Feeds:
Posts
Comments

Posts Tagged ‘Business Process Analysis’

Our cohorts at Panorama Consulting often write good pieces about the importance of business process change management, especially when it relates to firms in growth mode who also happen to be implementing success strategies and software systems aimed at supporting that growth.

Recently they penned a piece on the topic of what you can learn from your business process management mistakes.  Because we also spend our days reviewing firms’ business processes, we thought their words worth sharing with our audience.  You’ll find their original piece here.

 

Just as researchers search furiously for the cause of disasters involving ships and planes, they suggest we too search for causes behind operational disruptions, which often cause morale problems among employees, inadequate software implementations and customizations, frustration all around, and low benefit realization.

To learn from our failures, the authors suggest we

  • Forgive – “Take a deep breath, forgive ourselves and others” to gain a clear head.
  • Analyze – Conduct a “lessons learned meeting to review project deliverables. Quantifying the direct and indirect costs in terms of time and money will give you an idea of the benefits you’ll need to realize to achieve a positive ROI on failure.”
  • Disseminate – Share lessons learned across the organization.

Panorama notes that “operational disruptions can be avoided by developing an effective business process management plan.”  They suggest including…

  • Business Process Mapping. We wholeheartedly concur, because any successful implementation always starts here.  At a high level, we map current processes and future-state processes, looking for technology touch points, redundancies (and ways to eliminate them), and how to do away with multiple and sometimes proprietary silos of information.  You reengineer your processes in order to optimize your workflows, both human and machine, to best capture the talents of your organization and the areas where you lend the most value to your customers.
  • Organization Change Management. Implementing new business solutions can often result in a decrease in productivity initially.  As the authors note: “Business process management cannot succeed without customized training and targeted employee communication, both of which should begin before software selection.”
  • Continuous Improvement. It’s a mentality.  And it will help ensure that you maintain optimized processes consistently into the future.  Set KPIs and other benchmarks which allow you to record progress and build toward improved performance.  Measure regularly.  If you can’t measure it, you can’t improve it.

Good advice all to anyone implementing process change, organizational change, or structural changes from software to process management.

 

Read Full Post »

Recently another ERP blogger we frequently reference, Eric Kimberling of Colorado, wrote about some of the lessons he’s learned from 12 years of guiding clients in their ERP pathways and decisions.

Given our thirty years of experience, we thought we’d take a few of Mr. Kimberling’s comments and splice them with our own to provide a few thoughts on some of the key lessons we’ve all learned about what he likes to call “digital transformations” or broadly speaking, ERP implementations and workflow improvement initiatives.  For the most part, the topic points are his, and the advice following is ours.

  1. Here we are in unanimous agreement: It’s more about the people and processes than it is about the technology.   Identifying key processes, establishing the right workflows, seeking to make users comfortable with change… and mapping all these efforts into a suitable software solution that removes redundant efforts, eliminates disparate information silos,  streamlines peoples’ jobs and ultimately serves your customers more efficiently – these people- and process- focused initiatives are the real key to digital transformations.
  2. There is no one-size-fits-all answer. There’s a lot of good software out there.  Just as there are a lot of good implementation consultants.  Unfortunately, there are also a lot who know the technology but not the business processes.  Why would you hire anyone that’s not a subject matter expert in your chosen field?  Ours expertise is manufacturing and distribution — so don’t hire us to install your dental practice management software (or fill your cavities) — and vice-versa.
  3. Your business should drive your software and transformation needs – and not the other way around. That also means that if your software cannot be matched to the way you work, then you need to find different software.  (Another reason for hiring implementation consultants that know your territory, i.e., business.)
  4. Take the hype and the jargon with a major grain of salt. Tech is notorious for having a million buzzwords.  Cloud, SaaS, big data, XML, agile… the list goes on forever.  Once again, what’s best for the business?  At the end of the day, where your system is located (local, cloud, etc.) is less important than whether the tool you choose is going to be the right one for the way you work, and be up and running over 99% of the time.  The buzz words and the tech, while sometimes important, always matter less than the interests and flow of your business.
  5. The best technology will not fix broken business processes. We always insist on making the business process analysis the first item on our agenda.  Identifying process flows, both the current ones and what they should look like in the end, is what creates the road map to everything that follows.  Involve all the key stakeholders and users in your project in this crucial step from the very beginning.  That will ensure you’re starting from the right foundation.
  6. Failures, like successes, don’t happen overnight. Usually, win or lose, there is a trail of decisions, events and actions – all driven by people­ – that determines the success or failure of most ERP projects.  These occur along a timeline.  So when you see something going off the rails (and we always tell our own consultants this), be the first to pull the cord and stop the train.  Run towards the fires (issues).  It will usually only get worse if you don’t stop, pivot, re-evaluate and take corrective action to fix the flaws in your foundation sooner, rather than later.

