Stating to the board we are doing ERP risks preliminary with the nebulous and descending into the ineffectual.
Traditionally, ERP was about cost reduction, operating efficiency, standardization and centralization, without focusing on opportunities to grow. Today, however, the board’s focus is on digital business rather than cost savings.
Unless ERP strategies change to embrace and enable digital business, they and the CIOs that proposition them will be relegated to a back office, low relevance activity.
Presenting to the board can be a daunting task. Many a talented CIO has been tripped up by questions and statements from board members that appear to come from left field. When under pressure, it’s normal to resort to what’s comfortable vendors, technologies and buzzwords.
The board wants to hear how an ERP strategy will deliver measurable business impact and provide a renovated core for digital business. This is where a postmodern ERP strategy comes in, addressing both existing investments and new ERP technologies, to deliver measurable business benefits. Presenting a back office, low relevance strategy that bemoans a historic lack of investment in IT portends a poor outcome.
The board cares principally about only one thing: shareholder value. You need to communicate an understanding of the business context and how the company will be competitive. For public sector organizations, the focus should be mission enhancement rather than competitive advantage.
There’s often a strange paradox in that boards expect CIOs to be business focused, strategic and succinct. Yet when presented with an ERP strategy in such terms, CIOs may shift the meeting point to vendors and technologies since that’s what the board’s accustomed to talking to CIOs about.
Executing an ERP strategy is an ongoing stream of decisions and changes to business processes. These can’t be resolved properly without strong executive management and board prop up.
Lack of executive leadership is one of the primary reasons ERP programs fail. Executives will appear to the board for support and guidance. Their support of the agreed strategy reinforces its importance throughout the organization.
It’s critical that you know who the digital influencers are on the board and throughout the organization. A successful presentation to the board isn’t just about completing a check-the-box exercise and gaining funding. It’s about getting support throughout the program.
Help the board understand that ERP should be treated as an ongoing strategy, not as an individual one-time project. The strategy will contain multiple programmers and projects delivering measurable business value over time.
Stating we’re doing ERP is problematic for several reasons. By itself, the term ERP no longer provides a level of understanding and/or clarity to an organization. Over the years, the name has been used all over to mean any type of back-end business system in any industry.
In addition, ERP isn’t a single thing, application or vendor. Value doesn’t derive from buying software and simply implementing it. The value comes from the adoption of new and/or improved ways of working. It also comes from the development of a strong core system of record that can be exposed to systems of differentiation and innovation.
Gartner believes that CIOs who take a business strategy first approach to ERP will deliver 60 percent enlarged business value over those who take a vendor first approach. Success and the realization of business value require strategy, organizational change leadership and of use governance. Technology by itself isn’t enough.
Board members may have past experience with a variety of projects and programmers that were categorized as ERP. These experiences, good and bad, may color their view of this current initiative.
It’s essential that your staging clearly identifies what information you want the board to understand and what outcome you need from it. Do you require the board’s support? Do you require funding? Executive sponsorship? Or is this presentation just to provide background in turn for future discussions?
Clearly, state what’s episode in business terms that requires action at this point in time. Traditional ERP presentations often focus on risk, rather than reward.
One overused approach in monolithic ERP initiatives employed the concept of a burning platform a sense of urgency around a dire situation, with the goal of scaring the board into exploiting by linking the ERP initiative to a veiled threat: If we don’t do this, bad things will happen.