How much time is this going to take? How many people and who should be involved? Those are the most common questions we’re asked during the sales cycle.
In this podcast, Laura Florence, Panorama’s Director of Business Development, answers these questions and more regarding the internal resources needed for an ERP project.
How do you determine the internal resources needed for an ERP project?
There are three levels of engagement:
- Executive Sponsor – This person is often the head of the company, and they’re the driver, figurehead and the spokesperson for the project. They help define how this project is going to support the goals of the company.
- Steering Committee – The executive sponsor is part of a steering committee. This committee is typically going to be engaged a couple of hours a month. They are the ones that are going to give the approvals if there is a need for additional time, budget or resources. It’s important they stay engaged all the way through the lifecycle of the project.
- Core Team – These are your work horses. They are going to be engaged from day one until go-live, helping to define what they need the new ERP system to do. This team includes subject matter experts (SMEs) and super users that you’ll bring in to help represent each functional area. It’s important to ensure their voices are being heard and their needs are being defined.
How do you determine how much time commitment is required for the different levels?
The consulting answer is “it depends.” Let’s say you are a small to medium-sized firm where each person has a variety of different roles. In companies like this, your executive sponsor on our steering committee may also be part of the core team.
So, not only do they have the final say, but they also have the ability to dedicate budget and resources as needed. In other words, they’re determining the vision and the mission of the company, and they’re also very engaged in the project itself.
On the other hand, if you have a much larger organization, your steering committee could be your board of directors, so these people will typically only be engaged a couple hours a month.
Change Management Case Study
We helped this manufacturing organization prepare its employees for new technology and processes.
Regardless of the size of your organization, an engaged steering committee is essential. If your steering committee throws up their hands the first time the project hits a bump or the first time there’s a need for resources, then the project will stall.
In terms of core team engagement, this is going to change over time:
- When you’re determining functional requirements and designing your future state . . . You’re going to need the core team full-time.
- When you’re sending out request for proposals and vendors are preparing their demos . . . Here, the core team might be engaged in helping with demonstrations scripts, but this phase requires much less engagement than earlier in the project.
- During vendor demonstrations . . . The core team must sit in a room for eight to ten hours a day for multiple days.
- When your consulting team is reviewing the updated proposals, putting together the business cases and making a final recommendation . . . The core team is less involved.
- During pre-implementation . . . For some companies, this could be a lull for their core team, and for others, it could be where the core team starts to ramp up to being full-time. We often recommend making the core team full time because pre-implementation is an opportunity to define business processes and make business decisions before you begin ERP implementation. When you do this, you’ll be far more effective during your design phase with ERP vendors. For example, let’s say you know that the new ERP software is going to have workflow automation, and you want an automated approval process for invoices. If you have different levels of approval authority based on user status, you need to outline this during the pre-implementation phase. This way, if you go into that design session and the vendor asks what you want for your approvals, you can provide an immediate answer instead of making a decision on the fly. Essentially, the pre-implementation phase is when you start really engaging your core team to make as many business decisions as you can in advance.
- During implementation . . . The project becomes a full-time job for the core team. Based on the size of your company, the team may be wearing multiple hats. In other words, they may still have to be doing their day job. However, if at all possible, you should try to take your core team off of their day job.
Overall, the engagement of each group ebbs and flows. For example, your SMEs definitely come in and go out as needed. They come in during requirements and then they leave. They come in to watch the demos and give their feedback, and then they leave. They’re pulled into design sessions and then they leave, etc.
These are considered IT projects, right? Does that mean they fall under the CIO most of the time?
While we are often brought in by the CIO, CTO or CDO, ERP projects are absolutely business projects. The IT department is engaged because you are working with technology, but you need engagement from across the organization. Any functional area that will be touched by this project must be engaged for the project to succeed.
What does it really take to be a successful executive sponsor?
Again, the answer will be different based on the size of the organization. The one success factor that doesn’t depend on the size of the organization is regular communication from the executive sponsor. They need to “walk the floors,” and they should discuss the status of the project in every executive status meeting.
For a small organization where the executive sponsor is also part of the core team, this engagement is even more important.
