Convincing executives of the merits of a new ERP system can be an uphill battle for many organizations. While employees closer to the front lines feel the pains of outdated legacy systems, executives often need a more tangible justification for new ERP software.
Many of our clients fight this internal battle for months – or even years – before getting the executive buy-in and support they need for an ERP implementation. Too often, operational inefficiency becomes overwhelming before the organization decides to make a change.
Here are five ways to convince your boss to invest in new ERP software:
- Quantify the negative impact that your current processes and systems are having on your business. Anecdotal examples and people’s intangible frustration with the status quo typically isn’t enough to convince most executive teams that a new ERP system is necessary. Instead, executives want to see the dollars. You should quantify the negative impact that the current state is having on the business. For example, what percentage of customer orders is missed because of an inability to forecast demand, manage inventory or track orders? Better yet, how does this metric compare to your competitors? This type of quantitative ammunition will make a more compelling case for your cause.
- Focus on quantifiable potential business benefits. Just as you want to quantify the negative impact current systems are having on your business, you also want to quantify the positive business benefits that a new system will have on the operations going forward. Nothing sells executives on potential investments as much as a solid return on investment analysis.
- Provide independent and third-party validation that new ERP software will help your business. While the above will help strengthen your case, having the same analysis be conducted and delivered by an independent third-party is even more powerful. ERP consultants and others with extensive ERP implementation experience can be helpful for identifying potential system alternatives and benefits as well as helping define the most realistic roadmap going forward. Side note: make sure that the third-party you leverage is truly independent and not aligned with any ERP vendors.
- Demonstrate what you will do to reduce the risk of the project. Not much scares executives more than risk, so it is safe to assume that most of your higher-ups have read the horror stories about Hershey, Avon, Waste Management, Marin County and all of the other high-profile companies that failed miserably in their implementations. Rather than trying to hide from the risk, highlight your risk management plan to identify and mitigate risks as they arise. It may help to go one step further and identify risks that you and your consultants see early on and share your plan to mitigate existing risks.
- Underscore the change management activities you plan to leverage to make the project successful. Most executives understand that an ERP implementation won’t be successful without effective organizational change management. Instituting a focus on change management will help proactively mitigate the ERP implementation risks that most organizations face.
Not every boss or executive can be sold on a new ERP system – and some are too risk adverse to do anything until the organization can simply no longer function in the current state – but by addressing these selling points, you may be able to pave the way to new ERP software for your entire organization.