Retailer asked to approve £12 million ERP in 45 minutes
Harbor & Finch is a 240-store fashion retailer with £780 million turnover. It plans to replace its 14-year-old merchandising and finance systems with a £12 million ERP programme over 18 months. The board is asked to approve the investment at its next meeting; the business case is nine pages, largely written by the preferred vendor, and claims £4.2 million annual efficiency savings. No baseline has been agreed for the current cost of finance close, stock accuracy or supplier settlement. Only one option - the vendor's 'best-practice' package - is presented. The CIO is both programme sponsor and chair of the change board. The board pack includes no independent assurance and the item is allotted 45 minutes at the end of a five-hour agenda. The CFO says the decision cannot wait because the vendor's discount expires in three weeks.
1. What should the board do at the meeting, and which elements of the Evaluate activity are missing?
Read the worked answer
The board should not approve at this meeting. Evaluate requires the board to examine the business case, consider options, assess risk, and satisfy itself on capability and alignment with strategy. The missing elements are material: no baseline for current cost or performance, so the £4.2 million benefit is unverifiable; only one option, so there is no comparison of buy, build, retain or phased replacement; no independent assurance on vendor claims; no evidence of internal capability to deliver an 18-month ERP programme; and no explicit risk appetite for delivery failure. The vendor discount is a commercial pressure, not a governance reason to skip evaluation. The board should direct a short, time-boxed gate: require a baselined business case, at least two credible options, a delivery capability assessment, and independent review of the vendor's commitments. It can authorize limited pre-contract spend to protect the timetable without approving the full £12 million.
2. How should the board apply Direct if it decides to proceed conditionally?
Read the worked answer
If the board proceeds conditionally, Direct means assigning accountability and setting boundaries, not designing the solution. It should separate the roles of programme sponsor and change board chair; the CIO cannot be both the person accountable for delivery and the person assuring delivery. It should name a senior responsible owner with a written mandate, approve stage gates with stop/go criteria, set delegated financial authority and variation limits, and require a benefits register with baselines owned by finance. Contractual directions should include audit rights, acceptance criteria, exit and data-return provisions, and remedies for missed milestones. The board should also direct a data migration and business continuity plan, because ERP replacements fail most often at cutover and data quality. Each direction should have an owner, a date and evidence of completion. That converts a conditional approval into a controlled commitment rather than a blank cheque.
3. Design the Monitor package for the first 12 months, including at least four metrics and the escalation triggers.
Read the worked answer
Monitor should be proportionate and evidence-based. A monthly dashboard to the programme board and a quarterly report to the board should include: cost variance against the £12 million envelope; schedule milestones and critical-path slippage; benefits baseline and realized benefits by workstream; stock accuracy and finance close days as operational outcome measures; severity-weighted defect counts; user adoption and training completion; vendor performance against service levels. Escalation triggers should be agreed in advance - for example, cost variance above 10%, slippage above six weeks on a critical milestone, any critical defect in finance or stock, benefits tracking below 50% of plan at a gate, or two consecutive red vendor service levels. The board should also commission an independent gate review before go-live. Monitoring is not a monthly paper exercise; it is the board's ability to intervene before the programme becomes unrecoverable.