The Importance of Enhanced OCM when Moving to Cloud ERP

Originally published August 23, 2022

In today’s evolving and highly competitive market, businesses must continually look to the future, make consistent changes to operations, and advance as technology and digital offerings advance, too.

One valuable change you can make for your organization is moving to cloud-based operating systems, including adopting enterprise resource planning (ERP) software in the cloud. With more people in the workplace today having grown up in a cloud-connected world, many organizations are more accepting of this technology than ever before.

In recent years, businesses have been more willing to migrate to the cloud because so much of the work to shift to and maintain the complexities of cloud ERP systems is outsourced to external vendors rather than trying to manage it all on-premises. Having an experienced third-party take charge of implementing and activating your cloud ERP system also equates to faster deployment, less downtime, and minimal interruptions to workplace productivity during the transition.

Your best bet is to plan for the move and have a strategy to administer that change. An enhanced organizational change management (OCM) methodology that considers variables and each person within an organization and their unique perspectives, strengths, and limitations to technological change is the prime solution to a seamless transition to cloud ERP.

Benefits of Cloud ERP: Why Are Organizations Making the Move?

In the modern world, embracing cloud technology can greatly benefit your organization. ERP software analyzes substantial amounts of data in real time, allowing companies with several moving parts to make swift and accurate decisions about changing or problematic business areas affecting operations or finances.

Customer information, financial data, sales histories, supply chain status, order and inventory management, procurement, project management, human resources management tools, and live operating metrics are several core competencies available on cloud ERP systems. When handling these functions via on-premises ERP software, you use your own IT staff or a managed service provider and often require:

• Licensing
• Enterprise-grade servers
• Networking and storage (e.g., server backup systems)
• Maintenance and updates
• Troubleshooting
• Supplementary software for customization and sustainability
• Antivirus and security software

Moving these functions to the cloud means your capabilities are hosted and managed by an off-premises vendor, and they oversee all the above. This enables you to take advantage of heightened flexibility and scalability and adjust more easily to fluctuating demand without adding significant costs for new infrastructure and unnecessary resources.

Opting for cloud-based functionalities for your business also allows for increased collaboration, heightened innovation, and a competitive edge in our continually updating digital world.

Knowing how to leverage this emerging technology for your company can lead to:

• Heightened security
• Improved functionality
• Lower costs
• Real-time data for enhanced decision-making
• Easier customization
• Simplified compliance
• Greater accessibility from anywhere at anytime
• More scalability
• Increased reliability
• Disaster recovery
• Overall ease and peace of mind

Transitioning to Cloud ERP Using OCM: Challenges of the Waterfall Methodology

The Waterfall methodology is a popular choice for project management. This approach is very linear, with each stage throughout the process needing to be completed before moving on to the next. Due to its step-by-step characteristics, it’s best to have clear objectives from the start of the project when adopting this organizational change management style. In other words, Waterfall is best suited to more predictable projects and outcomes.

While the Waterfall approach is predictable and has a fixed timeline and budget—requiring little input or feedback throughout the established process—it’s not beneficial to projects that don’t have clear or definite goals or that require frequent involvement by business leaders and stakeholders.

Additionally, it’s challenging to troubleshoot problems until you’ve already advanced to the next stage. Waterfall has five stages: requirements, design, development, training, and deployment. Since each stage needs to be completed separately and in full before moving forward with the project, you might not be aware of problems initiated in an earlier stage until you’ve already passed through it. Some oversights will require you to go back and start over, prolonging timelines and adding unexpected costs to your preset budget.

Therefore, when opting to use the Waterfall methodology, you must guarantee high project reliability. The best way to ensure success using the Waterfall approach to project management is to collect as much information as possible during stages one and two before implementation begins. While the project is slower to ramp up using Waterfall, once you get started, there is little to no room for flexibility.

Enhanced OCM for Better Outcomes With an “Agile” Approach

An “Agile” approach follows the same fundamental methodology as the Waterfall approach but with more flexibility or agility—as the name implies. The Agile methodology allows for experimentation and temporary solutions that can be adjusted throughout the change process. Rather than having a fixed timeline and budget with predictable results, the schedule, costs, and outcomes can adapt as the project progresses, allowing for planning in different directions with continued input from stakeholders.

In other words, the strategy and design can be evaluated, altered, and fine-tuned at various phases of the project, accounting for added information and resolving any undue impacts or roadblocks. If the long-term success of your project requires more research and testing to determine the most appropriate outcome, Agile may be better suited for your organization than Waterfall. By leaving room for course changes throughout the project’s development, you can move fast on multiple phases of a project simultaneously in no particular order and shorter bursts or “sprints.”

Remember that this iterative, repetitive, sped-up, and complex approach to project management will require heightened collaboration among your team and enhanced OCM oversight to be effective. You’ll need to encourage increased communication and a quick pace to get the most value out of this particular methodology. The good news is that you’ll get several wins along the way rather than all at once when the project is finished. You are also likely to be more productive throughout the transition to cloud ERP, as you will retain the ability to address unexpected problems as they arise.

Barriers to the Cloud: How Enhanced OCM Can Help With Generational Gaps

An “Agile” approach to organizational change management (OCM) may be the better choice for your business if you expect to experience any roadblocks on your way to the cloud that necessitate modifications or you are heading toward an unfixed goal or “moving target.” Your team’s culture and “buy-in” (or willingness to embrace change) are also imperative. Generation gaps are common barriers for companies transitioning to cloud-based software programs, operations, and functionalities.

The workforce is currently made up of a concoction of people who were introduced to digital technology at different points in their lifetime. Some workers were born into the era of smartphones, computers, tablets, and digital information. Others weren’t introduced to computers until they reached adulthood. While it can be easy to ignore this generational gap and assume that everyone has been brought up to speed on present digital capabilities, this isn’t always the case.

