Sophisticated HR no guarantee for success

A.B Susanto, Jakarta Consulting Group

Encouraged by the desire to improve working efficiency, a multinational executive implemented a new system and strategy established by the head office. However, it turned out the strategy, which had been designed with extreme care and due consideration, failed to achieve the expected goals.

Systems and strategies are not the only factors necessary to guarantee corporate success, and failure is attributable not only to an inaccurate system and strategy. This executive was lucky. Other multinational companies that implemented similar policies have sometimes had to face even worse consequences: a prolonged demonstration by workers, for example.

A company cannot rely purely on its systems, structures and strategies. The availability of sophisticated human resources cannot even guarantee that the system will work smoothly. More often than not, a well-established system does not fit harmoniously with its corporate culture.

There are always cultural risks if a company wishes to make a change, especially if the corporate structure is different from the "environment" in which the system was developed.

The principles of cultural relativity are often ignored, but undeniably, cultural factors represent one of the determinants of the success of a new system. This explains why sophisticated and complicated ERP (Enterprise Resource Planning), supported by advanced IT, often fails when implemented within a cultural habitat that is different to the one where the system was developed.

One tends to ignore cultural factors when one is to implement a new system. Many companies in Asia have failed to implement ERP that has been developed in an "environment" culturally different from their companies'. Despite the huge amount of money spent, they are reluctant to admit failure, and instead, blame themselves, wondering why the sophisticated system did not work at their company.

Cultural synchronization and compatibility with a system must always be maintained to minimize the cultural risks that always accompany a change in strategy and system.

There are some approaches to adopt to get this synchronization: Change the culture so as to make it compatible with the system/strategy, or vice versa. Or adapt the system to the prevailing culture, or the other way round.

If a company decides to boost its competitive edge and makes changes in its strategy and system, it should make an analysis about its cultural compatibility with the strategy and system to be implemented and conduct a study with regard to their adaptability to the existing corporate culture.

An analysis of cultural risks must be included in the process of strategic planning, enabling the guidance for strategy implementation to cover culturally oriented approaches and allow culture to be embedded within a system.

To ensure effective implementation of ERP, a company must have a committee on cultural compatibility established outside its implementation consultants. The aim is to enable the team, consisting of independent consultants, to conduct an objective cultural analysis and to provide inputs regarding the cultural modification required. Apart from that, a company needs to have a "benefit realization program" during the process of ERP implementation to ensure the best use of investment and the effective achievement of the benefits offered.

The essence of this approach is that whatever system is implemented, humans will always be the key factor to success.