Operational leaders and COOs (Chief Operations Officers) in the manufacturing or distribution industries need an Enterprise Resource Planning (ERP) solution that offers the necessary intelligence but supports growing operational demands. Moreover, they must ensure that the organisation’s ERP system maintains an operational structure that drives profitability and enhances customer satisfaction. It is therefore crucial for a COO to be a stakeholder in the selection and implementation of an ERP system.
What is a stakeholder?
Stakeholders play a crucial role in any project, including an ERP project. They are directly or indirectly impacted by the implementation of ERP software. By gathering their valuable input, a deeper understanding of the necessary features and how they can address various problems can be gained. Ultimately, COOs have the power to shape the future of the software and will also be the ones measuring its impact and success once it has been implemented.
Challenges faced by COOs
Businesses are constantly evolving, with challenges at every turn. The fast-paced nature of manufacturing and distribution requires quick production and shipping, automated processes, ongoing supplier evaluations, and a keen eye on the competition. The COO oversees all operations and must possess strong technological capabilities to adapt to ever-changing circumstances. They also face challenges in optimising the supply chain, balancing factors like cost, reliability, on-time deliveries, tracking, and sourcing capabilities. It is an ongoing balancing act to maintain efficiency and cost-effectiveness while considering industry trends, cultural concerns, and sourcing preferences.
The benefits of ERP to COOs
The right ERP solution can support COOs when confronted with so many challenges. Below are just a few of the operational and strategic benefits:
- Achieving end-to-end visibility
- Gain a comprehensive understanding of all key aspects, such as capacity, sourcing/supplies, inventory service/support obligations, operations, status reporting and financials.
- Making agile decisions
- Empower leadership with defined intelligence to act on critical information swiftly and effectively, resulting in favourable profit and cost outcomes.
- Streamlining business process automation
- By eliminating manual processes and implementing standardised Key Performance Indicators (KPIs), financial success can be ensured and potential setbacks avoided.
COOs manage pretty much all day-to-day operations, so they need to ensure that everything runs smoothly.
Why is the COO a key stakeholder during ERP selection and implementation?
An ERP system generally falls under the IT department and the responsibility of technology lies with the CIO, but it is the COO’s role to ensure that the organisation adopts the new system and to identify individuals with the right skills to successfully implement and integrate it into operations.
Collaboration among C-suite executives is crucial when shaping the long-term vision and strategic direction of the company. While most ERP vendors offer a wide range of impressive features and functionality, what truly sets them apart is their ability to excel in areas such as data integration and consolidation (a key factor for successful M&A activities), flexibility in customisation (to meet unique product or user role requirements), and scalability, among others, which ultimately leave a lasting impact.
It is therefore important for all C-suite executives to involve at least one member of their department in the decision-making process, as well as any other departments that may be affected by the new system.
COOs are increasingly accountable for aligning business processes with the organisation’s long-term vision and strategic direction. Therefore, they need to be a stakeholder in the process. COOs should be actively involved in ensuring that the ERP system drives the vision of the new business model and enables collaborative, customer-oriented, and analytically capable operational processes.
The COO’s role in ERP user adoption
Employees might initially resist change, especially if they are accustomed to working with legacy systems. However, it is crucial to communicate the numerous benefits of the ERP system, such as minimising manual tasks, enhancing data accuracy, streamlining workflows, and fostering better collaboration. By doing so, users will better understand the necessity of this change.
The experience of employees directly impacts a business’s success. Therefore, it is of utmost importance that the COO ensures effective communication of the ERP system’s advantages to the employees. Additionally, employees need to be encouraged to provide feedback on their workflows, pain points, and suggestions for improvement. This approach will help to maintain high user engagement and enthusiasm throughout the process.