EU’s fundamental problem & the similarities against a Local vs a Global ERP Implementation

Being Greek but working abroad for the past 11 years, I am frequently asked by my foreign colleagues and friends to provide my view with regards to the Greek crises. Unfortunately the current circumstances cannot be explained in a few sentences so I usually try to provide a background and a non-biased view of the situation. As I have described the fundamentals of crisis to different people over and over again, I realised that the current crisis has many similarities with an ERP (Enterprise Resource Planning, eg: SAP, Oracle, Sage, Microsoft Dynamics, etc) implementation.

Typically a new CEO that joins a Global Business, decides on its strategy and operating model and then plans the actions the company needs to take to execute that strategy. Usually, one of the decisions the business needs to make is what should the business do with its IT departments and its ERP systems? Should it consolidate them to a centralised model or keep them federated? Each model has its pros and cons, but typically a conscious decision is made and the business moves forward and executes it. In a decentralised model, Business Units across the globe have the autonomy to design their own business processes and implement their own ERP solutions as they wish. In a centralised model however, central teams are formed and are responsible to implement and support the defined common processes. One of the key success criteria for such implementation is that the sponsor for such programme is the CEO of the company. His role is to constantly communicate the vision, make tough decisions, overcome resistance and make sure that the processes and systems are harmonised across. In a centralised model most of the decisions are made by central bodies and subject matter experts. The aim of such model is to achieve economies of scale, define common KPIs, harmonise data and processes, share best practices and optimise business functions. Usually the ERP system is deployed and implemented 80% global standard and 20% local, based on each country’s’ or local business requirements. Because parts of the local business units lose their autonomy naturally there is a lot of resistance to change. Change management therefore is key and the communication department role is to convey the CEO’s messages, constantly inform employees on the benefits as well as the progress of such program. Finally, the implementation is typically funded centrally (or profitable Business units pay a higher share of the implementation vs the less profitable ones).

Moving over to the European Union model and comparing it to an ERP implementation, it is clear that there were good intentions from the start, but the execution is vague, it has created many gaps that caused the situation that we are presently facing. Although there might be a secret agenda that European Countries should eventually merge further and slowly form the United States of Europe (Centralised Model) but this vision has not been communicated widely (I guess it’s too early). Currently each country (equivalent to a business unit) has its own culture, opinion, view and somewhat autonomy (equivalent to a Federated model). On the other hand though a centralised body has already been formed (European Parliament) and a European Union Prime Minister (equivalent to CEO of a Global Business) has been elected that try to introduce common laws and standards to each country. So far the European Central bodies have somewhat limited controls; each country has enough power to control its own agenda, it can also stop or veto on the decisions made. Each Country’s Prime Minister (equivalent to a CEO of a local business unit) puts his/her country’s agenda above everything, it serves the best interests of its people and its businesses. The media (equivalent to the Communication departments) instead of trying to become change agents, they become agents of dichotomy. As a consequence fiefdoms have been created based on old views, interests, power and money and not based on the common purpose.

In my view, there are many similarities between these two totally different topics, the people of European Union and its leaders have to decide whether a true centralised model is viable option or not. Each member should reform, make compromises and drive towards that vision. It means that more authority should be given to the European Central bodies and governments should slowly relinquish their powers and agree to reform based on European defined practices but at the same address each country needs (as mentioned 80% standard – 20% local or 70%-30%). The media should help, constantly educate and communicate to the people the vision and its benefits of such journey. The European Central bodies and its bank should take a more active role, fund activities, address regional needs (eg current immigration crisis in the Mediterranean) and not let countries pose their own agendas to each other (for instance in the US, California (one of the richest states in the US) does not pose rules directly to Mississippi (one of the poorest states in the US) and vice versa). If however the centralised/consolidated model is not the long term vision of the EU leaders or is a vision that no one wants to implement, then such decision needs to be communicated widely and either allow countries to leave or let the whole European Union break apart for local autonomy’s sake.

Like in any ERP implementation, change is hard and many leaders and European citizens are not prepared to change; Europe has embarked towards a selective, almost pain free “centralised model” but it is the role of each leader to put aside the egos and drive change towards a more actual unionised model that will require difficult choices along the journey and perhaps long time to implement, but at least the vision/strategy will be clear. If there is no vision and no change then people and countries, as we have seen so far, suffer. In the current context (with all these egos and interests), perhaps a Federated model might be the best option for the many and a Centralised one for the few. But for sure each country cannot have both ways (και την π?τα ολ?κληρη και τον σκ?λο χορτ?το).