The Real Reason Executive Participation Creates IT Project Success

Since I started in the SAP and ERP arena in 1994, I have heard experts passionately declare that a key criteria for IT project success is executive participation. That mandate applies to any large scale project, whether through ERP, CRM, APO, SOA, BI, or other solutions.

Many implementation companies wrongly believe that executive participation is only important because the executive brings authority and visibility to the project. However, a more overlooked yet crucial reason is the senior executive role. Although the previously stated reasons are valid, the executive insight into the company’s future allows for strong client satisfaction and success.

Most mid- to large-scale IT projects last at least three months, but more often last six months to two years depending on the size, scale, and scope of the company and IT effort. Combine this with the senior executive role of setting direction and strategy, as well as mid- and long-term goals of the organization, and the executives’ insight will ensure success.

Extended executive involvement can improve C-level satisfaction with implementation or upgrade results. Without it, you may be headed for rough roads and difficult budget discussions.

A Few Illustrations of Executive Participation for Project Success

I have been on SAP projects where the executives asked some key questions about application readiness for future events. While they did not clearly note these questions as such, they pushed the project to consider those aspects.

On a very large client, the Senior VP of Operations asked what the requirements were for adding new companies if they decided to acquire another business in the future. A couple weeks later, the client project manager insisted that the company needed full documentation to support the required configuration settings for a new company code for financial postings only. About six months after the go-live event, they purchased another company where they left the operations intact but interfaced to SAP as the financial system of record.

At another company, the CEO frequently attended weekly project team lead meetings. In one of those discussions, they noted the company needed to source products from a different distribution facility, by customer, on an ad hoc basis, and for inconsistent, non-continuous periods of time. The company needed to do so even if the primary warehouse had stocks to service the customer.

The project team made special development efforts to integrate a customized solution, allowing for a customer or product (or combination thereof) to override the default customer distribution warehouse for a particular date range. About three months after going live, the company discovered why the CEO required this.

The business was consolidating and closing a few distribution facilities, and sourcing from different facilities allowed the company to withdraw inventory and business without significant transportation or carrying costs. It was transparent to the customer as well. The MRP portion of the system saw the reduced demand on the closing warehouses and therefore planned less replenishment stock until the distribution facilities were closed. By the same token, the additional demand on the consolidated warehouses was also detected and accounted for, minimizing disruption.

Without this future preparation built into the system at go-live, the company would have faced significant hardships and difficulties in addressing business needs. The failure to plan for future business needs in the initial go-live event has also given SAP some of the bad press about being “inflexible.” The reality is that if you plan ahead, the application will have very few process gaps.

Where Strong Executive Involvement Produced Amazing Results

The previous illustrations show how the future state of the business was designed into SAP solutions. The projects achieved success because of the longer-term insight the executive participation brought to the project. When an executive challenges and refocuses the project team’s attention on strategic sales and marketing goals, they also focus the project on the future strategic direction of the business.

One company would only approve a scope change request or newly defined custom development if it fit the strategic direction of the sales and marketing groups. This drove the team to add CO management reporting functionality; specialized marketing spend tracking by material, customer, and region of the globe; and a whole host of other customer-focused initiatives. The system captured marketing spend and return down to the individual line item on a customer order, and then posted the spend against the marketing budget.

As of the date of this article (during a down economy), that company is thriving in a particular market that was shrinking even before the economic downturn.

This project was different because senior executive participation was evident throughout the project. The project required a monthly round table of every C-level executive. The Senior VP of Finance (who answered directly to the CFO) was one of the two client-side project managers, and several VPs and senior directly attended the twice monthly steering committee meetings.

This entire project had the future strategic direction embedded throughout the SAP implementation. The team delivered more automation, efficiency, and key lagging/leading indicator business goal reporting than I had ever seen on any other project. This was also the most involved and most complex project I had ever seen– nearly 150 legacy systems were mothballed and close to 200 interfaces were still needed.

This multi-billion dollar, multi-national company delivered a level of operational efficiency, customer focus, and product innovation that I had never seen before and haven’t seen since. It completed the project on time, on budget, and with extensive scope.

Because of the level of executive participation and visibility, the implementation vendor only brought in their “A-list” consultants, and over a third of the vendor’s consultants on the project were senior-level independent contractors. The quality of consultants was reflected throughout the project and after the production environment went live. They achieved full cost-based, cost-reducing payback in less than two years.

The executive level of involvement and participation helped educate the senior leadership team to wider business issues and IT challenges. This in turn led to more acceptance and adoption of IT solutions for other business challenges. The company ultimately developed a significant IT – business competency center with numerous business representatives who directly participated with IT counterparts and the business staff funded from the various business budgets.

They understood the critical business nature of IT solutions and saw it as a strategic investment in their own areas of responsibility. They used these solutions to ensure their organizations and business units were adequately represented in future technology initiatives and future technology funding. This became a huge win-win for everyone involved.

Lessons Learned from Executive Participation on IT Projects

Executive participation in an IT project creates visibility within the company. Such participation demonstrates the importance of the IT project and provides a measure of authority to make some of the difficult decisions. But the most important reason of all, the one that I have never heard mentioned by other commentators or implementation vendors, is the strategic imprint that executive involvement creates.

By nature, the executive sets direction and strategy for the company. Senior leadership frequently surveys the marketplace and adjusts course for future goals and plans. Whether the IT project is ERP, CRM, SOA, BI, or process work, the executive provides strategic, future-state input.

This executive involvement also prompts implementation vendors to bring their best and brightest to the projects. The visibility of the consultants has a strong bearing on whether or not the implementation vendor continues on with the project, or whether there are any follow-on opportunities.

If you are a CIO, IT Director, or other IT decision maker, it’s time to make the case for stronger executive involvement. Executive participation ensures that their expectations are met and will enhance your career possibilities as well. Additionally, properly engaged senior leadership and executive participation puts the business first and turns the technology into a change enabler or change lever.