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Show them the money

The general manager was not amused. We were at a banquet held by his CEO to reacquaint analysts with the major data communications equipment maker after a series of acquisitions had swelled the product list beyond recognition. The GM, though, was lamenting the ongoing enterprise resource planing (ERP) implementation of the booming company. Was Jerry […]

Written By

Larry Marion

Jul 1, 1998

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The general manager was not amused. We were at a banquet held by his CEO to reacquaint analysts with the major data communications equipment maker after a series of acquisitions had swelled the product list beyond recognition. The GM, though, was lamenting the ongoing enterprise resource planing (ERP) implementation of the booming company.

Was Jerry Maguire running an ERP implementation?
Photo: Photofest

“I’m spending $20 million on this thing, and I haven’t seen one single benefit,” he complained in between bites of salad. The GM runs a $2 billion manufacturing unit of the datacom gear vendor. The vendor is about midway through a three-year, $80 million implementation of R/3, the ERP suite from SAP AG. But the only tangible result of the implementation, as far as he was concerned, was the huge charges assessed to his unit. Meanwhile, the company’s public relations representatives sitting at the table were beginning to turn green, and their complexion had nothing to do with the quality of the food. Disclosing dissatisfaction over a big project to the press was not supposed to be on the menu.

The GM’s lament is not unusual. To make sure your top management doesn’t lose its appetite for an ERP implementation, add another task to the impossible agendas of ERP implementation team leaders. While the implementation team members of any ERP project usually are putting in 20-hour days and seven-day weeks for months to get the system up and running, they must step away every now and then and let top management know what they’re getting in return for this investment.

Demonstrating benefits

I’m not talking about the monthly newsletter, occasional video, and other corporate propaganda for the rank and file that should be part of the change management component of an ERP implementation. I’m talking about a quarterly presentation to management about benefits achieved or about to be achieved. And try to structure the implementation so that management sees some results in reasonable time frames.

Don’t yawn. Experienced applications development managers know that the best way to succeed when attempting a big project is to break it up into smaller pieces that become part of a list of realistically scheduled deliverables. It’s not uncommon to implement the financial modules first, then order-processing, then production-planning. Or roll out the implementation first in one small division as a learning experience before tackling the largest part of the company. Sometimes, though, ERP managers forget this basic concept of applications development.

It’s not enough to break up an ERP implementation schedule by geographies and functions. Doing the smaller divisions first, and then the larger ones, has become standard operating procedure. Nobody except the masochists tries the Big Bang approach.

Make sure that each deliverable has a clear financial impact, too. When planning the roll-out, give more than a little consideration to showing a financial return from each major milestone in the implementation schedule. Remember that your bosses will focus on incremental financial return, since they want to keep those bonus checks flowing.

Just as Jerry Maguire was fond of screaming, “Show me the money,” likewise, as long as you demonstrate a clear financial impact at each stage of the roll-out, you can show them the money. //

Larry Marion is the editor of PlugIn Datamation. He has been researching and writing about manufacturing technology for more than 20 years. He can be reached at lmarion@datamation.cahners.com.