Executive buy-in is terminology that often gets tossed around when exploring and / or implementing an ERP project. Typically, the executive management will not be involved with the day to day implementation. In fact, there may be limited executive representation throughout the ERP selection process. Typically, the ERP selection team should primarily be comprised of the company power users from each department, and company leaders.
So, what role does the executive management team play? Executives have a duty to provide support, set the tone for the project and provide financial analysis.
Executives can provide support for an ERP project by being committed to the ERP software as a long term solution. This can be accomplished by providing vision for future growth. Future growth will often require additional functionality and flexibility. Defining goals and planning for them within the ERP software selected will give the organization clear direction and purpose. Having the executive team define company goals will create a deep sense of purpose within the entire organization.
As well as defining future goals and purpose for the organization, the executive team has the ability to prioritize the need to implement and embrace the new ERP software. When new software is implemented within an organization, it is typical for end users to talk about how they used to accomplish tasks and get the information that they needed. There is lots of comparing the new system to the old one, and even a little nostalgia for the old system. Moving from the familiar is not always comfortable. Executives almost must be cheerleaders for the new ERP, and encourage the entire organization to take part in training and utilizing the new capabilities quickly. The more quickly all team members and departments embrace the new ERP software, the sooner the benefits of the new system can be recognized.
Understanding the total cost of the new ERP system may not necessarily influence the entire organization, but it is imperative for executive management and team leaders to understand. While new ERP software and implementation are a recognizable hard cost to the organization, the increase in productivity, reporting, and flexibility cannot be overlooked. These types of indirect savings must be analyzed and assigned a value in order to obtain the true net cost of purchasing new ERP Software. Often, theses indirect costs are ignored in the ERP cost analysis, and actually provide huge financial benefits to the organization, that are recognized within operational costs.
The executive management team plays a role within the organization with regards to an ERP software purchase and implementation that cannot be assumed by anyone else in the organization. Executive support and leadership throughout the process provides support for the new ERP implementation that gives end users and management much needed direction and understanding of the company’s ultimate goals.
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