The high road

PUBLISHED : Monday, 31 July, 2006, 12:00am
UPDATED : Monday, 31 July, 2006, 12:00am

1. Leadership and commitment

Business leaders need to realise an ERP implementation is not an IT project but a business project. They cannot rely on the IT team to implement the project without management support. It is important that business leaders hold ownership of the project and pursue the implementation with a top-down approach. Leaders should sell and encourage the project internally. Only when the employees understand the significance of new IT systems will the project be successful.

2. Step out of the comfort zone

For many business leaders it is difficult to give up personal control and rely on the IT system to make business decisions. Most family business owners are used to having full control of the operations and making business decisions based on their market knowledge and vision. They are hesitant to introduce IT systems that promote greater transparency in business practices and might challenge their decisions. It is human nature for them to keep things under their control. But they need to put the company's interests above their own and force themselves to get out of the comfort zone.

3. Keep transformation down to a manageable scale

Business leaders should avoid aggressive transformation plans. An ERP implementation is successful only when it is able to tightly integrate applications across all business functions, such as procurement, sales, distribution and accounting. If the ERP project tries to transform all these business processes simultaneously it will become a platform of multiple fragmented applications.

4. Prepare for change management

There will be lots of changes in the company in business operation and culture, so business leaders need to be prepared for the changes and establish backup plans. At Tsit Wing Group, the ERP project revealed flaws in its business operations. Chief executive Peter Wong says the company should have introduced business process re-engineering (BPR) before implementing the new application. 'We were a bit too aggressive when we implemented the ERP system. We did not reconsider our business processes or put in any re-engineering procedures before implementing the new ERP. We are now stepping back to review our processes and plan to bring in BPR for our sales management and supply chain management.'

5. Staff training

Do not neglect users and staff training. Prepare your staff with all the training required to use the new applications. If they do not know how to use the system, there is no point in investing all the money and building an integrated ERP platform. Many senior employees may find the ERP implementation a radical change in the way they work. Business leaders should prepare them for the changes required to prevent the loss of experienced employees.