Do you have the “BEST” Executive Sponsor?
This article is a continuation of our ERP Pyramid series where we explore the building blocks critical to a successful implementation of an ERP. The first block of the pyramid was Business Needs. In Chapter 2 we now examine success factors of Executive Sponsorship.
Sponsorship (or rather, obtaining the right sponsorship) is probably the single most important building block to implementing an Enterprise Resource Planning (ERP) system. Unlike most single-technology, policy, standards or business process changes it will transform fundamentals on how the organization does business. Recent PMI? statistics cite poorly engaged sponsors as the cause of up to 33% of project failures.
Does your ERP have the right visibility and sponsorship in place to build your ERP from implementation through sustainment?
Executive Sponsorship
The second building block of the ERP Pyramid, sponsorship at the executive level, is often inadequate. Typically the sponsor of the ERP is a single executive such as a CFO or Senior VP in one line of business. The benefits perceived by the sponsor must be seen as opportunities for the entire organization. Only when all executives see an upside for them will they openly and privately support the ERP. Ultimately ERP projects are successful when fully supported and driven by the CEO and COO with executive support.
Understanding the Sponsorship Role
The role of the sponsor for an ERP is typical as with most projects or initiatives
- Remove roadblocks
- Champion the project across the organization
- Get resources and funding
- Address issues
- Active leadership
When it comes to building the ERP pyramid, the sponsor must also be in the executive leadership team. They have to sell the project in such a way to recruit more executive sponsors (at least in spirit) to support the enterprise initiative. The biggest single challenge for an ERP is to get all the executives to understand and truly prioritize this work across the entire organization. This requires a special set of skills from the sponsor to educate, influence and gain commitment from his/her peers for the ERP. Your best ERP sponsor is an effective communicator with strong leadership skills. They are in essence your primary Organizational Change Management leader.
Committed to the cause
Since the ERP will likely drive standardization of organization-wide master data, processes and business practices, real buy-in from all executive leaders is needed to successfully build and sustain the ERP.
When engaging executive leaders, the sponsor needs to recognize any number of reasons that will influence the level of commitment of leadership to support the ERP. These reasons could include any of the following:
- What’s in it for me – WIIFM – the basic question – how will they personally benefit?
- Control – they believe they will lose control of their division or function
- Lack of understanding on how the business will change and whether they are really affected
- Doesn’t affect them! – the belief that there is no problem in their area. Essentially leave us alone.
- Their teams do not support the ERP and therefore they will not either. They advocate for their teams instead of the organization.
It’s now up to the ERP sponsor and project team to actively engage those executives and devise strategies to get them on board. So how good is your project sponsor?
In Chapter 3, we next look at enterprise alignment for the ERP.
Allen Miko is Senior Partner at Chrysylys responsible for the delivery of process improvement projects and services.