C Executive collaboration in erp selection

December 13th, 2015 by Stephen Jones Leave a reply »

A Gartner survey last year , “Survey Analysis: Critical CFO Technology Needs: 2014 Gartner FEI Study,” June 23, 2014, http://bit. ly/1Ga5I50 highlighted the importance of C level Executive collaboration when selecting an erp system.

A critical component of any successful technology integration project is teamwork—especially among those with decision-making power and departmental oversight. In the case of ERP, the CIO and CFO should work hand-in-hand to determine which solution is best positioned to support the business and technology requirements of teams across the enterprise. They also need to jointly provide the highest value for the technology dollar—affordable to purchase and implement, economical to operate (low total cost of ownership), and capable of facilitating long-term financial stability and growth.

While an organization’s Chief Information Officer (CIO) and Chief Financial Officer (CFO) may have differing perspectives on a host of issues, common ground can must be found between them to select and implement an appropriate ERP solution. Because both CIO and CFO are driven by role-specific ambitions and targets, reaching a mutual decision can prove challenging. To mitigate against differing points of view leading to a project delay or cancellation, the following recommendations are hints for CFOs and CIOs on how to reach a common ERP selection and implementation strategy:

1. Determine how each ERP option supports overall organizational strategy. According to the 2014 Gartner Financial Executives International CFO Technology Study, out of a survey sample of 210 executives, the CFO authorized 29 percent of IT investments. This surpassed even the CEO for decision-making in this space. CFOs are clearly interested in ERP costs in both the near and long term. The issues around how well each solution supports the company’s comprehensive goals for current and future operations are just as critical,. Analysis requires input from, and partnership with, the CIO ad other C Executives.

The CIO has to worry about wider issues such as compatibility, support, upgrade path, security, connectivity, reporting features and the day to operational costs, such as a/c/ energy support contracts, IT training and so on. There is also a strategic role to play to keep abreast of, and to leverage new technology to better leverage the deployment and use of the erp functionality e.g. mobility, predictive analytics, IoT Executives should eb able to articulate clearly how each proposed solution /functionality /feature either does or does not supports strategic growth.

To crystallise thoughts identify a realistic solution ROI.
That will help to set a budget early and help in priosiritising requirements, and must have vs nice to have features. It also helps to understand what is a sensible level of investment to drive the system in top gear rather than in 1st gear.

As CFOs take a more hands-on approach to technology decision-making, they are strategically prioritizing their options, and placing ERP software high on their list of potentially transformative tools. In the Gartner study, 47 percent cited enterprise business applications in the top three most important technology investments, with 23 percent putting them at the very top of the list. Forty-two percent of CFOs cited these applications as their most important technology investment over the next three years. Similar results are seen in surveys of CPM software, and the bottom line results also show that leaders in bottom line performance measures are those with the right systems.

CIOs and CFOs should both be looking for the same thing—ERP software that delivers the highest possible return on investment (ROI) with minimum risk, maximum agility, and scaleablity. A system that not only helps to compete today but that can adapt and grow with the business. Determining the required ROI for the business as well as the likely ROI of competing solutions goes a long way toward clarifying the value of available options. Similarly, a budget helps to narrow the software choices to those most likely to drive and sustain long-term growth and profitability or to ensure that additional investment in more features enhance rather than undermines the strategy. Budgets are not tablets of stone -they are acceptable benchamarks- that does not mean they cannot be changed if you have good reason. The key is to how will you decide and ROI is a good test.

3. Consider a solution with built-in Business Intelligence (BI) capability: When executives in the Gartner study were asked to identify the business priority they believed most required technology support, 62 percent indicated “facilitating analysis and decision making.” To this end, executives are increasingly looking to BI tools to capture insights across the enterprise, and realizing that ERP solutions such as Microsoft Dynamics AX provide this critical capability as a built-in feature. For both the CIO and CFO then, it will be paramount both to understand which software options include this functionality (and how deep that functionality goes) and to require vertically-focused expertise from potential vendor partners to determine which tool best supports the organization’s use case.

4. Schedule your ERP rollout to maximize the functionality that will provide the foundation to grow and to control costs: Given the potential disruption as major systems are implemented and adopted, CIOs and CFOs should bring together relevant information from their respective areas of expertise and influence to carefully plan a timeline for project planning, implementation, and support that protects against financial risks, system downtime, and process changeover lag. Gartner suggests a “pace-layered strategy” to minimize these types of integration risks, reduce costs, and maximize security. Under such an approach, companies can categorize each business application (including ERP) as a system of record, differentiation, or innovation, then apply differentiated management processes for each, driving more thoughtful, collaborative, and high-value integrations.

The Value of Executive Partnership in Driving Technology Investment

It comes as no surprise that a successful ERP deployment hinges on partnership—and that synergy among department leaders is essential to securing the executive approval, team unity, and partner relationships required to implement a successful and even transformative long-term software solution. By working together to identify common goals and arbitrate diverging viewpoints, CIOs and CFOs can ensure the final selected system is one that not only meets their individual needs, but is also optimally positioned to meet business requirements and operational objectives enterprise-wide, securing sustainable growth and profitability.

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