The importance of ERP implementations and executive sponsorship can not be overstated.
In today’s competitive and volatile economy, the manufacturing companies we talk to are pressured to balance ERP projects against challenging production schedules and workloads. These manufacturers find it difficult to stay within projected time and cost budgets.
Unfortunately, in some cases, challenges that arise during the ERP implementation process can persist long after the go-live.
The Importance of Executive Sponsorship
Senior executive involvement in an ERP project is integral to ERP implementation success.
If there is not strong executive management support and sponsorship, the parties groups left holding the bag – including business process owners, the IT department and functional area managers– feel like they heading upstream into a long and difficult effort.
Engaged CEO involvement is often the exception, and not the rule. In many cases we see the following scenarios:
- The CEO who hands off ERP project leadership to the CFO.
- The CEO who hands off ERP project leadership to the IT group.
- The CEO who delegates sponsorship to an ad hoc team.
We see a direct correlation between the involvement of a CEO and the overall success of the ERP project – the more involved the CEO, the better the chance of ERP success.
Conversely, a CEO who delegates ERP project leadership has a lower rate of success. Certainly there can be good project outcomes, but success is not as likely.
What Success Looks Like
What does a high level of CEO sponsorship look like when it comes to the ERP project?
In our experience, these seven areas are in place for an improved chance for ERP success:
- The CEO has a deep understanding of the business case for the project, along with a sense of the key metrics for ERP success.
- The CEO allocates the proper level of resources to execute the project effectively, including the capital investment for the tech solution, the allocation of human resources for the project, the time for the project, and the right team for selection and implementation.
- The CEO communicates clearly to the rest of the organization the overall value, and the expectations for the project. Communications are company-wide, consistent, and offer specific information about the value and importance of the project to the entire enterprise.
- The CEO relates hands-on with the ERP steering committee made up of project managers with clearly defined responsibilities.
- The CEO insures that the ERP project team includes staff with different skill sets, such as those capable of implementing change, configuring the new business processes or training end users.
- The CEO helps develop and signs off on an integrated project plan with milestones the team can manage, and recognizes the dependencies between the various teams.
- The CEO leads either a formalized decision-making process for the ERP initiative or empowers team members to make decisions.
While not an exhaustive list, when these elements are in place, the chance for ERP success usually follows.
As we noted above, the CEO has a huge impact in getting the word out about the value of the ERP project, and CEO involvement raises the chance of success.
This all comes down to one point: there is a strong business case for the CEO to get involved in an ERP project.