The Role of the CEO in ERP Success
“Good Business Leaders, create a vision, articulate the vision, passionately own the vision, and relentlessly drive it to completion” – Jack Welsh
As a company that has been involved in implementing ERP software for Manufacturing SMEs for more than a decade, we have worked closely with more than 70 companies to carry out ERP implementation. It is our experience that the Role of the CEO is critical in ensuring ERP Success.
The passion & vision of the CEO in implementing an ERP, his role as a mentor and driving force in motivating the entire organization and rallying the teams, is critical in ensuring the success of an ERP in the organization. Let us now share with you some examples of how the CEOs help ensure ERP Success
Role of the CEO in ERP Success
- Build a Data-Driven Culture
- Define ERP Success Criteria
- Allocate Funds/Finance
- Develop ERP Project Team
- Continued Involvement in ERP implementation
- Vision for the future
1. Building a Data-Driven Culture
CEOs are responsible for setting up the vision of the company and implementing policies, processes, and systems to imbibe and reinforce the culture. E.g. The CEO’s vision is to ensure transparency, complete visibility, and eliminate any chances of bias or assumptions in decision making.
CEOs must play a significant role in establishing the importance of data and how to leverage data to make informed decisions at all levels from top management to the junior-most employee of the organization.
CEOs should become advocates for ERP Software implementation to streamline processes to gather real-time data in digital formats, across all business functions, and provide a single source of accurate data to the entire organization and make sure it is accessible, any time, from anywhere.
CEOs must emphasize on gathering accurate data and making relevant data available to the concerned people. They must underline the importance of training users to continuously monitor and analyze data to make informed decisions. Only then the respective teams will be able to leverage ERP data to arrive at informed decisions.
CEOs should Lead By Example, and ask employees to provide relevant ERP data backed by statistics for taking decisions. They must imbibe a culture, where, all employees and each department studies and analyzes past transactions and trends to take corrective actions, eliminate wastes, and improve efficiency.
CEOs must reward employees and departments who leverage ERP data to make informed decisions and achieve continuous improvement.
2. Define ERP success criteria
High-level objectives of an ERP implementation include reducing manual work, making the process transparent, getting real-time visibility, shorter cycle times, reduced costs.
CEOs should discuss with all the departments and end-users how to define specific objectives and measure the success of ERP. Each company will define the criteria based on their current situation.
Some examples of ERP Success Criteria are:
Department Level Success measures:
– Purchase Order Cycle Time Reduced by XX days
– Average Inventory Value Reduced by XX amount
Organization Level Success measures:
– Achieve X% Orders Delivered on Time
– Reduce Operating Cost by X%
– Reduce the number of errors by X%
3. Funds / Finances Allocation
Budget Allocation – CEOs should allocate sufficient & proper budget after considering all the probable financial aspects required to implement ERP to ensure ERP Success.
4. Develop the ERP Project team
CEO can work closely with every department to identify suitable end-users and stakeholders who should be part of the ERP implementation project team. They can clearly define individual roles & responsibilities, escalation mechanisms to address any issues & concerns, etc. This ensures everyone involved is accountable to ensure ERP Success.
5. Continued involvement in ERP Implementation
CEOs must closely monitor ERP progress. They must schedule meetings of all concerned departments at regular intervals to get firsthand knowledge of the ERP status. This will help discover any issues, disputes, concerns, among departments at an early stage. CEO will have sufficient time to intervene and resolve interdepartmental issues timely and progress with the ERP implementation smoothly.
6. Vision for the future
CEOs must have the vision to leverage IT, Data-Driven Culture and ERP Software to achieve continuous improvement. When CEOs orientation is clearly towards making the best use of IT, ERP the employees will be encouraged and motivated to embrace technology and align with the vision of the CEO & work towards achieving business objectives by leveraging ERP data, analytics for continuous improvement.
Some examples of how to leverage IT & ERP to achieve business objectives are:
– Achieve Cost Reduction with ERP
– Achieve Lean Inventory with ERP
– Implement Business Discipline with ERP
The Role of the CEO is critical in ensuring ERP Success. The passion & vision and driving force in motivating the entire organization and rallying the teams are critical in ensuring the success of ERP in the organization.