ERP implementation projects are proven investments that help organizations reach their business objectives through operational transformation However, if you have participated in an ERP implementation, you know that many projects fail outright, and many others fail to deliver the promised business value. This is because complexities and risks materialize from all areas: competing business unit priorities, limited human and financial resources, change management challenges, data migration issues, suboptimal training, and adoption, and so on.
In many ways, the keys to a successful implementation lie in an organization’s ability to effectively handle complexities, manage risks, and troubleshoot issues. And, because the project is strategic in nature and because it demands significant resources, it needs active executive guidance and support. As a best practice, such guidance and support are provided by an executive ERP steering committee. The ERP steering committee is responsible for driving strategic goals, applying organizational resources, and making key project decisions.
The High-Performance ERP Steering Committee
A high-performance ERP steering committee should be staffed by appropriate decision-makers with the foresight, influence, and leadership abilities to guide a long-term, strategically important transformational project. Often, it requires participation from key C-Suite decision-makers, such as the CEO (or similar authority), CIO (Chief Information Officer), COO (Chief Operating Officer), CFO (Chief Financial Officer), and/or appropriately empowered EVP or VP-level stakeholders.
The ERP Project Manager is also an essential member of the steering committee. The ERP project manager is the steering committee’s window into project performance. This person reports project status, risks, and issues, and raises requests that require steering committee decision-making.
ERP Project Imperatives
Once the steering committee has been assembled, it needs to implement a strong framework to effectively discharge its mandate and deliver a successful and strategically aligned project. Here are key considerations.
- Create a Clear Purpose and Charter. To justify a project with the cost and risk profile of ERP, the steering committee needs to ensure that the project objectives are mapped to key business priorities. A steering committee should make sure that there is a project charter that defines the project’s objectives with those objectives broken down into tangible, measurable key performance indicators.
- Identify and Engage Key Stakeholder Groups. Multiple stakeholder groups will be impacted by the project, some more directly than others. It is essential to map the affected internal and external stakeholder groups, identify the impacts on each group, and plan stakeholder management strategies for each. For example, internal end-users will require extensive training on the new systems and processes. As another example, external customers may need advanced notice to update their systems to accommodate changed invoice formats.
- Invest in Change Management. The success of an ERP implementation requires end-users to adopt and become proficient in the new processes and systems. Any resistance to impedes adoption can delay benefits realization and compromise the prospects of business improvement. The steering committee needs to apply change management resources empowered to manage resistance to change, communications, training, and ongoing post-go-live support.
- Control the Project Scope. As ERP projects progress, it is common for a steering committee to be presented with change requests that the project’s scope, budget, and schedule. It is critical that steering committees establish a sound process to handle these requests with an assessment of criticality and project impact. Scope creep can become a slippery slope and is oft cited as a key cause of project scope creep, schedule slip, and cost overrun.
- Champion the Project. Every ERP project goes through ups-and-downs. As the project moves through these gyrations, the organization’s people experience what we have termed as the “Emotional Curve of ERP Projects” – a natural and predictable set of reactions at defined project stages. If people fall too far down the curve, they could resist the system and derail a successful outcome. It is therefore critical that the ERP steering committee continue to champion the project even during its predictable rough patches. It is just as critical that they push the organization’s directors and managers to do the same.
In summary, a strong steering committee ensures that the project is well chartered, tightly controlled, and supported by effective organizational change management.
What you can do now
Creating an effective steering committee requires an assessment of its membership and a definition of clear roles and responsibilities. As you refine your steering committee, ask these questions:
- Do we have the appropriate decision-makers on the committee who can champion the project, who represent the business, and who are empowered to allocate necessary resources?
- Does the project’s charter drive business strategy?
- Is the current project management approach practical? Does it require new people, tools, or industry-leading strategies?
By answering these questions, you will get a strong head start on building a strong and well-charted executive-level project steering committee. Learn more about the ERP steering committee, other layers of the team, and project governance in our, How to Build High-Performance Teams for your ERP Project.
If you have questions about your project’s governance structure, contact us.