Combination of factors worrying Australian CIOs – how can these concerns be overcome?
No matter how fast a business is growing, technology budgets in most of them remain pretty tight. Technology leaders in Australian businesses are facing increasing pressure to innovate for the lowest possible cost. Mostly this involves deciding how to allocate resources, and concerns arise around updating and customising long-standing core ERP systems.
CIOs and other senior management are also under pressure to move systems to the cloud, if they haven’t already done so. There’s a lot of content out there extolling the virtues of the cloud computing model, and many CEOs and board members want to be a part of it. The challenge for the CIOs is to understand these trends and balance them against finding the right ERP for their organisation.
At recent roundtable events in Brisbane, Sydney and Melbourne, CIOs got together to discuss the ERP landscape and their concerns around risk management. Calvary Christian College director of business development and ICT, Kym Ayling, says their organisation’s ERP has been static for many years, and although there are frequent complaints about it, there is a greater fear about transitioning to a new platform.
“This is okay until we reach a tipping point probably manufactured by leaders who don’t understand how difficult and costly the transition will be,” Kym says.
The key to overcoming these fears is to assess the risks – don’t ignore them. They exist and they need to be mitigated as much as possible. Upgrading an ERP system – or implementing a brand new one – is a huge undertaking. There are a lot of moving parts, and many factors to take into consideration. There are risks involved, and the better educated you are about those risks, the better prepared your business will be to mitigate them.
The reality is that most risks are manageable if they’re known about ahead of time. Ignoring them is a sure way to ensure the implementation will fail, so identifying what problems may crop up and addressing them early on means you’ll mitigate them before they turn into a point of failure for the implementation.
Most CIOs will be wary of any ERP provider who claims that that they can implement an ERP solution seamlessly without any disruption to the business, but it’s still worth bearing in mind. When on the hunt for a software partner, CIOs need to look for those for whom risk management is a key consideration from the outset. From the beginning of the project, a risk management plan should be designed and implemented so that not only is everyone aware of the risks involved, but plans are in place to mitigate them as much as possible.
At the same roundtable events mentioned above, the attendees agreed that innovation is being hampered by how long it takes to update and customise ERPs. “Innovation is being somewhat stifled but often we struggle to understand the true cost of change in terms of time and resources and thus we haven’t got a clear plan – we don’t understand the risks and don’t gain the outcomes desired,” according to Calvary Christian College’s Kym Ayling.
This is why it’s so important to select an ERP partner who does understand the true cost of change, can give clear indications of what resources will be needed, and who can provide an accurate projection of the timeline. The right partner will make sure everyone is aware of the disruption and risks involved from the very beginning. It’s no good getting the project underway only to have nasty surprises hampering each stage of the journey. The approach should be based on a comprehensive, combined effort with a business and its key stakeholders.
For more information on risk management around ERP implementation, download our eBook, The myth of seamless ERP implementation: four strategies for mitigating risk.