ROI of ERP – Part 2 of a 4 Part Series

Before Selecting a System

In the early 1980s “experts” on Japanese management were isolating distinctive practices that seemed to account for Japan’s remarkable economic success. The ‘Ringiseido’ decision-making practice was one of these. It offers an opportunity for equals to participate in the decisions that the executives will have to take. The purpose was to adhere to the Japanese cultural desire of harmony among people.

To maximize ROI, certain aspects of the practice of ‘ringiseido’ should be applied to the mission-critical steps required to be taken before the process of selecting an appropriate ERP system and supplier begins.

Clear decision-making authority: Who is going to make the final decision on each key issues? “Input welcomed, but the final decision on this issue is X’s.” Doing this quick exercise eliminates a raft of interpersonal problems. It is best done in open discussion with everyone who will be affected, and based on objective criteria.The criteria for the choice of the final decision-maker could be technical skill, experience, or a clear corporate responsibility. “If we go over budget the FD’s head will roll, so she needs to have the final say on costs.” The key is open conversation and agreement, ringiseido-style.
End user participation: In whatever form works in your context, ensure that the voices of end-users are heard. Really heard. The enthusiastic embrace of the new system will never be achieved without up-front participation. Many a good idea has been rejected only because the recipients of the final product had no input. People have a heightened level of commitment when they have been part of the selection process.
The business processes you require: In 1993 Hammer and Champy wrote the bestseller, “Reengineering the Corporation” after watching companies implement technologies to automate processes that were no longer required. Two decades later, companies still make the same mistake, in different but no less serious ways.

Before you move to selecting the appropriate ERP, use SYSPRO Process Modeling, to do an end-to-end mapping of your business processes and involve all stake holders – sponsors, as well as end-users. Do the full exercise; it would be valuable even if you were not thinking of implementing an ERP.