You have a problem - your software just isn't cutting it anymore. You know it, everyone on your team knows it, but you just can't seem to convince your management team. There is an easy solution to this problem - find a new software solution, but without management and the ownership team onboard, it will be impossible to move forward. After all, they are the ones who will be signing the check. This means you need to figure out how to convince management that the business needs new software. Before we get into it, let’s look at why leaders sometimes resist change within their company.
Why Some Managers Resist Change
In order to convince managers that a change such as a new software solution is necessary, it’s important for you to understand the psychology behind why people resist change in the first place. Although sometimes concern can be rational and warranted, managers are human like the rest of us and can let their emotions lead them astray. Some of the reasons why managers resist change are:
- Past Failures
- Fear of the unknown (lack of knowledge)
- Time Commitment
- Loss of Control
Managers could have a fear of failure that stems from the past. They’ve been around long enough to remember proposed ideas that didn’t go as planned and they could be resistant, especially for large investments. Whether it was a situation they were involved in or heard about, managers could be projecting past failures within the company onto the current situation without realizing that the two are incomparable.
Fear of the Unknown
Like many people, managers have a fear of the unknown. The fear could simply be due to a lack of information. They fear what they don’t know and thus need to be educated on the software and its benefits to feel certain about it. When you propose the idea of new software, they could be afraid of the consequences of going with the wrong software vendor.
Anytime there is any change occurring within your company, it takes a lot of time and effort to plan, implement and manage the change. Data-driven managers will want a new software system that is better than the last and they will be willing to go through with the change despite the amount of work it will take, but only if they know for certain that it’s worth their time and effort.
Comfort With the Status Quo
Sometimes the reason leaders resist change is simply due to their current comfort levels. It’s important to remember that while you may see room for improvement, others may be content with the status quo.
How Can You Convince Management to Buy New Software?
Now that you know why your manager might resist change when you propose new software, it’s time to find out how you can ease their concerns and ultimately convince them to buy the new software you need. The steps to convincing management are as follows:
- Quantify Your Pain
- Qualify the Investment
- Compare the Investment
- Use Employee Buy-In
- Get Management Buy-In
1. Quantify Your Pain
Your manager already spends a lot of time looking at numbers for reporting and budgeting purposes. Therefore, they will require information on quantifying problems, cost savings and return on investment for any project —especially a large investment like new software. The best way to do this is to try to quantify the negative aspects of your current system wherever possible.
For example, it is one thing to say that a new system will "save you a lot of time". Instead, focus on how much time is wasted on current processes. Perhaps it takes you 3 hours each week to compile important reports. A software system that allows for automated creation and delivery of reports can then save over 150 hours of work a year, for you alone. What about the time spent dealing with inventory errors? Manually entering orders? The amount of money wasted on lost inventory? Try to come up with specific numbers for a variety of processes that software can help improve.
2. Communicate the ROI
An appropriate distribution ERP system may cost tens of thousands of dollars. However, the cost of not getting an appropriate software system can be much greater. What else costs tens of thousands of dollars? Labor.
In many cases, the right system can frequently save a business at least one, if not several salaries. This does not necessarily mean you need to fire existing employees, but rather those employees can focus on more important aspects of their jobs instead of manually entering data or fixing errors for example. As a result, the ROI of new software can be very positive for company turnover.
Consider a company with 2 order entry people who are falling behind due to manual lookups and processes. Say the company is considering hiring 2 additional employees. If each new employee costs $40,000 per year, that's $80,000 in annual recurring costs that could be saved by a software system which instead makes the existing employees far more productive. If in this example, the new software ends up costing $70,000, then it will be mostly paid for itself within a year considering how much you would save on salaries.
3. Compare the Investment
Similar to tip #2, you can make the software expenditure easier to digest by comparing it with any other business investment. In industrial sectors especially, business owners may see software as a necessary evil. Comparing software to a machine, equipment or vehicle purchase that is "for the admin/warehouse/accounting" staff should make the purchase seem more strategic. Always remember that the right system will scale with your company well into the future. An investment in the right system will continue to be beneficial for years to come.
4. Use Employee Buy-in
Chances are you are not the only one encountering issues with the current system. Like tip #1, quantify the pain of your colleagues as well. Your manager may find it easy to ignore a single employee but would likely be persuaded by the knowledge that most of the employees share the same pain. ERP software provides benefits for your entire team - from accounting to warehouse staff to salespeople and management. This makes the investment a lot more worthwhile.
5. Get Management Buy-in
Managers often involve employees in changing processes in order to lessen any pushback. People naturally feel more comfortable with change when they feel involved and have input in the direction of the change. The same tactic that managers use on employees can work the other way around as well. Your goal should be to get management to feel like they can lead the change and help them to personalize it. Discussing efficiency strategies with management will reduce push-back if they feel that the change is their idea. During this process, your boss may discover potential personal benefits from new software as well. Software that helps makes their job easier means that they can spend more time on the golf course!