ERP Success Factors: The Importance of Engaged Executive Sponsorship

By Ocie Anderson, PMP, Director of Consulting Services at Navigator

There was a time when it was enough to say that a project had an executive sponsor. Every project was assigned a “sponsor” but some were sponsors in name only. If the sponsor on your ERP project approves the budget and then only appears for steering committee meetings, they are not a true sponsor. They are a stakeholder, one to whom you periodically report the status of the project, one from whom you get your funding, and one to whom you are accountable if the project succeeds or fails. A true sponsor is engaged in the project and accountable for its success.

An engaged sponsor will:
 
1. Set the tone and vision for project success
It is important for a sponsor to communicate why a project is important and to do so in a manner that arms the team with direction that they can use to make everyday decisions. A good sponsor will present a clear vision for the project.

“We will identify opportunities to improve our processes, eliminate waste, and become more efficient in our supply chain processes.”

“We will transform our business through major improvements in people, process, and technology that provide us with world-class capabilities and improve our process maturity.”

“We will move quickly from our legacy systems by implementing industry standard processes and tools while maintaining our competitive advantages in order to avoid a catastrophic legacy outage.”

Vision will arm the team that is trying to decide details such as how much scope to include in the project such as: new applications or modules, process change, customizations, and organizational transformation.

2. Develop realistic scope and expectations
If success is defined as the attainment of something desired, then it’s important to fully define what that “something” is, otherwise, you might attain something else! Sponsors are the ones that define those expectations with the help of stakeholders and the team. The same project can be viewed as both a success and a failure by two different stakeholders if the proper and consistent expectations of what the project will provide are not set.

Expectations are the business capabilities that stakeholders expect to have at the end of the project that they do not have currently. They must be analyzed for viability, confirmed as part of the project scope, and communicated to the team for implementation.

•    What processes will be in scope?
•    What new functionality is expected?
•    What other enabling technologies are needed?

The answers to these questions are vastly different on a transformation project than they are on a technical upgrade project and can make the difference in the approach taken by the team.

3. Communicate with and empower the team
An engaged sponsor will talk to everyone on the project team as frequently as possible. The sponsor will communicate the vision, and set boundaries for scope and expectations. The sponsor will also talk to the team about how they are doing and their perception of how the project is going.

•    What concerns do they have?
•    What is keeping them up at night?
•    What problems aren’t getting resolved?

Engaging with the team in this way is the best way to get a true pulse of how the project is proceeding. Status reports with greens, yellows, and reds provide a snapshot of what is happening in a point in time. They don’t tell the direction, momentum, or morale of a project. Percentage complete tells the quantity of work that has been done, but it rarely tells how much effort is remaining. What good is being 75% complete if the remaining 25% of the remaining tasks are significantly more complex or difficult? Metrics and processes such as Earned Value Management provide better metrics of project status, but communication with the team can provide intangibles such as project momentum and team morale.

It is also necessary to empower the team members to make critical decisions and to periodically reinforce that empowerment. The complexity of an ERP project requires hundreds of decisions to be made that change how the business will operate. A sponsor cannot make all of these decisions, they can only provide the scope and direction. Making these critical changes may be outside of the comfort zone of some team members. The team needs to hear from the sponsor that they are empowered to change how business is done and they are the right ones to make those changes.

4. Be accountable for the project and team success
An engaged sponsor is accountable and is answerable for the project success, for achieving the projected savings, and for providing opportunity for the professional success of the team members. To achieve this the sponsor must communicate and know what the trajectory of a project is. It is also the responsibility of the sponsor to ensure performance is measured in order to document improvements.

Accountability to the professional success of the team members is also critical. An ERP project often takes people out of their full-time roles for the duration of the project. Their roles are often backfilled with new resources. These team members must be provided with an understanding of what is to come after the project is completed. At the end of an ERP project, these team members often know more about how the business operates than anyone else. How valuable a commodity is that? An engaged sponsor will provide these employees with opportunities to shine and take on new and rewarding challenges after the project.

Consultative Leadership
The focus of this article is on executive sponsorship from the perspective of the client, but other implementation partners have a significant role to play at the executive level as well. It’s important for consulting partners and solution executives to provide leadership and coaching to clients and ensure that the best approaches for implementing ERP are followed. A critical success factor is to follow the proven methodologies that implementation partners bring. This does not mean that you stifle innovation, but the risks of taking new approaches should be understood and taken into account. Just as it is important for client sponsors to drive direction in regards to scope and expectations, it is important for the executives of implementation partners to provide advice and consultation on the use of proven methodologies.

Having a sponsor for your ERP project is a good thing. It is paramount to the foundation of an implementation. An engaged sponsor is a difference maker. They are true leaders, driving from the top and being accountable to the total success of the project.