Understanding C-level motivations for ERP
Having walked a professional tech path that lead from Consultant, to Enterprise IT Director, to Enterprise Technologies VP, and ultimately CIO; I have been involved in many large-scale product pitch-to-decision processes that relate to the title of this article.
While each step on the ladder required a different business perspective depending on where I stood on the organizational tree, when it came down to final ERP purchase decisions the process always boiled down to the same set of discussions; “does the new system offer substantive ROI over time; can a positive assertion be proven empirically; and is enterprise management able to establish enough budget confidence that a purchase request will allow even the most frugal executive to pull the trigger?”
Money makes the world go round
ERP systems offer a host of valuable operating advantages to nearly any scale of enterprise. On the other hand, the central challenge of getting a final purchase done will be based on overcoming ERP project’s intrinsic tendency to extend direct and indirect costs, that many C-level executives find threatening to an enterprise’s cost management stability over time.
Recommended reading: Our guide to selling your ERP project to senior management will help you achieve executive level buy-in for new software.
It should be accepted from the outset that any ERP purchase decision is likely to be perceived through a jaded eye amongst C-level executives. Therefore, when preparing to build a case for a new ERP system, cost and ROI will undoubtedly be the most important issue to deal with throughout the entire process.
CEO’s make decisions; motivation counts
At various times in my enterprise career, I have had to work around particularly difficult CFO’s by going directly to a CEO with a potential ERP purchase concept. While this approach is unconventional, not to mention somewhat dangerous from a business politics perspective, it is the most effective way to begin a dialogue that may end up in a large-scale ERP upgrade.
Good CEO’s appreciate candor and efficiency, so cutting to the chase will be paramount. For example, note that various department heads have stopped by with complaints regarding reporting inaccuracies, or the company’s stove-piped inventory management system which is cumbersome and causing headaches across the enterprise. These kinds of squawks go right to the business heart of most CEO’s since senior executives typically respond promptly to constraints that tend to threaten operations and potentially lead to negative impacts on the bottom line.
Good CEO’s appreciate candor and efficiency, so cutting to the chase will be paramount.
Once you deliver the bad news, follow up with a well thought out, and immediate solution such as; “I was researching ERP platforms last month and one of the more intrinsic operational values is an ability to manage enterprise reporting and inventory more effectively etc. etc.”
An the end of the day, the ultimate goal will be to positively motivate while allowing the executive to identify the ‘right answer’ with only a little direction from you. Again, there’s nothing inappropriate in this approach, but if you can deliver a particularly soft touch, you’ll avoid having to deal with a irritated CFO whose turf has just been crossed.
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