Who should lead Enterprise Resource Planning implementation?

Any change within an organisation needs a champion, someone to plead its case and drive through its implementation. When it comes to an organisation-wide change, such as with Enterprise Resource Planning (ERP), who’s best placed to pick up the baton?

“Every business division, from materials management, production and finance, to HR, sales and marketing, needs to know exactly what action needs to be taken, where, and when,” says Oracle (http://www.oracle.com/global/uk/smb/business_solutions/erp.html) “You need a comprehensive ERP software solution that can act as an organisation-wide control centre. This ‘control centre’ will collect status information and progress reports from different divisions and make them available to other departments. Information is updated by the users in real-time and accessible at any time to anyone who needs it.”

That ERP will benefit a business is not in question. How to go about making the change is. Some argue that it makes sense if those with experience of implementing similar systems take the lead. “In many organisations it is the accounts and finance departments which are the biggest supporters of the ERP,” says PRlog. (http://www.prlog.org/10908904-competitive-advantage-of-highly-effective-erp-system.html)

“By using sales and operations planning process, they will be able to tie financial implications to the forecasts and determine where the organisation should be headed. This information can be used to insure you meet bank forecasts, growth forecasts and increase the value of the organisation.”

 

The result, argue many, is that the finance people can add a great deal to any company looking to implement organisation-wide ERP systems. “Finance and accounting people have an important role to play in the ERP implementation projects. In addition to implementing their own new processes, they have a role to play on the ERP executive committee, the project team and spin-off task forces.”

Financial performance management and its links with other company-wide efficiency and productivity packages is one of the hot topics being discussed across the internet right now, as monitored by the Business Technology Forum.

It seems the accounts teams are leading the way due to the relative immaturity of effective formal resource planning and scheduling processes versus the high degree of maturity on the finance and accounting side. “It is easier to implement the accounting applications than those for resource planning,” says PRlog. “This is because less time is typically required for process definition and also because the implementation path is more straightforward.”

 

Not all agree. Just because the finance team has introduced its planning packages doesn’t mean they are best placed for a company-wide approach. “There’s more to delivering ERP – and crucially delivering the desired results from ERP – than simply looking at the numbers,” says Anthony Tjan (http://www.huffingtonpost.com/anthony-tjan/the-fallacy-of-financial_b_774685.html). “Financial performance is a result, a byproduct, a consequence of something else. The financial ‘numbers’ ultimately represent the scorecard we care about, but they do not help us understand how to score.”

That’s where the broader company-wide applications kick in, and why many now are looking to expand the success of financial performance management to other disciplines. “Efficiencies gained through the accounting and resource allocation have literally saved companies trillions of dollars,” says Ken Pulverman on his blog.

(http://blogs.oracle.com/apps/2010/03/why_your_erp_system_isnt_ready_for_the_next_evolution_of_the_enterprise.html).

But it’s not just a case of implementing then sitting back. ERP needs to be consistently upgraded and updated and that’s why many think the role should sit outside of finance. Pulverman adds: “Most ERP systems are connected to a proprietary middleware solution that only effectively talks with a handful of other systems you might have acquired from the same vendor.

“The problem is that you built your business around your ERP core, and now there is such pressure to innovate your business processes to keep up that you need a whole new slew of modern apps and you need ERP data to be accessible from everywhere.

“Every time you change a sales territory or change a benefits provider your ERP system, literally the economic brain of your business, needs to know what’s going on. And this giant need to access and provide information to your ERP is only growing.”

Do you agree that successful implementation of an organisation-wide ERP programme is best driven by one department? Should ERP be driven by the IT teams, by the accountants, by customer service or should such a fundamental change to a company’s culture and modus operandi be driven by the main board?

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