We regularly engage new clients for business process analyses because we’ve learned over the years that it’s the one sure way to create a realistic ‘roadmap’ to an ERP implementation. We’ve long told clients that the BPA will easily save its own cost – and usually much more – just in terms of eliminating miscues and ill-advised project turns. It sets the path for ERP.
But as a recent article by Panorama Consulting’s Eric Kimberling points out (and we concur), the business process reengineering that results from a BPA can create still greater savings for those companies willing to apply that reengineering to creating competitive differentiation.
When contemplating replacing your ERP system, you’re at the perfect point for reassessing all your key processes, and reengineering them for better performance. Following then are 5 steps recommended to gain the most from the journey…
First, understand the process in the context of ERP systems. Today’s systems are robust and flexible. Most processes will have multiple possible workflows – with corresponding workflow steps and criteria to be defined. So by starting with a clear understanding of how you want your processes to look, you can save a lot of time and expensive consulting costs later trying to do it after (or while) the software has been installed. Moral: set your vision straight first, and define your steps in English, or in terms most comfortable to all concerned, so you can create the shortest path in your software later.
Second, recognize that all business processes are not equal. Think about it: there are a lot of foundational tasks involved in an ERP system, many that can easily be handled by accepting your new software’s out-of-the-box method for handling them. These are the more basic tasks (think: accounts payable processing, for example) which will probably be just fine out of the box. So ‘go with the flow’ and use what the system offers here, saving your best efforts for the areas that provide the most competitive advantage.
Those competitive advantages may come from, say, how you handle your sales process. In that case, paying greater attention to the details of the CRM implementation might yield more bang for the buck when designing your sales workflow. Or it may be true of, say, your manufacturing processes. That might mean spending a lot more time with the folks in engineering designing the right BOM workflow, route steps and setups. The efforts put forth in these areas might be the truest path to an embedded competitive advantage inside your ERP system. So put your greatest effort into reengineering these higher level areas, instead of the basics.
Between “basic” stuff and “competitive advantages” lies what Panorama calls “industry differentiators.” Here you spend time reengineering to ensure that at least you have designed into your systems the appropriate industry workflows that will help you manage internal costs better. Procurement and overall supply chain management come to mind. Here, attention paid to ‘best practices’ will yield cost-cutting gains. But you’ll save your most diligent reengineering efforts for those true competitive differentiators that are unique to your own firm, as mentioned above.
Given space constraints here, we’ll share the last 3 tips (on cost savings, labor savings and measurement) in our next post. Stay tuned…