The decision to implement a new ERP system isn’t made in a vacuum; the ramifications of that decision will touch every part of the organization, nowhere more acutely than in the organization’s business processes. The extent to which an organization defines, manages and optimizes its business processes at the outset of an ERP implementation is one of the most critical determinants of that implementation’s ultimate success or failure. The same can be said of the ERP solution’s long-term efficacy. As the organization evolves in response to dynamic industry, regulatory, customer and internal business requirements, some of its processes must evolve as well, placing a premium on ERP flexibility.
Business process management sophistication varies from organization to organization, however. A lean, small or midsize company lacking the resources to systematically monitor and analyze its processes on an ongoing basis may be relying on manual, spreadsheet-driven processes that have remained in place for years despite changes in the business and technology landscape. That said, some of these processes may very well give the company a competitive edge, no matter how inefficient they may be.
Facing an imminent ERP implementation, what steps should an organization take to determine which business process it should reengineer, and to what extent?
STEP 1: Map your processes. Your ERP provider should be able to deliver process management expertise during the process discovery phase – the 1st step to implementation. The provider’s business consultants can lead workshops with representatives of each functional area – from accounting and purchase order management to manufacturing and shipping – to define and map your discrete processes and workflows.
STEP 2: Analyze your processes. Again, partnering with your ERP provider, gauge the maturity of each process, its current effectiveness at the operational level and its degree of alignment with your company’s business objectives. There is no sense in simply automating existing broken processes in your ERP system.
STEP 3: Identify opportunities for integration. Your ERP provider’s application experts should work with you to compare the ERP application’s out-of-the-box capabilities and workflows with your existing processes, across functional areas. The intent is to identify the processes that can be integrated with the native ERP application relatively easily, as well as those process integrations that would be more complex, perhaps requiring customization to the ERP solution. If, at this stage, you decide you decide not to adapt a particular process to the ERP solution it is important to understand the “Why Not”, objectively weighing the rationale of that decision.
STEP 4: Scrutinize your new ERP system’s flexibility. The ongoing value of your ERP system is a function of its native agility, given that some business processes are bound to change post-implementation. Ask your ERP provider about the adaptability of the solution’s underlying architecture: how process changes can be handled, either with various configurable options or through customization.
Beyond the fundamental operational value it delivers, a deeper understanding of your business processes has direct, bottom-line pay-offs when it comes to ERP: It accelerates your implementation time, lowers your implementation costs, reduces unnecessary customization and builds the foundation for maximizing the value of your ERP investment over the long-term.
