ERP CIO, you vs the boardShrinking budgets are a mainstay of every CIO’s life. A slowly recovering economy and increased competition in a global market is no one’s idea of business utopia and so budgets for every department get scrutinized, reduced, and then scrutinized again. When it comes time to update or replace your company’s enterprise resource planning (ERP) software, the board is going to look to its CIO to justify the expense and the role of this often-hefty price tag. (In fact, ITworld.com touched on this point in an earlier article this month.) Dealing with the less tech savvy (such as your board of directors) can always be a pain, but as a CIO, your budget and the company’s ERP is on the line, so you need tactics to make the techless suits understand that ERP and other tech needs are the bones of the company.
ERP CIO’S AGAINST THE BOARD: DRAW COMPARISONS
A major problem with the divide between your board and you as a technology decision-maker is that return on investment (ROI) can’t yet be measured for all things. The expense of labor, material resources, and utilities are a unit-by-unit comparison divided into some given amount of output. The tools to evaluate the value of many aspects of an ERP (or other major tech purchase) are often lacking—or even yet t o be conceived. Even in evaluating the time it takes employees to complete ERP-related tasks is muddled by innovative ERP’s adding new abilities that employees didn’t have before as well as the time it takes to learn a new update or completely new system.
Given this problem, the question of expense for an ERP is radically different and every CIO needs to draw that comparison for his or her board. The question of purchasing, supporting, or upgrading an ERP isn’t like how many apples are needed for each pie, but whether you want to make apple pies at all. ERP technology is, for now, as irreplaceable as electricity or running water. The distinction is important both in emphasizing the absolutely essential nature of modern software but also for moving away from a unit-to-profit mode of thinking.
Next time, we’ll discuss another vital strategy for helping the business side of your firm feel the value of powerful technology.