Both Kimberling and we could list more, but today’s list should provide any company about to embark on a digital transformation or process and software upgrade with the key lessons they’ll want to know – before they begin the effort.

 

Read Full Post »

Any “digital transformation,” as the consultants at Panorama Consulting like to call things like ERP implementations, can seem daunting, a thing best put off ‘until tomorrow’ when, apparently, it will be… easier?  A recent article by Panorama makes a few points however that are worth noting, and that may get you off the starting line to your own internal project efforts and transformation.  We’ll meld their comments and our experience into today’s post.

For starters they point out, think about your ERP effort at a grass roots level.  You can start simply enough by having a few of your own people map out their current business processes, while thinking about the potential improvements they might want to see in a future state.  We always start our clients’ ERP projects with just such an effort.  Clients are usually too busy to do it for themselves, or perhaps too close to the subject to properly critique it, or lacking in the higher level business analysis skills that can help shape the best outcomes.  But at the very least, you can get your team thinking about how you do things today, and how you could better do them tomorrow, with less overlap and redundancy, and better information sharing and collaboration.

As you gather and review your grass roots analysis results, begin thinking about your overarching project goals.  Instead of starting with no sense of direction, think about the long-term goals business goals that underlie your IT, ERP or digital transformation project.  Be sure everyone understands the same goals, and how each of their individual parts in the process will contribute in the end to a more profitable, focused and leaner company.  Be careful not to get too distracted by the technology, and keep your purpose business-focused: that’s how you’ll succeed with customers and grow your own business.

Defining your business processes and requirements is the logical outcome of the actions and discussion we just noted.  It’s getting your ducks in a row.  It can take some time and outside help may be required (to learn what works and what doesn’t, best practices, etc.).  When you are ready to commence your actual ERP initiative, you’ll be equipped with the necessary data, thinking and step-outlines necessary to give your project its full forward momentum.

If you do all the above, you’ll be well prepared for the final step of hiring your outside consultant or reseller or implementer.  The process will go quicker and more smoothly if you’ve already given serious consideration to your business goals, your processes and workflows, and to your newly imagined future state.  It will help you more quickly and accurately match up process needs with software flows (and vice-versa), and save you time and money getting to the point where you’re ready to actually install and implement.

If it all sounds easy, well then, just remember that all along, your employees still have their regular jobs to do!  Be realistic in your expectations, fair in your judgments and remain focused on the planned business outcomes.  If you orient your resources consistently toward giving your people the tools they need and staying focused on the project’s business goals, you’ll fall into the small but highly desirable category of those who actually succeeded in their ERP implementations.

Read Full Post »

invest techTechnology and ERP systems are too often presented as the panacea that will cure all your business ills.  But the fact is, technology without the right planning could actually end up hindering your efforts.  Recently, the folks at Panorama Consulting suggested four things a company should do before making a tech-investment leap.  We concur wholeheartedly and thus share their thoughts (and  few of our own) with you today.

