Even if benefits of ERP seem overwhelming and obvious compared to a legacy system, selling large-scale change is never an easy task. Part of the challenge of selling to management is their primary focus on the bottom line. At this level, money talks, which means getting management enthusiastically on board with ERP, means providing firm numbers and crafting a compelling financial argument.
These are the 5 key features at the heart of a compelling ERP pitch:
True Cost Projections
No one intends to sugar coat numbers, but the complexity of ERP can sometimes lead to overly generous or deleterious estimates. The project point person needs to truly understand ERP costs and pass that knowledge along to the decision makers. This often means working with a vendor to understand software, hosting and hardware costs along with service costs like customization. When it comes to estimates, it also important to determine maintenance estimates for 5+ years because no one likes expense surprises.
Accurate ROI Projections
The costs of existing processes and systems must be understood to accurately calculate ROI. Consider and measure the costs, as much as possible, of time consuming work arounds, duplication of efforts and other time wasters within the current process and system. From there, show how ERP will increase efficiency and lower costs over the long term.
Be sure and also highlight more difficult-to-measure objectives such as better customer service and more time for sales and other company-wide initiatives. And finally, look to educate management on the highlights of optimizing ROI during ERP purchase and implementation.
Well Defined Objectives and Metrics
In a nod to the points above, objectives must be set and then clearly measured to truly understand the value of the ERP system once its up and running. Let management know the details of the ongoing cycle of measuring objectives and results. This comes down to defining key performance indicators (KPIs) for different departments such as sales margins, lost accounts and new accounts, overdue or past due receivables, inventory turnover, return volume and delivery errors, just to name a few. Assign dollar amounts to KPI objectives and the ROI estimate will be much easier to craft and more convincing than general estimates.
Streamlined Process Blueprints
While the numbers will undoubtedly talk louder than chat about smooth day-to-day processes, visuals showing how streamlining lends itself to lean, turn-key operations is a solid selling point. This means crafting a blueprint or Business Process Model for each department illustrating process both before and after ERP implementation. Detailing the work flow of each department and determining how they work together, goes way beyond the sales pitch. A detailed BPM will not only sell management, but will also guarantee that the enterprise application will fit the different functions within a business.
Change Management Strategy
Company culture is a key element in ERP success. After all, it is the people, not the software, who implement the changes. Help executives understand how the project management team plans to manage the Change Curve to reduce any resistance during initial launch stages and accelerate the movement toward acceptance and enthusiasm. Also highlight the training initiatives that will help motivate staff and keep the new project moving forward toward 100% adoption and ROI success.
Looking for an ERP partner to help with these and other essential ERP tasks? If you’re considering a vendor, or have more questions about cost projections, ROI calculations, Business Process Modelling or other imperative planning, give call Parallel Solutions a call at (440) 498-9920. We are a full service provider and our experienced staff can help assess all your needs from software to training and support.
Mary Jo O'Neill