Justify the Decision

Introduction

The decision to switch accounting or ERP systems has the potential to increase productivity and profitability, but only if the system selected fits within the context of the organization’s goals, objectives and strategies and the abilities of the people who will be using the system.

Functionality is but one-third of the formula for success. People have to be able to use the system effectively in order for it to achieve its maximum potential, and the rest of your business has to be organized for success.

Recognize the Need to Change

While all companies experience recurring episodes of less than satisfactory performance, under achievement on a continuing basis eventually leads to the decision that optimum performance can no longer be achieved. This isn’t a minor adjustment, but a fundamental change. Alternatively, the organization might seem to be operating fine, but losing ground in terms of what the competition is doing.

As you look at your organization and its performance, you have to look deep, and determine where you are, where you want to be, the most effective methods to get to where you want to be, and finally the cost/benefit relationship of each alternative. However, before you make the decision to scrap your current accounting or ERP system, ask yourself if it’s possible to modify it, and achieve the same results.

Accept the Limitations of Automation

While implementing a new accounting or ERP system may stimulate improved efficiency or effectiveness, it’s not the complete answer to improving profitability. The people operating the system, not the system itself, are your single most important asset. If they don’t understand how to work efficiently, are not motivated to serve internal and external customers effectively, if they are not given proper training and incentives and critically required respect, the system you are about to purchase will have little or no effect.

Assess Commitment to Change

Before any project of this magnitude can be undertaken people have to buy into it first, before they will be willing to support it, much less take an active role. If you are going to maximize the benefits of the product you are about to purchase, the success of the project will depend on a vast majority of users standing behind the selection process itself. If they don’t believe in the need to change; if they are not asked what they need individually; if they don’t feel as though they have any influence on the purchase decision; if they see that no changes will be made to their work environment, why should they do anything to support the system, much less help shoulder the increased workload as the system is being implemented?

Assess Your Ability to Change

Even though you may have recognized the need to change, and have identified specific areas of the business or business management system that need to be changed and to what degree, if you cannot manage effectively such a project, or your management and employees are not ready to change to the same degree you believe is required, the project’s basic foundation will be compromised.

While people may be willing to support this project and participate fully, they may not, and probably won’t, be able to understand fully exactly what they need to do. In addition, you may not understand how to manage this process effectively, not because you lack the basic knowledge or ability to learn, but because you have never been asked to organize such a large project. In the end it all comes back to skills. Do you have the skills necessary to organize and manage this project, and do your employees have the skills necessary to participate in the process to the degree required?

One of the most serious mistakes many companies make is launching a software selection process before they are truly ready. “Hey, we need new software. Let’s see what’s out there and make a decision by the end of next month.” I know this seems like a bit of an exaggeration, but the point isn’t. You may think you know what you want, and your employees may want to move away from their present system as fast as possible, but speed here can be dangerous.

Accept Reorganization as a Given

The selection of a new business management or ERP system is but the means to some other end. The investment in technology is only one of the foundations for success, but will have little or no effect on customer satisfaction or profitability if there are no corresponding changes in the skills of the people using this technology, or the supporting business processes that will surround and complement the new system. While your objective may not be the complete reorganization of your enterprise, some form of adjustments will have to be made to accommodate the new system. In fact, the problem may not be the system at all.

Before you begin to talk about software requirements, look inward at what makes you successful, or what prohibits you from achieving your financial objectives. If there are structural flaws in your organization, automation will not eliminate them. Look on your ERP system as no more than a fairly complex machine that will help you serve your customers more effectively. That’s all it is. Your organization will have to change to some extent, if only to accommodate the demands of the new system. Why not take the time and expand your analysis slightly. You don’t have to initiate a full-scale business reengineering project, but at least look at the processes that are connected to the accounting process. Change where change is warranted, but don’t change just because you have the opportunity. Change because it makes sense, and accept the fact that some change will be required.

Summary

It’s sometimes too easy for people to attribute to software attributes that are just not present, and never will be. While your decision to move to a new accounting system may be warranted, this post has served the purpose of challenging you to justify that decision, not to me, but in your own mind or in the minds of that critical mass of people in your organization whose support is required.

I want you to understand that accounting software or ERP software is not a magic wand. It will do very little other than track and manipulate information. Your success as a business is not dependent on whether you change systems or not, but on your ability to use that information in such a manner that it helps you manage your business more effectively. Before you begin, you had better spend whatever time is necessary making sure that

• you are automating for the right reason at the right time, that
• you and virtually every employee are committed to this process, that
• you have the ability to manage this process, that
• you have the ability to support the new system, and that
• you understand that the business itself will need to be changed to one degree or another.

Most important of all, make sure you know what you and each person in your organization needs to do well in order to help the organization become more successful.