How to Identify Stakeholders for an ERP Implementation

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Client Readiness, Implementation, Microsoft Dynamics 365

How to Identify Stakeholders for an ERP Implementation

One of the first and fundamental activities to tackle when beginning a software implementation, is the task of identifying the stakeholders that will exist on the project. Identifying the right stakeholders will contribute to the overall project success and ensure the solution delivered is both sustainable and scalable.

Caroline Mayou

February 16, 2022

Introduction

An ERP Implementation doesn’t just represent technical artifacts and antiquated processes being stuffed into a system. A modern ERP system demands organizational transformation that impacts the organizations holistically. With organization changes, it’s important to remember that companies are social tributes made up of stakeholders whose interests converge or diverge depending on their interests, KPIs and ultimately, their values. For this reason, stakeholders are core in guiding these massive changes across a business, determining benefits of the changes, and evaluating the change management needed to get others on board. A stakeholder is any person, group, or organization impacted by a project. This blog post can be summarized in one simple sentence- project stakeholders hold the keys to the businesses’ key requirements, core processes, desired benefits, and sought out KPIs. Thus, identifying the right stakeholders will ensure the success of your ERP implementation. At a high level, a stakeholder’s role starts with identifying current processes, to turn them into requirements for the ERP system. It then continues down the line of turning those requirements into concrete deliverables and then driving accountability in team members, including partners, vendors, developers, and team members.

Knowing that a thorough discovery process is critical to a successful implementation, we can immediately tie in the importance of a stakeholder. From the beginning of a stakeholder’s participation, they are setting the stage for the entire project- essentially laying down the groundwork for the rest of the implementation.

No matter which industry or sector your business belongs to, identifying stakeholders and selecting your core team is key to a successful ERP implementation. In this blog post, we’ll be discussing the roles of different stakeholders throughout an ERP project, their relative importance, and the steps you can take to select the right ones.

What is a Stakeholder & Why do They Matter?

A stakeholder is any person, group, or organization impacted by a project. For the purpose of this article, I mean impacted by a specific project- an ERP implementation. A stakeholder can be within the organization implementing the software, or outside of it. In fact, one may be surprised by the variety of stakeholders that exist. They may be an end user of the application, a client impacted by the application, a leader in the organization, or simply an investor in the business. There are plenty more examples of stakeholders, but remember this: A stakeholder is impacted by the ERP software implementation. Because they are directly or indirectly impacted, gathering their input will help the company understand what features the ERP software needs, what problems these features will address, and how they will be addressed. In other words, the same stakeholders that dictate the future of the software, will often be the ones measuring the impact and success of the application that’s been developed.

Another fundamental understanding to have around stakeholders is that they work as a group. A primary function of a stakeholder is evaluating the merits and downsides to each others’ ideas and assigning priority to the prospective feature list. As representatives of their department or functions’ interest, they understand specific needs that may or may not conflict with other stakeholders. For this reason, their collaboration in a group setting is essential to guiding the vendor through what compromises can exist, and what features are essential to the ERP system at hand. This type of collaboration doesn’t stop after the requirements gathering- instead it continues through feedback in the design and build phases of the implementation. It even exists throughout testing, as certain features are validated. Finally, it continues to play a role when the software is live and being optimized in its future.

Understanding the Stakeholder's Role in an ERP Implementation

Commonly, ERP projects involve both internal and external stakeholders. These individuals will play different roles in the finance department, the vendor organizations, the internal management team, the procurement team, and more. The most common phrase used to describe this group of individuals is “the business”. Below, I’ll outline several other common roles you will see designated as stakeholders on ERP projects.

Business Owner or CEO

The business owner is responsible for communicating reasons behind the transformation (value proposition) and how the implementation supports the overall mission and vision of the company. The CEO will often assume the role of project sponsor, especially in small or mid-size companies.

Internal Project Manager

The internal project manager guides the company through the ERP system selection and through the implementation process. The Project Manager will be responsible for assigning roles and responsibilities throughout the project, identifying specific tasks, and ensuring that the project progresses in a timely fashion.

Business Analysts

Business Analysts are considered subject matter experts in the functional area being converted (often referred to as “streams” or “swim lanes”). They are responsible for documenting functional requirements as well as process changes impacting their area of expertise. From a strategic perspective your business analyst team defines the requirements needed to maximize the value of the new system.

IT Team

Bringing members of your IT team in as project stakeholders is essential to ERP system evaluation, implementation, and post go-live support. Your IT team will bring a thorough understanding of your current systems to the table and will be able to dictate technical requirements for your new ERP system. For example, identifying which core integrations are vital to the ERP system, which third-party systems are necessary, and perhaps even the security and compliance requirements that should be included in the selection process.

Chief Financial Officer (CFO)

The CFO typically serves on the steering committee and serves as an escalation point and strategic partner. This role assumes that the project will have key finance leaders as part of the core team, as design decisions are not typically escalated to the steering committee.

Super Users

Super Users are designated users in each department who will receive early training on the system and slated to be subject matter experts once the solution is deployed and the project has exited the hyper care phase. The following areas are directly impacted by super user participation:

Design – Super users often sit in on requirements gathering sessions and provide insight on existing processes.
Change Management - Your super users should also be considered change agents and be part of the communications plan. Super users identify areas of change resistance that may not be apparent to the rest of the core team.
Testing – Super users are the designated testers from the organization. They can provide input to test case creation and are responsible for end user test execution.
End User Training – While super users typically do not deliver end user training, they support the training team and help end users apply the skills learned to their current role. They often serve as mentors for end users who need additional support beyond end user training

System Users & Managers

End users and especially managers are responsible for system compliance. They have the power to motivate staff towards training completion and system adoption. At the same time, managers that are not supportive often subconsciously sabotage the project. Examples are below:

How to Identify Stakeholders for an ERP Implementation

Identifying stakeholders for an ERP implementation is one of the first tasks of a project manager or business analyst and is done before the project begins. One may begin this task by first identifying the different categories of stakeholders they are looking to identify. For example, internal stakeholders (project sponsors) versus external stakeholders (end-users, third-party applications, integrators, etc). These groups could consist of clients, suppliers, creditors, compliance makers, etc. The number of project stakeholders is going to depends on several factors- but don’t be concerned with having too many. It’s because there can be so many stakeholders, that I suggest with initially identifying where they are divided and which group they belong to.

We now know that a stakeholder is any person, group or organization impacted by our ERP implementation. We also have an idea of what these different categories of stakeholders could entail. The next step may be understanding who the key stakeholders to a project are, and the specific knowledge or information they have that could impact the ERP project at hand. One method of eliciting this type of information, is through interviewing. Below is a standard set of questions that can help us understand the contribution a stakeholder could make:

Benefits of Involving Key Stakeholders in an ERP Project

As mentioned, the right stakeholders drive ERP project success. Below, I outline several benefits of involving stakeholders in the ERP Implementation:

Risks of Not Involving Key Stakeholders in an ERP Project

Not involving the right stakeholders and relevant subject matter experts can be detrimental to your ERP implementation. Below, I outline several risks of not involving stakeholders in your ERP implementation:

If core subject matter experts in the organization do not support the project or the implementation, it may fail to get off the ground
If users are unaware of certain aspects of change, core users could fall short on training, resulting in poor user adoption, data integrity issues, and potentially, system abandonment
Key requirements could be missed leading to implementing an ERP system that is not complete and does not meet the needs of the organization

Conclusion

Choosing the right project stakeholders hold the keys to a successful ERP implementation. Though identifying the right stakeholders in your organization can be an exuberant task, it is one worth the effort- and the return will show in at project go-live.