Focus on People
ERP Implementation Top-down or Bottom-up Which Change
Management Approach is
more effective in the Long Term?
more effective
Top-down and bottom-up - these are two management styles being used in change management in companies. Both have their advantages and disadvantages, but which approach is more effective overall for your ERP project - should you implement the change from the top down or from the bottom up?
Change Management: an Essential Component of ERP Projects
Effective change management helps to successfully manage the transition phase to a new ERP system and ensure acceptance of the change among your employees. ERP projects often involve far-reaching changes with regard to business processes and daily work - this can lead to resistance in the team. With a good change management, these changes can be successfully implemented not only on a technological level (new software), but also on a human level.
In particular, changes can be initiated and implemented top-down or bottom-up. What is behind these two terms?
Top-down: The Traditional Way
“Top-down” means that the changes are initiated and controlled by the company’s management level. The management sets clear goals and targets, which are then passed on to the employees. This approach is often found in large, hierarchically structured companies.
Bottom-up: The More Innovative Approach
In contrast to the top-down approach, the bottom-up approach means that change comes from the lower levels of the company. Here, employees are specifically involved in the decision-making process: their ideas and feedback are crucial for the development and implementation of change. This approach promotes greater employee involvement and open communication within the team.
Top-down and Bottom-up in Comparison
| Criterion | Top-down | Bottom-up |
| Decision Making | Centralized, fast decision-making processes | Decentralized decision-making processes |
| Acceptance of Change | Possible resistance if employees do not feel involved | Higher acceptance as employees are directly involved |
| Employee Motivation | Often lower as they are less directly involved | Higher through involvement and co-determination |
| Innovation Power | Lower, as decisions mainly come from the management level | Higher, as employees can contribute creative ideas and solutions |
| Speed of Implementation | Fast, as decisions can be made and implemented in a short time | Slower implementation, as more discussion and consensus building is required |
| Sustainability of Change | Sometimes less sustainable if employees are not fully involved | Higher likelihood of sustainability through employee support |
| Flexibility | Less flexible as the change is determined by management | Higher as the change is influenced by employees at lower hierarchical levels and often adapted to their needs |
Which Approach is Best for your ERP Project?
Top-down and bottom-up each have their advantages and disadvantages and their own challenges. But which approach will be most effective for your ERP project overall if you have to choose between the two?
While a top-down approach provides a clear direction for your change management, it is often not enough in terms of employee engagement.
In general, it can be said that bottom-up is better for your ERP project in terms of change management - unless you have your back to the wall and need to make and enforce a decision quickly.
The Advantages of Bottom-up Change Management for your ERP Project
1. Stronger Focus on the Needs of the Users
A bottom-up approach involves the users directly in the selection, design and test phases. This ensures that the ERP system is not only technically mature, but also useful and functional in practice.
In the selection phase, users can be involved through surveys or workshops, for example, in which they evaluate various ERP solutions and contribute their experience and specific requirements. This will ensure that the system you choose is accepted in the long term.
2. Less Resistance and more Employee Participation
A bottom-up approach to change management has the potential to transform employees who were initially opposed to the implementation of the new ERP system into active advocates and pioneers of change. By involving employees in the process from the outset, you not only reduce resistance but also encourage genuine support for the new ERP system.
3. Culture of Continuous Improvement
A bottom-up approach helps to establish a culture of continuous improvement in the company, in which employees can continue to make suggestions for improvement even after implementation of the ERP system. This ensures that the system remains relevant and efficient in the long term.
4. Adaptability and Risk Management
ERP projects often entail uncertainties and risks. A bottom-up approach based on continuous feedback and flexibility enables your organization to better manage these challenges. The constant exchange with employees helps to identify and solve potential problems at an early stage before they become major obstacles.
Conclusion: the right Change Management Approach and other Success Factors
Even if the bottom-up approach is generally more advisable for ERP projects: in the market environment, sometimes speed is also of the essence. In such cases, a top-down approach may be the better option. If you opt for a top-down approach, you should make sure that your employees can understand the decision and the procedure.
After all, it is not only the choice of change management approach that is decisive for the success of a change, but also the way in which you implement it. Clarity, communication and the right balance between leadership and participation are essential to ensure that the changes are successfully and sustainably anchored in the company. And that should be your goal when implementing a new ERP system.
