Why CEO Commitment is mandatory for an ERP Project Success?

Why CEO Commitment is mandatory for an ERP Project Success
Most of the time, CEOs think their job ends when they get approval from the board for an ERP implementation budget. It is foolhardy to assume CIOs or CFOs or ERP Directors will be able to drive an ERP implementation project towards success because the truth can’t be farther than this. Let’s look at a few factors as to why CEO Commitment alone can ensure the success of an ERP Project.

ERP is like the Neural System

Implementation of ERP is not a windows upgrade project where it’s enough to commit the budget and forget. ERP project is like the neural system of a body and it connects and impacts every section of the organization. Wherever there is money involved in an organization, ERP is involved. It is hard to find corners of an organization which are not connected to money. Hence the impact of ERP is literally in every nook and cranny of the organization.

ERP can disrupt or distract when handled badly

With its reach being so profound, ERP has the ability to disrupt or distract the core operations. It is not very uncommon to hear stories of production suffering, salaries delayed, halted distributions or delayed MIS and many other problems. Hence it is imperative for the CEO to commit his/her complete mindshare for the success of an ERP implementation project.

ERP is not about Cost, but creating Profits

ERP Project is not about spending money, but about

  • conserving cost by building replicable processes
  • avoiding leakages by improved visibility
  • saving money by building efficiency
  • information transparency to make timely decisions
  • reduced Inventory
  • reduced working capital

Each one of the above factors has the ability to reduce costs which has a direct impact on the bottom line of the organization. CEO’s should be ignoring them at their own peril.

ERP will stay with you for Decades

The implemented ERP is going to be with the organization for decades to come and hence, getting it right is very essential. Failure to do so will create sub-optimal ERP implementations for which the organization will pay the price for the rest of times to come.

CEO alone can solve project disputes:

Inherently, ERP implementations will create fissures between departments and none other than the CEO can resolve those issues which erupt along the way of any ERP implementation project. As ERP cuts across multiple departments during an implementation, differences of opinion usually does not get resolved in the lower levels of the organization. The absence of timely decisions and resolutions will create a glut in the project thereby thwarting the success.

CEO alone can rally the entire organization:

As enumerated above, ERP implementation project is not like a windows upgrade project which could be steered by CIO’s alone. Entire organization’s co-operation is required for the success of an ERP Project and every business head needs to get involved in the project’s success. Hence it is important to rally all the teams towards success. Typically CEO is the only person in an organization who is capable of making that kind of a cohesive march happen. The cost of failing to rally the organization will invariably produce sub-optimal outcomes or failures.

Maran Nagarajan

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