ERP is Not Easy So Why Do it and Who Should Lead It

Deciding to go with an ERP solution can have two results: failure or success. The degrees of failure can range from something as small as going over budget to as a large as pushing a company into litigation, and in more rare cases, bankruptcy. Why take the risk? It is for the potential benefits that can come from breaking down the walls of silo legacy systems and creating an environment of real-time communication of integrated data, leading to improved operational efficiencies that could only be done with ERP. Every project needs a champion and a recent CFO.com article argues that the CFO needs to be the one who owns the project as they bear the risk of its failure. In doing so, risk champions help to express the importance of the solution throughout the company and make sure everyone understands the changes and how they add value. Behind every great ERP implementation is a great CIO and CFO. While the CFO owns the project, the CIO should be a key ally throughout the project.

The Paved Road of Past Failures – Five Sources of Failure

ERP changes the way a business runs, not simply helping a business run. In the article, the authors describe an ERP implementation example that failed. The story highlights that even the most well thought out ERP plans will fail if not done right. The question is what is right? Thanks to the failures like the example in the article, the authors compiled a list of five common ERP mistakes:

  • Selecting the wrong ERP solution
  • Choosing program leadership too low in organizational structure
  • Assuming the ERP is an IT project, rather than a business project
  • Ignoring the need for talent experienced in your ERP solution
  • Underestimating ERP project timeline  

The Right Way to do ERP – Five Critical Success Factors

The authors of the article asked ERP-experienced Chief Information Officers what they felt were critical success factors in ERP projects. While there is not one critical success factor, the article presents five factors CIOs believe ERP champions should know about their ERP projects;

  • Understand the benefits of the ERP solution
  • Don’t ignore the post-implementation support
  • Don’t underestimate the importance of master data governance
  • Prepare for an initial dip in business performance
  • Don’t put too much into your ERP system until you know the basics work

What is the Correct Approach to an ERP Project?

Former CFO and VP of business systems at Coca-Cola and current CEO of Brand Velocity, Jack Bergstrand, was interviewed in a Q & A format by the authors of the article. Mr. Bergstrand believes that speed of implementation is key. Given his background with major implementations and restructurings, his answers to some of the following questions could shed light on how to approach your ERP project.

  • What is the key to doing major IT restructuring well?
  • Why do companies fail to see the difference between information and knowledge?
  • Why the focus on speed?
  • What other major IT challenges do companies face?

While not an exhaustive list of the questions answered by Mr. Bergstrand, the inside information he shares in the article could be the difference between success and failure in your own ERP projects.

Summary

ERP projects are challenging, but the rewards far outweigh the costs, if ERP is right for an organization. Over the years, executives have heard the large scale failures and successes. There is no need to reinvent the wheel – they can learn from those that already down the path. The article provides a general guide to ERP success. Just remember, ERP solutions change the business, not just the IT.

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