Communicating the value of implementing or upgrading an outdated ERP system can be a relatively simple matter if the benefits are articulated clearly and an acceptable ROI can be demonstrated. In a public sector organization such as a tribal, state or municipal government or other taxing authority, your “constituency” is often comprised of voters or taxpayers. The decision to implement or upgrade an ERP system is rarely made directly by the voters themselves. Voters typically delegate these decisions to an elected board, commission, council or legislative body that will have the final say in funding an ERP project. However, votes should be considered stakeholders in any ERP project.
Since the economic downturn began in 2007, many public sector organizations are seeing tax revenues decrease due to decreased property values, user fees and sales taxes. As a result, more austerity measures are being pursued and expenditures are being closely scrutinized. Now, more than ever, an organization needs a solid business case to prove that the new or upgraded ERP system will provide tangible and intangible benefits for the funds being spent. I once had a County Administrator tell me, “Your main objective as a civil servant should be to keep your name out of the newspaper.” One of the easiest ways to get your name in the newspaper is to spend funds on a project that has a negative return on investment or is otherwise wasteful of taxpayer dollars. This is especially true if other services are being cut or downsized. That said, this blog will focus on some of the selling points or “hot buttons” for elected officials and helpful techniques for presenting them.
Following are three “constituent-friendly” reasons that are relatively easy sells for bringing in a new ERP system or upgrade:
1. The need to maintain or increase delivery of services to citizens. Whether you’re automating the process to pull a building permit or enabling a quicker response to an open records request, tangible benefits can be pretty convincing to the taxpayers.
2. The need to improve the performance and efficiency of current operations. This is often sold under the guise of, “You’ll be able to reduce headcount with leaner processes.” While that doesn’t necessarily need to be a selling point, citizens and elected officials like the idea of slowing the rate of growth of FTEs and being able to do more with less.
3. The opportunity to consolidate systems that may have evolved piecemeal over time and likely are not integrated. Local governments and smaller agencies are notorious for keeping much of their data in spreadsheets or small “shadow systems” from the enterprise view. These systems can be an auditor’s nightmare and are susceptible to local hard drive crashes, fraud and other catastrophes. Pulling information together from disparate systems can also slow delivery of the Comprehensive Annual Financial Report (CAFR).
Todd Leopold, the current County Manager of Adams County, Colorado and a veteran of numerous ERP implementations and upgrades cites some benefits that can be realized by implementing an ERP system. Leopold says, “Benefits can come in the form of immediate upfront cost savings or as a stream of future cost reductions.” An example he provides is that by consolidating systems, maintenance agreement costs can often be reduced. Another, less quantifiable example is the elimination of duplicate effort and similar data stored in multiple locations. In terms of presenting these benefits to elected officials, Leopold offers three tips:
1. Keep it simple. Narrow the list to no more than three to five specific items and do not overwhelm them with details.
2. Do your homework. Board members, council members and legislators come from all walks of life and have a variety of strengths and interests. Just like in any sales pitch, organizations should do some basic research on their audience. Some may be financially savvy while others may have a keen interest in constituent services.
3. Understand the WIIFM (What’s in it for me?). Elected officials don’t mind getting their names in the newspaper if it’s for a good reason, such as bringing better technology and services to their agency. Highlight the benefits that will make them look good to voters.
Obviously, the proposed ERP project should make fiscal sense, and as part of the presentation to elected officials or other stakeholders, a business case should be developed showing a quantifiable ROI.
The “sale” of the ERP project does not end with the signing of the contracts and project commencement. As constituents move in and out of the district, city, county, etc., and elected officials come and go during the project, there will be new stakeholders who inquire about the project. They may need to be “resold” on a regular basis. Be proactive in your project communications and consider engaging the agency’s Public Information Officer to craft periodic press releases and other communications such as a newsletter or an update on the website.
Above all, if the project does run into problems, address them with your stakeholders before the press can put their spin on it.
Written by Nelson Goodreau, Manager of ERP Implementations at Panorama Consulting Solutions