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What is the Executive’s Role in an ERP Implementation?

What is the Executive’s Role in an ERP Implementation?

Over the past decade, businesses generated an unprecedented quantity of patents, products, and profit models. This trend of consistent expansion is accelerating—2015 being one of the most innovative years in history. In order to thrive in this age of explosive growth and competition, businesses must maximize resource efficiency. And, to do this, they must have tools that are in line with the pace of the 21st-century marketplace.

Arguably the most important of these tools is an Enterprise Resource Planning (ERP) software package. Industry leaders consider ERP software the cornerstone of their company’s organizational and operational efficiency.  Yet, some business owners and executives consider ERP software cost-prohibitive due to the oftentimes-shocking cost of adopting and implementing an ERP package. However, businesses can avoid many unnecessary costs, and significantly reduce their bottom line by following a series of steps.

We detailed these steps in a White Paper and broke it down in a series of articles. In the sixth article of this guide, we will explain the role of the executive team and how their behavior will impact the entire project.

Chapter 7: What is the Executive’s Role in an ERP Implementation?

Leadership goes ALL IN

The implementation of an ERP requires feedback, cooperation, and buy-in from the entire company.  Unfortunately, whether it is derived from reluctance to change, fear of job security, or other common emotions that arise from a project of this nature, some team members are not as supportive and enthusiastic about implementations as others.  In fact, it is not uncommon to have employees completely revolt (be it directly or passively) against the implementation. In the industry, these resources have been playfully coined as saboteurs, project terrorists, or troublemakers.  A strong force that can help to eradicate the project of these negative forces is leadership and executive buy-in of the project.

Similar to most team-oriented environments, employees involved in an ERP implementation will look to leadership and management when forming their personal attitudes and opinions of the project. In most cases, team members will emulate their manager’s actions and attitudes towards a project in terms of support, buy-in, enthusiasm, cooperation and optimism. The practice of ‘top down positivity’ helps spread confidence, willingness, acceptance, and energy across the entire organization—which are all catalysts for a successful implementation. On the contrary, the same holds true for the effects of negativity from upper management - they will spread like wildfire, and most likely much quicker than anything on the positive side of the spectrum.

Cost Savings ERP White Paper

Synergy and Bad Energy

Although this may not directly add cost to the project, the indirect effects of low morale, lack of commitment, and an overall pessimistic attitude can result in additional costs.  For instance, in a supply chain management ERP implementation, there are many departments that must work hand in hand to provide proper data, derive operating procedures, assist in training, perform parallel testing, and roll out the software. Each department acts as a unique puzzle piece that is imperative to the overall synergy and proper functioning of the software and operation as a whole.

Let’s assume one of these departments, shipping/logistics, is governed by a veteran manager who does not support the implementation and change.  In order to prove his point and display his disdain for the new initiative, he will do whatever he can to stall, disprove, and prevent the project from success. In this case, the resources within this department have also begun to mimic the negative attitude concerning the project. Throughout the implementation, assignments, data requests, meeting invites, training sessions, and other elements of the project requiring cooperation are ignored and even in some cases rejected by the members of the department, including the manager.  Due to the collaborative nature of the implementation, the company cannot move through the project because of ‘one bad apple’.  This bottleneck and behavior eventually lead to an extension of the go-live date, insufficient data, untested processes and procedures, and a possibly cancerous attitude in the company—all of which culminate into excessive costs and overrun budgets.

“Employees involved in an ERP implementation will look to leadership and management when forming their personal attitudes and opinions of the project.”

In the same example, if executive leadership were to get involved, the culpable managers and departments would be counseled and even reprimanded in order to prevent this string of disruptive events. The best approach executive leadership can take when announcing or introducing an ERP implementation is one that conveys “We are getting on this bus. You can either hop on and enjoy the ride, or you will be left behind.”

In the last article of this series, we will detail the different methods to implement an ERP system. Taking the step forward to implement an ERP software in your company involves changes in the technology you use, but also in business practices and procedures. This makes the very nature of an implementation a complex operation that needs to be calculated and methodically planned. When the time is right, you will be offered several options to implement your new ERP System. This last article will put all of the cards in your hand to choose the most appropriate method for your business.   

The last article is not out yet, but if you want to download the entire white paper “How to cut costs during your ERP implementation: a step-by-step guide to avoid unnecessary costs” now, you can do it here: Download.

Cost Savings ERP White Paper

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About Author

Hunter manages the Consultants Operations at ABIS, Inc. We are making industrial businesses smarter by automating their processes to gain productivity, increase margins and generate more profits.