Stating to the board “we’re doing ERP” risks starting with the nebulous and descending into the ineffectual.
Traditionally, ERP was about cost reduction, operating efficiency, standardisation and centralisation, 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 propose 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 primarily 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 organisations, 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 focus to vendors and technologies since that’s what the board’s accustomed to talking to CIOs about.
Garner support and guidance
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 support.
Lack of executive leadership is one of the primary reasons ERP programs fail. Executives will look to the board for support and guidance. Their support of the agreed strategy reinforces its importance throughout the organisation.
It’s critical that you know who the digital influencers are on the board and throughout the organisation. 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 programmes and projects delivering measurable business value over time.
Don’t focus on ‘doing ERP’
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 organisation. Over the years, the term has been used ubiquitously 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 per cent increased business value over those who take a vendor first approach. Success and the realisation of business value require strategy, organisational change leadership and effective governance. Technology by itself isn’t enough.
Board members may have past experience with a variety of projects and programmes that were categorised as ERP. These experiences, good and bad, may colour their view of this current initiative.
It’s essential that your presentation 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 information for future discussions?
Board meetings can be quite contentious affairs. Read the room quickly and adjust your pitch accordingly. Many CIOs don’t sit on the board and this ERP presentation may be only one item on a very busy agenda.
Present a vision of the future
Clearly state what’s happening 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 action by linking the ERP initiative to a veiled threat: “If we don’t do this, bad things will happen!”
Boards don’t scare easily. They’re often composed of seasoned business professionals who’ve “been there and done that”.They’ve heard many CIOs make prophecies of doom in the past that didn’t turn out to be true.
Present to the board a vision and narrative of the future that provides a positive view of the reasons behind the strategy, and an understanding of the objectives and benefits.