Before beginning any ERP project, it’s critical to ensure that the entire organization understands the reasons and strategy behind the move.  Since ERP systems touch nearly every facet of an organization, you’ll need to justify investments by securing buy-in across your company.  If decision makers do not clearly support the need for change, your budget and resource planning may be negatively affected.  If project members and end users don’t understand the objectives, confusion can prevail over purpose and commitment, increasing resistance to change and reducing the chance of success.  If you don’t have sufficient buy-in, your ERP project is likely doomed for failure.

Clearly Define and Communicate the Need for Change

Define the need for change by developing a clear picture of how the organization will benefit from this initiative.  This can go a long way in generating enthusiasm for the implementation and making sure everyone is on board.  Early, frequent, and progressive communication long before the ERP system is implemented should explain the need for change.  Employees need to know the reasons for adopting the new ERP system and how it will help the organization.  Employees and leaders at every level need to know what the transition involves, its benefits, and how their tasks will change once the system goes live.

Articulate and Endorse the Vision

Spend time upfront communicating why this change is necessary and what will happen if you don’t change.  The future state is the basis for your company’s understanding and ultimately their buy-in to the project so it’s critical that each of the key stakeholders of your business processes be involved.  Leaders, particularly in areas likely to be affected by the new system, need to cascade this message to the rest of the company.   You will likely encounter employees who aren’t on the core team who will see further possible improvements that can be considered or added.

Estimate your Costs and Commitments

Prepare for the big questions: What are your expected ERP costs?  The Total Cost of Ownership (TCO) of an ERP system is calculated by always using the purchase price and implementation costs of the ERP system, but must also include the operating costs for the 5 to 10 years the system will be in production.  The TCO for an ERP system is determined by combining these factors, and careful analysis of these components of cost needs to be part of a true ERP cost calculation:

  1. Software fees: For software license, deployment (cloud vs on premise), data migration, configuration, and maintenance
  2. Implementation people costs: For consultants and staff time to implement, train, and adjust to the new system
  3. On-going infrastructure expense: For maintaining or replacing hardware, Networking equipment, and user devices
  4. On-going people cost: For contractors and staff for hardware and networking support, software upgrades, bug fixes, integrations, and custom development

Be clear on the budget and resources required to support the project, and determine the resource ramp-up plan so the project doesn’t stall at the start.  Also, make sure everyone involved understands the commitment required from all parties.  This will help avoid confusion when competing initiatives inevitably arise.

Establish a Comprehensive ROI (Return on Investment)

Comparing your current business processes to your future state process map will allow you to establish a comprehensive Return on Investment (ROI). You should also consider improvements in specific areas of your business including inventory control, invoice management, understanding of the customer, increased visibility, and more.  ROI analysis is the process of identifying the expected direct and indirect costs of the project compared to the benefits, both over some reasonable lifetime – typically 5 to 10 years for an ERP system. Every company’s situation, needs, and solutions are different and therefore each company’s costs and benefits will be different.  If the return is sufficient to meet buy-in from leadership, the project can be given the green light.

Implementing an ERP system will is a big project.  It will always require a lot of work from everyone involved but by following these tips you can secure organizational buy-in early on, keep your project on track, your team engaged, and your business thriving.

Contact us for help with your implementation project today!

This post is an excerpt from our ERP Buyer’s Guide which is available now for download.

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