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How Leaders Can Ensure Their Software Investments Produce Returns

This post was written as part of the IBM for Midsize Business program, which provides midsize businesses with the tools, expertise and solutions they need to become engines of a smarter planet. I’ve been compensated to contribute to this program, but the opinions expressed in this post are my own and don’t necessarily represent IBM’s positions, strategies or opinions.

I just finished reading my friends at IBM’s new ERP guide called Integrated ERP Guide: Expert Answers to Your Most Frequently Asked Questions. The section that I believe is critically overlooked is on page, 11: “executive sponsor’s commitment.” In my experience, this is how software investments fail to produce their promised results.

It doesn’t matter what kind of software system you install, without leadership truly embracing the acquisition and use of the system, it will fail.

Massive software systems like ERP (even for small and medium sized businesses) can do wonders to help give you control, to give you insight, and to help you take your business to the next level. It’s the same thing with sales force automation; the software can definitely help you improve your business. But only if it is really adopted by the end users and key stakeholders.

The major mistake I’ve seen in implementations with small, medium, and large businesses, is that leadership isn’t engaged in the process of making sure that the software is utilized. They love the idea of the software itself. They’re enamored with the promise of how it’s going to remake their business. But they’re not deeply engaged enough with the execution of the software before, during, and after the installation to get the initiative all the way over the line. This is why they never get the full benefit of their software investments.

What Leaders Should Do?

So what should leaders do?

First, know that your involvement doesn’t end once you sign the contract acquiring the new software. Instead you have to provide a vision of what the execution needs to look like. You need to share that vision with everyone involved, especially the key stakeholders and peer users. You have to constantly reinforce your vision.

Second you need to set expectations about the software’s utilization and the accountabilities surrounding your initiatives. It isn’t enough just to purchase the software. You have to ensure that it generates the results that you were after when you acquire the software. This is where your key stakeholders can help. They need to share your vision and ensure that processes are put in place (lest everyone go back to sending each other emailed spreadsheets).

Finally, you need to put some key people in charge of the implementation and execution. The people you really want on projects like this are the people that are most passionate about the project. This doesn’t necessarily mean that you put people with the right title or the right position on your org chart in charge of implementation and execution. You want the fire-breathing, passionate end users, those who will spread the gospel and proselytize their peers.

If you are going to spend the money and leverage technology, ensuring you get the return you want requires the additional investment of your leadership.


Why do most software implementations fail to produce the promised returns?

What is leadership’s role in ensuring that their investments produce those results?

How should a leader ensure that key stakeholders execute?

Why do you want passionate end users on software implementation project teams?

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  • Ogy Nikolic

    Excellent post Anthony. You have to make sure your software projects are aligned with your main business initiatives. You also need to do proper research, cost benefit analysis, have a clear project plan, funding and be available if any major roadblocks are found along the way. Knowing your project team and their capabilities means a lot.

    • S. Anthony Iannarino

      Thanks for sharing your perspective, Ogy! You have deep experience here.

  • Chris van Loben Sels

    Great post, Anthony!

    There are a number of reasons why great leadership is critical.

    But the most important is that this is hard work that requires leadership perspective. There are a lot of hard problems and conflicting incentives. For example, the person representing the field will want the CRM customized to maximize simplicity and ease-of-use (“no one ever uses that, it will confuse everyone, take it out”). But, the person representing finance and ops will want to make sure that all business processes work the same way (“we have to have that in there, because that’s how the Federal BU works”). And the IT professional will want to minimize customizations to improve the cost of and agility of maintaining the system (“it is not worth $30,000 to make that change”). Without involved leadership, it is very easy for many of these decisions to go slightly awry, leading to a death by a thousand cuts for the end result.

    Cheers —


    • S. Anthony Iannarino

      It’s so true, Chris. The bigger and more complex, the more leadership is required. And the more consensus-building.