Excellent or enhanced OCM addresses these digital learning disparities by tailoring awareness and training to the individual. First, it’s necessary to understand a person’s digital background experience and whether they’re a digital immigrant or digital native. Digital immigrants we’re born into the digital era, meaning they’ve had to adapt to various technologies throughout their lives. Digital immigrants include those born between 1925-1980—Silent Traditionalists, Baby Boomers, and Gen X.

Contrarily, digital natives were born into a world of technology and have grown up with digital knowledge. These individuals were born between 1980-present day—Millennials, Gen Z, and Gen Alpha. Gen Alpha has not yet infiltrated the workplace. Millennials are currently dominating the workspace, with 56 million people born between 1981 and 1996 working or looking for work in 2017, according to data by Pew Research Center. As of early 2024, Gen Zers already outnumber Boomers in the workplace and are expected to surpass working Millennials by early 2040s.

Addressing Varying Generational Learning Styles When Transitioning to the Cloud

Gen Zers are settling into the labor force, presenting unique challenges to management because they are presumably not as socially savvy as Millennials, having spent most of their time online. They will also require an attractive day-to-day experience, meaning organizational change needs to be as low-stress as possible to avoid reduced employee morale.

Gaps in learning found within the two categories of digital generations—and within each generation—might also be present based on the period they were born into. For instance, while both Millennials and Gen Zers are considered tech-savvy, a Millennial who was born just as the internet was being developed in the early ‘80s might not be as fluent as an early-generation Gen Zer or even later-born Millennial who experienced exposure to newer digital technologies at a much younger age. Likewise, some Gen Xers and Boomers might not have digital fluency, requiring a higher level of coaching and a bit of a learning curve when adopting newer digital applications, such as cloud-based software or operating systems.

Lastly, different generations use digital technology for various purposes, meaning they are likely skilled at different digital concepts while lacking knowledge about other digital functionalities. Everyone is now using digital technology, with many Gen Xers and Boomers using the internet just as much as those who adopted digital operations much earlier or were born into it. The main differences exist in how each generation perceives and uses the technology.

Research reported by Forbes revealed that CFOs saw the most significant generational gaps in the areas of:

• Communication skills (30%)
• Adapting to change (26%)
• Technical skills (23%)
• Cross-departmental collaboration (14%)
• No differences (7%)

More recent findings demonstrate that communication preferences still rank high on the list of most prevalent generational gaps, followed by work ethic, approach to authority, technical skills, feedback and recognition, and adapting to change. Understanding these differences among generations is vital to effective organizational change. OCM must account for generational gaps and varying generational learning styles to ensure a smooth transition. An enhanced OCM approach can offer customized training and management styles rather than accepting the typical “one size fits all” fallacy.

The following chart outlines ways in which different generations perceive, struggle with, excel in, or use digital technology:

Baby Boomers	Gen X	Millennials	Gen Z
More cynical about change likely due to the drastic shift in workplace experiences	View change positively – “as a vehicle for new opportunities”	Tend to favor collaboration and in-person interaction	Similar to Millennials in communication styles
More reserved in communication	Expects change in the workplace	Appreciate coaching over the more traditional top-down authoritative approach	This group is unique in that they are the first to have 24/7 access to the internet from the day they were born
Learn best via “traditional instructor-led courses or self-learning tools”	Learn best via “traditional instructor-led courses or self-learning tools”	More likely to embrace change and are accustomed to it	Accustomed to on-demand information, a constant stream of entertainment, and instant communication, but unlike preceding generations who tend to use technology primarily for access to information, this group wants to be entertained when connecting to the internet
Tend to prefer manual input of information for transactions	About three-quarters of this group are on social media but take measures safeguard their private information and limit oversharing	Learn best via “collaborative and technology-centric” methods	95% own a smartphone, 83% own a laptop, 78% own an advanced gaming console, and 57% have a desktop computer, and many are dependent on the internet with 69% becoming “uncomfortable” after just eight hours of no internet access and 27% not being able to go more than one hour without connecting to online services
Are willing to take advantage of online services but still prefer the sharing of sensitive data via phone or in-person (in other words, they still have security concerns about digital technologies)	Facebook is their preferred social media platform with nine in 10 using it for approximately seven hours a week	Value communication and an enhanced work-life balance	Snapchat, TikTok, and Instagram are the most popular social media platforms among this group
88% of Boomers say they will continue using technological services made available during the COVID-19 pandemic, according to a survey, because they appreciate the convenience	Gen Xers love TV as their preferred choice for media consumption (about 165 hours a month), but also still read newspapers, magazines, and listen to the radio	These are the first true digital natives with 73% saying technology is most useful to improve work-life balance and provide added convenience via services like online banking	40% of Gen Zers consider WiFi more important than bathrooms

Partnering With Oxford for Your Move to Cloud ERP

Oxford understands that every business and every person within that business is unique—approaching change in different ways with varying perspectives and challenges. When you transition your organization to cloud ERP, you must partner with someone who can help you achieve your goals while accounting for any opposition to innovation and digital advancement, including your employees’ distinct backgrounds and learning styles.

Skipping an enhanced and effective organizational change management (OCM) methodology that allows for flexibility and continual input throughout the digital transformation process can have detrimental effects on the long-term success of your project. To best ensure your employees’ dedication to the change, minimize disruptions, and eliminate or break through barriers, you need an OCM model that works to overcome these obstacles.

By going above and beyond the traditional route of linear planning, development, implementation, and training, you can achieve far greater outcomes when you adequately address your organization’s needs in a way that allows for variables—an inevitable part of business and life.