How to Justify an ERP Upgrade to Management

Justifying an ERP upgrade is similar to other justifications. What’s in it for me? We all ask that question to justify a purchase and so do your vice presidents and board members. For some, the answers are quantifiable. For others, the answers are intangible or more qualitative. People make decisions both logically and emotionally. Your management are people (believe it or not) and they make decisions just like the rest of us.

You are going to ask your management to shell out more investment on an ERP upgrade. You need support from management at all levels, including the C-level players.

Get your facts together. What will the cost and investment require? What return should be expected? Be detailed in the analysis. Not just how much money but also when will you need to have it and when will the returns begin to appear? You will need this to convince some and you will have it ready for any who might ask.

Your Best Case

Get objective but non-financial analyses ready as well. Is there a need for reporting that you cannot meet with your current ERP? You have external requirements from a variety of government departments and requirements from your customers too.

Recommended reading: Our guide to selling your ERP project to senior management will help you achieve executive level buy-in for new software.

Changes over time can bring new needs that require a new ERP. Have you acquired any new businesses? Has your marketplace changed? Has your competition gotten better in some way?

Above are quantitative arguments that will appeal to the logical thinkers. But most big decisions and maybe all decisions are really made at an emotional level and you need some qualitative arguments.

You might want some new functionality in your ERP upgrade such as CRM, customer requirements management or PLM, product lifecycle management. You have shown success in the past without these so why do you think they will help in the future?

There is no one method that will always work. Understand the people. Develop support from throughout your organization. Work your social network in the background.

Maybe the user interface is old-fashioned. Your employees have asked for a modern system with a GUI interface like every other system they use. This could also be a sign that the programming behind your legacy system is old. Are you having trouble finding technicians and developers to keep the legacy ERP running?

One good reason to change now is because you have a champion now. Someone already employed at your business has the skills and desire to lead the conversion project and needs an important project to continue their development. This kind of person doesn’t grow on a tree so when you have one, you should do what is needed to keep them.

There is no one method that will always work. Understand the people. Develop support from throughout your organization. Work your social network in the background. Make your best case for your new ERP system and keep making it until you win. Good luck!

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Tom Miller

About the author…

Tom completed implementations of Epicor, SAP, QAD, and Micro MRP. He works as a logistics and supply chain manager and he always looks for processes to improve. He lives near San Francisco Bay in California and can be found on the water in his kayak or on the road riding his motorcycle. Contact Tom at customerteam@erpfocus.com.

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Tom Miller