We have all heard the phrase “there is no ‘I’ in team.” That phrase has meaning not only in a personal manner, but also in your professional life—especially reigning true when you’re trying to implement a new ERP system. Selecting and implementing a new ERP is a team effort. Generally speaking, most of our clients involve multiple team members, stakeholders and executives in the decision, planning and implementation process.
However, none of that effort matters if your boss isn’t on board with the new investment. Whether you are an IT Manager trying to convince your CEO and CFO, a project team member trying to convince your IT Director, or you are involved in any other role with a superior, executive buy-in and involvement will be critical to your project’s success.
We commonly hear five questions from our clients’ management and executive teams. Here is a quick guide on how to answer each:
- “Why do we need to invest in a new ERP system now?” There is never a good time to invest the time and resources in a new system, but implementations generally get riskier over time. The longer we wait, the more our broken and inefficient business processes will cost us. Just as importantly, our implementation will become more complicated, risky and expensive the longer we wait to replace our current environment. Also, the sort of change to our business that we are talking about here is going to take a good deal of time, so it is better to start sooner – before we find ourselves in even more of a bind later.
- “Why is our new ERP system going to be so expensive and why is it going to take so long to implement?” ERP implementations are business transformations, not just IT projects. According to research (see Panorama’s 2015 ERP Report for more detail), the average company takes roughly 18 months to implement their solution. They also spend approximately 4% of their annual revenue on their total cost of ownership. Based on where we fall on the spectrum relative to the “average” company in the study, we may spend more or less than that, but that is a general benchmark to gauge reality. Doing this project right the first time will be much less costly and time consuming than the alternative.
- “What are the biggest obstacles to achieving a solid return on our ERP system?” There are plenty of risks to achieving the ROI we expect, but we can mitigate these risks through proper implementation best practices. For example, taking the time to document our desired future state business processes, effectively addressing employee resistance to change through organizational change management and developing a solid benefits realization plan with target levels of performance will all optimize the odds of achieving our goals. We also need to ensure that we have the right ERP consultants helping us with this initative to further mitigate risk.
- “Why do we need to worry about documenting our business processes?” This is a good question that is commonly asked by executives. Many think that we should ignore current processes because they are all about to change, or that we should simply adopt the new ERP system’s business processes rather than documenting our own, but these approaches are proven not to not work very well. In order for us to understand what kind of software will work best for us, we need to clearly define our desired processes and business requirements. Today’s ERP systems are very robust and flexible, so we need to define how we want our processes to look so we can effectively configure and implement the system. This approach to business process reengineering will ultimately make our implementation more efficient and effective – saving us considerable time, money and heartache along the way.
- “Why do we need to worry about organizational change management when we are going to simply tell employees that they need to accept these changes?” You’re right that one approach is to simply “force” employees to change. However, that only goes so far. Employees may not consciously or actively intend to resist the changes, but because the changes are going to be so extreme for most employees, they simply won’t be able to comprehend and adapt to the changes without effective organizational change management. This is why our organizational change management plan needs to include more than basic end-user training – we also need to incorporate communications, change impact discussions, customization of training materials and a host of other organizational change activities to ensure we minimize costs and maximize the return on our investment.
While there is no E-R-P in T-E-A-M, they go hand in hand. While there may not be a guarantee or silver bullet for managing your ERP project’s ROI, the above responses should help your superior feel more comfortable about investing in your ERP initiative the right way.
Learn more by registering for our ERP Boot Camp in Denver on February 17-19.