features to remain competitive.
However, businesses often encounter varying levels of resistance to change, particularly those dependent on outdated systems or custom-built solutions. These setups can create a reliance on a small group of internal experts, resulting in a “hostage-like” environment where improvements are avoided simply because the current system “works.” Seemingly minor fixes can quickly escalate into complex challenges due to limited expertise and aging infrastructure, making modernization efforts more difficult.
Launching a change campaign that promotes modernization is essential to overcome these barriers. Preparing employees for the transition helps ensure smoother adoption of the new system. Additionally, relying on ERP vendors for updates and maintenance allows internal teams to focus on core operations, driving business growth.
Common Change Areas for Government Subcontractors
Doing business with the government involves increased oversight, audits, and strict compliance with regulations like the FAR and CAS. Key areas impacted by these changes include:
Time Recording
• Daily Time Entry: Employees must log hours daily, including project, task, and funding details.
• Billable vs. Non-Billable Hours: Clear separation ensures compliance with cost allowability rules.
• Auditable Records: Required for DCAA reviews.
• Pre-Approval for Changes: Prevents unauthorized adjustments.
Timely entries are essential for accuracy. Backfilling, even after a day, can result in estimates and errors, making daily entry critical.
Strategies to Enforce Compliance:
• Daily floor checks and weekly reporting of compliance rates.
• Interactive emails for time entry via Outlook and computer alerts.
• Performance metrics tied to time entry accuracy and manager accountability.
• Delegating time tracking efforts to proxies or admins to ease the burden at payroll deadlines.
Measuring Performance
Restructuring the organization and redefining performance metrics are common changes during an ERP implementation. Disclosure statements are often re-evaluated, and cost pools adjusted to improve competitiveness and prepare for CAS compliance, especially for companies anticipating CAS-covered contracts. These shifts help align financial reporting and operations with regulatory requirements and business goals.
Closing Gaps and Inefficiencies
An ERP implementation offers a valuable opportunity to identify gaps and inefficiencies in existing business processes and align them with future objectives. It allows organizations to reflect on past practices, what worked well and what didn’t, and make deliberate improvements to avoid repeating bad habits. By addressing these gaps, organizations can streamline operations, enhance workflows, and ensure the new system promotes continuous improvement. The goal is to close performance gaps, eliminate inefficiencies, and create a foundation for sustainable, optimized processes moving forward.
Data Cleansing
Data cleansing is a critical step in ERP implementation, but it’s important to understand how data issues arose in the first place. The goal is not only to clean the data, but also to identify and correct the behaviors or processes that led to poor data quality. Implementing controls, such as stricter data entry protocols, validation rules, and routine audits, ensures these issues do not recur. This proactive approach helps maintain clean, reliable data throughout the system’s lifecycle, preventing future inefficiencies.
Closing Remarks
ERP implementation is a pivotal opportunity for transformation, encouraging organizations to modernize processes, adopt new practices, and align with regulatory requirements. However, success requires more than technical upgrades, it demands thoughtful preparation, change management, and a focus on continuous improvement. By addressing inefficiencies, implementing effective controls, and embracing new workflows, businesses can unlock long-term value and competitiveness. With proactive strategies, organizations can ensure smooth transitions, mitigate resistance, and foster a culture of adaptability essential for thriving in today’s dynamic business environment.
