Business Process Reengineering: Current vs. Future State

Business process reengineering and improvement is one of the most critical aspects of an ERP implementation. In fact, according to our2014 Business Process Management Report, organizations that effectively define and document business process improvements as part of their enterprise software initiatives are much more likely to complete their projects on-time and on-budget. Additionally, they are more likely to receive the business benefits that they expect from their ERP systems.

Despite the well-documented criticality of business process reengineering, too many project teams, ERP vendors and consultants tend to overlook this important detail. There are a number of reasons for this – whether intentional or because project team members don’t know any better:

Business process reengineering appears to cost more time and money – at least on paper.  During the conceptual phase of implementation project planning – where some things look good on paper but don’t translate to reality – project teams decide business process reengineering will take too long, cost too much money and expose the project to too much risk. After all, isn’t it reasonable to assume that if we start configuring software without spending time to change our business processes, that the implementation will go faster? On paper, yes. In reality, no. Failure to address or improve business processes too often results in additional complexities caused by inefficient operations that result in immensely slowing down the technical aspects of an implementation.

Less experienced ERP implementers defer to the ERP software to deliver business process improvements.We’ve all heard it repeatedly during ERP vendor sales cycles: don’t think too much about your current or future business processes until after you buy our software. This is often referred to as the “easy button,” which most of us know does not exist for ERP implementations. In reality, most ERP software is extremely robust and flexible, meaning that even the simplest business processes can be executed in numerous ways, resulting in millions of potential variations across any one organization. This complexity is overwhelming, will slow down your project and will ultimately cost you a great deal of money if your business processes aren’t well-defined prior to beginning the design and build phases of your implementation.

Too many organizations think that they will simply start with a clean slate and throw out their old business processes. We get it: your current business processes and systems are outdated, inefficient and ineffective – and you want nothing to do with those broken business processes going forward. However, too many organizations throw the baby out with the bath water by neglecting those things that have made them successful. In addition, employees won’t understand the future state business processes unless they are communicated and trained in a way that connects them to the current way of doing things – or those processes that they understand best.  Even the best-designed business processes will be ineffective if your employees can’t understand them in the context of how processes work today.

So what is an ERP implementation team to do? There are three ways to help ensure that your team is able to avoid the three common pitfalls outlined above:

1. Don’t forget to address both your current and future business processes. This will help you identify the gaps between your current and future state which is critical to ensuring your employees understand what is changing and how.
2. Begin defining business process improvements prior to your ERP implementation. It is never too early to begin defining and documenting potential process improvements. If you are able to make the improvements prior to evaluating ERP systems, it will make your evaluation process much more effective.
3. Use your reengineered business processes as the foundation for your organizational change management and training strategy. Once business process changes have been defined and documented they should serve as the premise for training, communication and other organizational change management activities.

By taking these steps to address the important business process aspect of your large-scale business transformation, you will be setting the stage for a successful ERP implementation.

SOURCE: Panorama Consulting