Could a vCIO stop your ERP implementation from failing? Here’s what to know.

An ERP implementation can make your organization faster, smarter and more efficient — if it doesn’t become a six- to seven-figure failure instead. But could hiring a virtual CIO (vCIO) dramatically reduce that risk?

By delivering a unique blend of strategic leadership and frontline technical awareness, a vCIO can help you avoid common ERP implementation pitfalls and integrate your new ERP more successfully into your core operations, all without the cost of onboarding a full-time CIO.

Keep reading to learn more about how that works, plus how to decide if hiring a vCIO to lead your ERP implementation could make sense for your business.

Why do so many ERP implementations fail?

ERP implementations often fail because the process itself gets messy or grows beyond the boundaries of the original plan. Common risks that can derail an implementation effort include:

• Budget overruns: An unfocused process typically drives up costs, which can reduce ROI or risk running out of budget to complete the implementation.
• Timeline delays: If an implementation drags on, it can slow your team’s motivation to finish the process and adopt the new system, as well as create new costs.
• Scope creep: What starts out as a straightforward migration to a new system evolves into something bigger and less clearly defined (which equals slower and more expensive).
• User resistance: The best systems in the world can’t do much to help you if your team doesn’t use them or burns out halfway through the implementation process.
• Data migration challenges: Data is poorly mapped or labeled, leading to major issues with the quality of your ERP’s outputs and bad information flowing up to leadership.

Notice that none of these issues has much to do with the ERP platform itself. Instead, they all involve problems with how the platform is being implemented — problems that can be solved by experienced leadership.

How does a vCIO reduce the risk of an ERP implementation failure?

A vCIO (also called a fractional CIO or an outsourced CIO) is the rare executive who understands both the strategic and technical sides of an ERP implementation. This positions a vCIO to both tackle technical challenges and help ensure your new ERP actively aligns with your strategic growth goals by providing:

• Strategic focus: Before an implementation even begins, a vCIO assesses your strategic business goals and existing processes to determine if and how a new ERP can help support both.
• Selection and contract negotiation: A vCIO can help you choose the right ERP to fit your specific business needs, and lead the negotiation process with the ERP vendor.
• Avoid scope creep and cost overruns: A vCIO keeps the ERP implementation project more focused and organized, which helps avoid complexity, scope creep and budget overruns.
• Technical leadership: A vCIO helps ensure that your data is properly migrated to your new ERP, while also accounting for cybersecurity, governance and risk management.
• Downstream awareness: A vCIO understands the downstream impact of a new ERP on your other systems, like HR, purchasing, CRM, ecommerce or anything else essential to your business.
• Project-based support: As a fractional executive, you can hire a vCIO for only the length of your implementation project instead of committing to a full-time, long-term hire.

Should your business hire a vCIO or a full-time CIO?

When should your business hire a vCIO, and when does hiring a full-time CIO make more sense? Here’s what to consider:

1. What is your timeline?

If you just need 4-12 months of technology leadership to get through an ERP implementation (and the initial post-implementation period), a vCIO can jump in to provide that. If a new ERP is only the first step in a yearslong technology strategy, a full-time CIO might make more sense.

You can also consider both: Bringing in a vCIO now to deliver short-term leadership so you can take your time hiring the right long-term CIO.

2. What is your budget?

A vCIO is much less expensive than a full-time CIO. If you can’t afford a full-time CIO salary (which can run to the mid-six-figures), a vCIO can deliver many of the same benefits on a dramatically lower budget.

3. What is your primary strategic technology focus?

Consider your strategic technology goals. If your primary focus is just implementing a new ERP, a vCIO will likely provide all the support you need. If a new ERP is just one prong of a larger technology strategy, you may be better off hiring full-time.

4. How much flexibility do you need?

A CIO is a major organizational hire. A vCIO is much more flexible, able to scale up or down their support based on your current business needs.

How do you choose the right vCIO?

The right vCIO might add 10% to your ERP implementation costs, while boosting your overall project ROI and reducing failure risks. But how do you choose the right one?

1. Find an advisor

Find a technology consulting advisory firm to assess your technology needs. This firm should provide vCIO support: Ask that your potential vCIO conduct your assessment so you can get a sense of how they operate.

2. Choose a vCIO with in-role experience

Make sure your vCIO actually has experience working as a CIO. This will help ensure they have both the technical skills and the strategic vision necessary to lead a successful ERP implementation.

3. Align your ERP vendor and vCIO provider

In the best-case scenario, the same company serves as your ERP implementation vendor and provides your vCIO. This helps keep everything as aligned as possible.

Read more

• Can outsourcing solve top ERP implementation risks?
• ERP post-implementation: Avoiding a weak return on investment
• Should your financial institution hire an outsourced CIO?