Achieving ERP Success- Critical Factors for success- Effective Executive Custody

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Critical Factors for ERP success- Effective Executive Custody

As I work through the Critical Factors causing failure and the Critical Factors for Success my next
topic is the first factor for success “Effective Executive Custody” with a weight of 25%
Effective Executive Custody
The most important factor for the success of an ERP implementation or, indeed any major strategic
investment in my experience, is Effective Executive Custody – lack of this is also the second most
critical factor causing failure.


Fundamentally any strategic investment and particularly an ERP project, touches every facet of the
organization and requires the entire organization to pull together to achieve a high value outcome.
The owner of this integrated view of the organization is the CEO / MD and I therefore submit for
your consideration that this person must be the owner of the ERP project! Note also that if the
team are not pulling together, the CEO is ultimately the only person with the authority to resolve
this.


In fact, in the light of over thirty years experience I have to say that if the CEO / MD is not prepared
to take ultimate responsibility for the ERP project and give high level guidance the organisation
needs to think very carefully about embarking on a full fledged ERP implementation. Even more so if
there is a Warehouse Management System and / or CRM involved.


I say this again against a definition of success which is a system implementation which results in the
organisation being more competitive, more profitable, more efficient — success at a tangible level
that is evident to the shareholders in a cash return on investment. Failure is, per definition, anything
that does not achieve these objectives. Failure is best determined via a private, off the record
interview with the Chief Executive – most C suite executives are very reluctant to admit failure in
public and on-the-record.


Let me share an example:
I met the client, the CEO and major shareholder of a medium sized importer and distributor of
fragrances and related products, at a Business School where I was delivering a lecture on IT
Governance. He liked what I had to say and invited me to conduct a Pulse Measurement of his failed
ERP + WMS project.


In three days I established that there was nothing wrong with either software suite and highlighted
the key issues with regard to why the project had failed and recommended the way forward. The
client invited me to lead the re-implementation project based on my findings.
In accepting the brief I stressed that Executive Custody on the part of the CEO was critical to a
successful outcome. His brief to me was to “create a strategic resource for the business”.

In response the CEO:
a. Attended every weekly project meeting, sitting alongside me as I chaired the meeting.
b. Attended every major workshop and provided continuous steer in the workshops and took
key decisions.
c. Actively guided the entire configuration in terms of validation data, right down to the level
of account credit note reason codes.
d. I dropped in on him every morning when I arrived on-site and we briefed with regard to the
plans for the day.
e. I dropped in on him every evening as I was leaving and briefed him on the progress for the
day and obtained guidance on his priorities for the next steps.
f. I copied him with every single project email and he skimmed these every evening after work
only replying where he had something to add. If I had something that needed his personal
attention I addressed the email specifically to him, else he was in Cc.
g. Participated in the war-game workshops.
h. Was entirely certain when the time was right to go-live.
The net effect was that the CEO was entirely conversant with the implementation and that when he
approved go-live he was entirely on-board with the state of the implementation. He saw the project
as a 20 year investment that warranted the time he invested.
The systems went live flawlessly and painlessly.

During the project I worked with the CEO and key staff to create highly structured Product Class
codes and other validation lists. Based on this highly structured data I specified several items of
mission critical business specific bespoke software add-ons that greatly enhanced the ease of
operation of the ERP and greatly increased the value delivered. This is an area that I specialise in.
A year later the CEO co-authored a conference paper and presentation on the outcome of the
project with me – the greatest accolade any client can give a consultant.
In addition, because the company could do things none of their competitors could do they secured
the Dior account, a 12% overnight revenue uplift.


From that point the organization has gone from strength to strength, has greatly extended its reach
and is highly profitable. They have moved to new premises with a much larger custom built
warehouse. I believe this success is at least partly attributable to the effectiveness of the ERP
implementation.
This project meets the above definition of success and that success was in large measure due to the
high level of engagement by the CEO. Note that in larger organizations more will be delegated to a
senior executive with deep strategic insight but the core direction should still be given by the CEO.

Conclusion
From consideration of the above it will be apparent that the real issue is not the ERP product, all the
mainstream products are capable of delivering a quality outcome, it is the quality of the
implementation and therefore the capabilities of the implementer that are critical.

1 Response
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