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What is project governance and how does executive oversight shape ERP projects?

What is project governance and how does executive oversight shape ERP projects?

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This article explores project governance and the role your Board and executive team can play in guiding an ERP implementation.

Running a complex, mid-sized business in this day and age is difficult without integrated, digital business systems. The question business leaders now face is not so much whether they need an Enterprise Resource Planning (ERP) solution, but which one and when will they implement it?

Savvy business leaders know digital transformation is inevitable to remain competitive in a world driven by technology. It is often Board Directors, business owners and senior executives that initiate an investment in new approaches and modern business management solutions.

But overcoming choice paralysis and committing to becoming a digital business is only the first step towards achieving gains in performance and revenue. It takes expertise, time and energy to implement and embed new systems into your organisation in ways that will be sustainable.

So, what is the role of senior leaders in the governance of ERP solution implementation projects to ensure their long-term success?

ERP solution projects are strategic and will require strategic guidance

Transforming business-wide systems, and the processes that sit behind them, has long-term implications. It requires careful consideration and should be driven from the top, possibly guided by a strategic plan or digital business strategy.

While the work of completing tasks, liaising with implementation partners, coordinating training and internal communication is best left with the project manager and internal champions/sponsors—without genuine and visible support from the very top, the adoption of enterprise software is more likely to fail.

As well as backing the project management team, in many cases board directors and executives will provide formal project governance.

Taking accountability for how implementing a new ERP solution will enable the vision and go-to-market strategies of your organisation clearly fall under the remit of senior leadership.

When the Governance Institute of Australia surveyed almost 500 governance leaders about risk in 2019, it revealed leaders were most concerned about regulatory and legislative change, reputation damage, increased competition, finding talented people, and cybercrime.

A poor ERP software implementation can cause havoc: hampering your ability to remain compliant, secure, productive and responsive to customer’s needs, which in turn reduces your competitiveness and tarnishes your brand.

What is project governance and what’s needed to do it well?

Project governance is the layer above project management. It should be limited to high-level input about performance, risk, and issues that influence the success of a project—not day-to-day milestones.

Clearly defined roles and lines of reporting are important aspects of good project governance, to ensure that decision-makers know the boundaries, understand their obligations, and get useful information but aren’t bogged down in detail.

Digital strategy consultant Dr Malcolm Thatcher believes governance lies at the heart of IT investment failures. He said steering committees often don’t make the best use of member’s time and expertise.

He said, “Ideally the committee should spend 90% of their time on the project risks and issues, determining how the committee can assist the project team and provide them with clear direction.”

Why do some project governance groups lose focus and become ineffective? “A lack of focus by project steering committees is often matched by a lack of organisational focus on digital investment benefits and outcomes,” Thatcher argues.

It raises a key point. You won’t realise the full benefits of a new ERP solution unless your senior leaders know and embrace the role technology will play in enhancing your business and empowering your team.

Introducing a modern ERP solution—whether you’re stepping up from basic software or replacing legacy systems—can improve internal processes, make data more useable, streamline workflows and reveal deeper insights. It provides a means to do these things: if your whole business adapts with those objectives in mind.

Do you need help planning for a digital transformation? Leverage Technologies is a leading ERP solutions consultancy with hundreds of successful implementations to our name. Start a conversation today.

ERP Champion for implementation project

Why your internal “ERP champion” matters more than you realise

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We reveal why the leadership of your ERP solution implementation internally can ‘make or break’ your project’s success.

Well-regarded ERP industry analysts Mint Jutras recently surveyed more than 300 manufacturers and distributors from midsized to large companies about their ERP implementations. The report revealed high rates of failure are a myth but many are leaving potential benefits and ROI unrealised.

What was the most important factor that contributed to ERP implementation success? It wasn’t the software choice. It was the support and commitment of senior leaders (62%) and effective change management within the organisation (48%).

On the flip side, poor quality testing and inadequate business process re-engineering were the top reasons cited for lack of success.

These results do not indicate that the ERP solution you use is inconsequential. Technology is a tool, and selecting the right software is critical. But it’s only half the solution and it’s not usually the limiting factor when it comes to benefitting from greater visibility, automation, and analytics.   

People and processes involved in the implementation are more likely to hold you back and can be hard to coordinate effectively. People and processes ensure that your new solution is implemented, configured and adopted by your team through a process of implementation and change management.

To make that happen your business must dedicate internal resources and managerial support to the ERP implementation and change management process.

 

What kind of internal resources are needed to implement an ERP solution?

A reliable and experienced ERP implementation partner, like Leverage Technologies, is there to guide you through every step of your implementation.

However, high levels of internal commitment and organisation make it easier for your partner to assist you, and the less likely your project is to veer off-track.

The factors a business should focus on to support a successful ERP implementation include:

  • Well-documented processes and functional needs.
  • Accurate data and data conversion requirements for the new system.
  • People with the skills and availability to support each stage of the process.
  • Sufficient time allowed for each stage of the implementation to be finalised.
  • High-level sponsorship and accountability from C-level executives.

When we sit down with a business to begin the implementation process and they can show us clear process diagrams, we can tell they’ve thought about how their new ERP can be applied to deliver improvements. We can build on those ideas based on our expert understanding of the ERP solution—it’s a true partnership approach.

Of course, it’s not possible to introduce a new system that will be used and relied on by your team, without the input of your team. Your team’s involvement is required to:

  • Participate in workshops and brainstorms to clarify what’s important to the business.
  • Articulate tasks and workflows for each functional area so your provider can automate them.
  • Reconcile and clean-up data from multiple sources to ensure it’s ready for the new ERP solution.
  • Conduct other data collection activities like an accurate stock take or update the asset register prior to go-live, ensuring accurate data for the new ERP solution.
  • Identify and act as ‘super users’ that can be involved in training and supporting others.
  • Test specific functionalities by generating reports and other documents as part of user acceptance testing.

As well as people who are ready and willing to engage in each of those activities, it’s important to create a project management position or team that provides overarching direction within the business.

[FEATURE ARTICLE – 8 Reasons you need internal ‘muscle’ to implement an ERP solution]

 

When and how to appoint an ERP implementation project manager

A strong and savvy internal project manager will make a big difference in your ability to implement your new ERP solution on time and within budget. They set realistic expectations, manage project tasks, and provide an interface to the business for your ERP implementation partner.

Decide early about the allocation of resources to project management. A full or part-time resource sitting within your team to manage the project affects the costs, timing, and methodology of the implementation. Ask your reseller how the appointment of an internal project manager can expedite the implementation process and lead to better outcomes.

Because executive buy-in is so critical, it makes sense for a senior leader to champion the project, and choose and supervise a suitable project manager.

Your implementation partner can’t be privy to all the internal activities, time pressures, and machinations that may negatively influence the progress of your implementation project. Your project manager should be. They should have the skill and standing required to get answers, resolve issues, and generally keep the project on an even keel.

You might appoint a person/people specifically to run the project for a set length of time. Or you could choose existing team members to step out of—or expand—their day-to-day roles. The appointment of a full time or part time internal project manager will depend on the scale and complexity of the project and the timelines defined.

The skill set required of your internal project manager will vary somewhat based on the complexity of the project. For smaller, less complex projects, the project manager will need to be very hands-on—with the technical skill set to assist with data uploads, user training and setting up super users. With larger, more complex projects, the internal project manager will need to be more focused on the task of project, timeline and resource management – a less hands-on role.

Looking for an experienced ERP provider that can help you prepare for a successful implementation? Talk to an expert Leverage Technologies consultant today.