You know that your organization’s business processes are inefficient, but your boss just said “no” to your plea for new ERP software. What do you do?
First, ask yourself, how did you propose the idea to your boss? Was there a compelling vision for the system that is consistent with your organization’s vision? Did you speak in terms of business value? CEOs typically have a vision of how their organization should run, and this vision is based on business value. They may also have pressures from the board of directors or have private equity to meet financial objectives. ERP systems are expensive and implementations are disruptive. In order to make a commitment to a large project like ERP, you must show clear financial benefits.
Often, CEOs do not have a clear picture of exactly what obstacles prevent their organization from running efficiently. A CEO needs people who understand those details and yet have the ability to summarize information and create a compelling vision. Are you that person? If so, here are some suggestions on how to proceed:
1. Understand Your Business. What differentiates your business in the marketplace? What drives customers to purchase services or products from your company instead of the competition? What kind of changes could be made to your processes that could improve your company’s ability to compete? In order to make a compelling case for a new ERP system, you must quantify the benefits in economic terms.
2. Understand the CEO. Learn the CEO’s vision and success drivers by reading or listening to statements made at company meetings, board reports or company vision statements. You can also learn from listening to the CEO’s reasons for rejecting the proposed ERP implementation. Find out how other initiatives have been presented to the CEO in the past, and consider these as lessons learned.
3. Understand the Problems With the Current Systems. Some common problems include:
- Users of the legacy systems complain that they have to manually re-enter data from one system to another
- Inconsistency of data between systems
- Lack of timely, accurate information
- Many hours spent combining data from disparate systems in order to do analysis and reporting
- Valuable information is not being collected or analyzed because the current system does not have the capability to manage the data.
- Different locations or departments perform processes differently
- Manual process steps are executed outside of the system because the current system does not support them.
4. Seek Alliances From Other Functional Areas. Problems with systems and processes generally occur in multiple departments of an organization. Bright, business-oriented leaders throughout your organization may have similar frustrations as you do and have a vision for process improvements. Cross-functional teams within the business are good places to build relationships and discuss common problems that could be solved with a new ERP system.
5. Create a Business Case. Employee complaints can be a good starting point for a business case. In order to generate a compelling case, you must quantify the projected customer service improvements, savings in labor hours and other potential benefits.
The tables below are a good way to get started in organizing this data:
To complete the business case, you’ll need to project the savings overtime and compare it with the implementation costs of the ERP system.
6. Seek Outside Help. If everything mentioned thus far has seemed a bit overwhelming when combined with your daily work load, you may not want to devote too much time to formalizing process issues. A business case also may not be possible for you to do alone. Specialized consulting firms can help with business process reengineering, building a business case and selecting an ERP system that fits your organization.
When the CEO says no to a new ERP system, don’t assume that the idea is dead. Think about your organization’s and consider ERP software a business tool, not just new technology. If the economic benefits are clear, you are likely to be successful in convincing your boss that a new ERP system is the right move.
Learn more by downloading Chapter One of An Expert’s Guide to ERP Success.
Written by Ed Spotts, Senior ERP Consultant at Panorama Consulting Solutions.