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Crestwood Associates

The Importance Of Executive Sponsorship For ERP/CRM Deployments

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What is Executive Sponsorship?

Executive Sponsorship is an individual or set of individuals with high level responsibility for the success of a project. They are responsible for making decisions relating to an organization’s direction, strategy, and financial commitments that cannot be determined by functional leads alone. For example, they would approve financial outlays for hardware, software and professional services, especially those relating to changing orders from the original project scope. Because projects require the time commitment of internal company resources, they would also approve the allocation of individuals to work on the project tasks. Finally, the executive sponsorship role is needed to make decisions about a company’s policies, procedures, and strategic directions. A myriad of business process decisions need to be made throughout the course of the project and it is the role of the executive sponsor to make the final call on how the company will be run.

Who should be the Executive Sponsor?

The executive sponsor needs to have the authority to make decisions relating to project expenditures, human resource commitments, and business processes. Only those individuals with this kind of authority will be able to take command of the project tasks and decisions that will be necessary throughout the project. Without executive sponsorship, the project managers may find themselves  in a situations where they have no control over the time commitment of the company’s project team members, cannot approve additional financial outlays necessary for change orders, or cannot get functional team members to come to agreement on what the company’s new business processes should be.

While the specifics of who should comprise the Executive Sponsorship role differ, depending on a company’s size, industry or organizational structure, the following types of individuals or groups may be likely candidates for the role:

  • Company owners/partners
  • Company CEO/President
  • Controller or Plant Manager
  • Committee of Department Managers

How an Executive Sponsor differs from the Project Manager

In the case where a company has assigned an individual to the Project Manager role, this does not preclude the establishment of an Executive Sponsorship team or role. The Project Manager’s role differs from that of an Executive Sponsor in that the project manager is responsible for the day-to-day operations of the project tasks.  He creates  a project plan and ensures that all project tasks are executed within the time and budget constraints of the project plan. He manages the relationships with the project’s vendors and coordinates the work of all project team members.  Because projects are often cross-functional and interdisciplinary, different individuals may have different opinions on the direction the project should take.  A good project manager knows when to escalate issues to the Executive sponsor rather than stall the project or take it in the wrong direction.

Executive Sponsorship Project Reporting

The Executive Sponsor should be involved in regular project reporting. While the Project Manager will have meetings on a daily and weekly basis to keep the project on track, the Executive Steering Committee should meet at regularly scheduled intervals to review all new and ongoing issues relating to their role, such as scope changes, policy decisions, and internal resource requirements.  The project manager will attend these meetings and bring issues to the attention of the Executive Sponsor team, who will make decisions that will subsequently be carried out by the Project Manager and team.  Monthly meetings are usually sufficient, but ad hoc meetings may be required for urgent issues.

Signs that you need Executive Sponsorship

If your company does not have an Executive Sponsor actively involved in the project, the following are tell-tale signs that you may need one:

  • Meetings are held to make business process decisions and no conclusions are drawn. When individuals in a project meeting disagree on business processes or project resource allocation, no one in the meeting has the authority to make the decision. The same issues are brought up at every meeting and never resolved.
  • There is no process in place for change order escalation. If there are gaps discovered between the software capabilities and the company’s business processes, there is no mechanism for requesting a software change or third party solution.
  • Attendance at project meetings drops and support for the project wanes. Because individuals feel that the proposed design does not meet their needs and see no mechanism for resolving those issues, they stop participating in the project.
  • Completion of project tasks falls behind. Project team members are assigned tasks but given no time to complete the tasks.
  • Project scope expands without an approval process and the project falls behind. Because there are no guidelines for resolving issues that expand the scope of a project, the scope changes on its own and the project falls behind or over budget.
  • New business processes look the same as old business processes, but with different software. Because no one has the authority to make business process decisions, the old methods are merely duplicated, with no attempt to improve them.

When to form an Executive Sponsorship Team

Ideally, the Executive Sponsor role is already in place before the start of a project.  After all, if there were no champion for the project, the project probably wouldn’t exist.  The individual or set of individuals who pushed for the project investment should be the same ones that continue in this role after the project commences. Unfortunately, the project sponsors often lessen their involvement once the project is approved. They delegate it to the Project Manager, whom they expect to hear from only periodically, with a report on the project’s status. What many companies fail to realize is the importance of the project sponsor after the project has been launched.

Implementing a new system is a complex and challenging undertaking that requires high level sponsorship throughout the project’s life to ensure its success.

Written by Lauren Malloy, Project Manager, at your Chicago Illinois Gold Certified Partner, Crestwood Associates.

Crestwood Associates is an Illinois Microsoft Dynamics GP Provider

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