ERP projects have a major impact on your people. In fact, organizational change is experienced at an individual level. As such, your executive sponsors and project managers must be available to reassure employees and explain what the project means for them individually and to the organization as a whole.
If you’re a small company and don’t have somebody to serve as a dedicated project manager, could Panorama Consulting come in and serve as the project manager?
Absolutely. We want to support our clients the way they need to be supported.
Some clients need minimal support. For example, if we have a client that has a dedicated project management office or has hired a dedicated project manager, we can come in and just visit with the project manager and take a look at the project maybe once a quarter to provide independent verification and validation.
On the flip side, we can run the project “soup to nuts.” In this capacity, we take on the responsibility of managing the vendor resources, system implementer resources and any other resources the organization brings in.
How can a company ensure they have a successful project manager in place?
History is the best predictor of the future, so you want to ensure that the person responsible for a multi-million-dollar project has a track record of ERP success. They need both ERP experience and project management experience.
Project management involves scheduling tasks, managing the timeline, managing the budget and scheduling meetings. While this is a very important role, it is not going to be enough for an ERP project because this type of project is all-encompassing and has a significant impact on the organization.
As such, you need someone who can build relationships and understands how the initiative is impacting the organization.
One thing to consider when you designate a project manager is that this could be a year and a half to five years of their life. That said, you need to decide what happens once the project is complete. Do they go back to their day job – is it going to still be there for them? Do they shift from being on the core team to creating and maintaining a center of excellence?
What are some tips on how to retain project team members?
It’s important to manage expectations. If the executive sponsor puts an arbitrary line in the sand for the go-live date, it probably won’t be a real go-live until you fix everything that wasn’t implemented properly. Chances are, there’s a lot that wasn’t implemented properly because you were in a hurry to go live on an arbitrary date.
All that to say, it’s important to have realistic expectations of what can be accomplished within a certain timeframe.
The second tip is to focus on organizational change management. This should be done in three phases: preparing for change, managing change and reinforcing change. During these phases, you should think about how to get people excited and how to communicate “what’s in it for me.”
How many people are typically on a core team?
I have seen core teams of over 30 people. This makes sense for very large organizations that are taking on the responsibility for a lot of business process management work and change management work. These organizations are also working hand-in-hand with implementers from a business design perspective.
However, if you are a smaller firm, your core team might be five to seven people. Regardless of the size of your organization, you need a minimum of five to seven people on your core team.
Beyond the core team, you have your steering committee. This could be just a handful of people, or it could be your entire board of directors. Then, you have your subject matter experts, which can be a cadre of another 30 people.
Is there anybody else we haven’t mentioned that organizations may forget to include?
Influencers are people who have either been with the organization their entire careers or they’re just really charismatic people within your organization. They’re not part of the core team, and they’re not necessarily a SME.
Influences should be walking the floors and talking to employees to get them fired up so they will fire up the folks around them.
How important is it to get customer feedback?
We have had clients say that the fact that they are doing an ERP project has to remain completely under wraps because they serve big box companies. If these companies find out that your company is going through an ERP project, they are going to downgrade you as a vendor.
We’ve had other clients who reached out to their customers as soon as the project began. They said to their customers, “We want to be easy to do business with. We want to be your number one vendor. What does that user experience need to be for you?”
These clients used this customer input to define the functional requirements of a new system.
What if you have one very large customer that insists on doing business completely different than everybody else – is it worth it to make those ERP customizations?
This is almost like a vertical integration – you’re customizing your system so you can continue to do business with a particular customer in a seamless fashion. If this customer is 60% of your revenue, that might make sense.
However, who’s going to pay for it? You might need to ask the customer to provide a couple of resources during your design sessions.
Is working on an ERP project really a full-time job?
During implementation, it is absolutely a full-time job. While this is a lot to ask, tying project success to compensation can be a good motivator.
However, some people will inevitably get burnt out or leave the company (for project-related reasons or personal reasons). That said, you want to staff your project team with more than one person per functional area.
You also want your core team to have some upstream and downstream and experience within the organization. For example, you want to ensure your accounting SME understands how finance and accounting ties into purchasing, supply chain, etc. This way, if you lose somebody, it’s not as much of a loss.