While on vacation recently, I visited an interesting restaurant with a large group of relatives. At the table a few clearly marked buttons were provided to request waiters to bring more water, clear used utensils, bring the bill, etc. I had never seen this back home in Vancouver. What a great idea to improve efficiency!
However, the servers didn’t really pay much attention to the system, so we had to keep flagging them down manually. This was difficult (and frustrating) because we were inside our own semi-private room. Why didn’t the system work? Because there was no top-down commitment or clear direction from upper management, so each server just did his or her own thing.
Implementing Enterprise Resource Planning (ERP) software is very similar. Without executive buy-in and leadership, the implementation will fail and you will not derive full value from the system. In fact, lack of top management support is one of the leading causes of application erosion.
I experienced this when I was an ERP user. When I was first hired as a junior (who was unfamiliar with ERP) I was never given the impression that it was mandatory to use the system. Instead it seemed more important to just get my job done, regardless of whether I used the system or not. If I could figure out how to use the system to add value to my efforts – that was a bonus but not mandatory.
As you can imagine, most people didn’t use the ERP system much. They weren’t lazy or obstinate; they were just very busy, and used to the old ways of doing things. Human nature is that no one really wants to take the extra effort to learn a new system, especially if they can’t see the big picture benefits of it. People’s inherent resistance to change automatically opts for the tried and tested. Why rock the boat?
A simple example serves to illustrate this principle. I realized we needed forecast figures from Sales to drive production. Without that production had to rely on guessing to determine production targets. However, I did not have the authority to tell the VP Sales myself that his staff needed to provide forecasts to Production in future. His department viewed this as an unnecessary burden. Only when senior management realized that better forecasts would lead to better customer service (and increased profits), were the Sales Department instructed to provide forecasts.
I have also seen it as an implementer for SYSPRO in Canada. I soon realized that one finds two kinds of users:
- Those who “get it” and want to use the system, but sadly find themselves swimming upstream because other users and departments don’t use the system due to a lack of top management leadership.
- Those who simply don’t “get it” and haven’t been directed to get on board by management. As there is no incentive or clear directive from management to use the new system. There is also no fear of repercussions from management if they chose to ignore it – just like the waiters in the restaurant.
I recall one implementation where top management not only bought in, but were completely committed to making it work. Here the CEO told middle management: “If any of your staff resist the new system, I want their names on my desk”. Guess what, people got on board and the company gained the full true value of the software.
ERP systems are not cheap and, strangely enough, they require that your employees actually use them in order to get full value from them! It is therefore critical for senior management to provide explicit buy-in and leadership. Without it, the investment in the system will be wasted.