CFOs Should Know Their ERP - CFO Insight: "Organisations often believe that buying an enterprise resource planning (ERP) system in itself can solve business problems. That is a recipe for trouble. Strategic project management from the chief financial officer can minimise cost overruns."
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There is one certainty about ERP projects – they do not go according to plan. Given that ERP systems form the bedrock of corporate IT investments, one would think companies would have become smarter. But cost and time overruns continue to plague over half of all ERP projects.
An important reason is the lack of executive ownership. Once a high level decision is made on purchasing an ERP system, or upgrading an older one, the initial excitement dies down when the organisation realises that there is a lot of homework to be done in ensuring the success of the ERP project. Senior executives then tend to lob the ball into the CIO’s court. That is a mistake.
“Seldom is an IT–led project successful, it must be business-led to ensure the integrity of solution design. When an ERP project is solely managed by the IT team, it almost always leads to poor adoption and multiple phases of rework,” says Julian Mosquera of LCP Consulting. The most common mistake, he stresses, is that firms do not pay enough attention to the organisational change aspects of an ERP project. This can range from drastic changes such as staff reductions to more mundane ones such as new reporting structures, where the CFO can play a greater role than the CIO.
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