  1. Without business process reengineering, new technology will simply pave the cow paths. Too often, companies jump into their enterprise software initiatives without redefining their business processes (in other words, simply automating already broken business processes). Business process reengineering is an important first step and foundation to an effective ERP implementation, so even if technology is a key part of your roadmap, make sure that you’ve done the heavy lifting to redefine key business processes prior to implementing a new system.
  2. Technology is useless without the right guiding enterprise and IT strategy. It’s easy to quickly embark on a new technology system because it will be an improvement over what you currently have – regardless of whether or not it fits into your strategic plan. There are simply too many options and variables to consider in the technology space, which can cause some to stumble when those decisions don’t fit your overall strategy. (Thus, we would add, be sure you have your strategic and business goals properly defined well ahead of your cash investment.)
  3. Organizational change management is what ultimately drives transformation – not technology. People and processes drive change.  (And here then we would add: This is where the “technology is not a cure-all” thinking comes into play.  You can’t throw tech at a people/process problem.  First define the problem, then map the process (old vs. proposed new), then factor in everyone’s feelings and input about proposed changes, and then, maybe… look at how technology can help improve your lot.)
  4. Even if it really is time for a new ERP system, the other non-technical aspects of your initiative will drive true business transformation. (Our comment: Technology is just one component of your transformation.  Be sure it serves your people/process needs first, and not the other way around.  Look at all your needs from all angles, and given the typical cost constraints under which most companies labor, choose your targets judiciously.  Map out just 2 or 3 key strategic objectives for starters, and build slowly from there.  Take it slow, keep it go, as my old Slovenian grandpa used to say.)

You can find the full text of Panorama’s thoughts here.

 

 

Read Full Post »

bprIn our prior post we touched on the first two of five tips for ensuring reduced costs and improved competitive differentiation by analyzing and then reengineering your business processes before you implement a new ERP system.  We ran out of space before we could cover the final 3, as suggested by the folks at Panorama Consulting, so we’ll wrap up with those last 3 business process reengineering tips today.

The third tip is to define and quantify your potential cost savings.  Start by looking at your pain points relative to your current state, and evaluate how you can map solutions to these in the new system.  Look for areas of improvement such as automating your current manual processes.  Look for areas of redundant data entry.  (We’ve found it’s not unusual for customers to record the same data three or more times by different people in different places for different reasons.)  Time spent looking for information in multiple disparate silos is one of the all-time great time-sucks with its resultant expense.  Take the time to quantify the times and economic gains – if only because you’ll be astounded at the waste you’ll find and thus all the more anxious to keep your automation project moving forward.

Step four is to evaluate non-labor savings as well.  How much could you reduce inventory with better visibility into your supply chain, your work-in-process or your purchasing channels?  With better visibility over inventory, how much better might you project customer demand?  What about accounts receivable?  Is it as automated as it could be?  Non-labor savings are important because most companies are not going to lay off people when they create the labor savings noted in our prior paragraph.  Those tend to be soft cost savings, whereas non-labor savings fall into the hard costs category and are often more immediately tangible.

Finally, measure the results, striving for realistic, incremental improvements.  It’s a process, not an event.  You won’t realize the benefits if you don’t measure the results, but you’re not likely to create miracles overnight.  The cost savings will come gradually, but they will come.  To ensure that cost savings materialize, be sure you’ve defined the proper criteria and mapped out the expectations.  Equally importantly, be sure all your users are clear on what you’re doing and the results you are expecting.  You’re looking for root causes of waste, identifying means of correction, building improved processes into your software workflows, eliminating redundancy and waste… and then measuring your progress (and fine-tuning) until your see the results you’re looking for – or understand why not.

 

The bottom line though is very real: Implementing real process change as the natural precursor to implementing an ERP system will provide the economic justification and eventual payback for having implemented in the first place.  So don’t skip the critical analytical work that will ultimately deliver the cost savings you did it all for in the first place!

 

Read Full Post »

bpr_imageWe 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…

 

Read Full Post »

steps to better erpA blog called Inside ERP posted a few cogent tips for those looking to improve the odds of success in their implementation efforts, in a post published at the IT Toolbox (here).  Their tips “start at the top” by reminding us to…

  1. Get support from the top. Remember, ERP is a business-wide project, so it requires executive buy-in at all key stages of the project.  As one provider noted: “Starting with senior leadership, there needs to be overwhelming support for a new way of doing things to encourage cooperation and adoption.”
  2. Assign a dedicated project lead. Whether internal or external, there needs to be an experienced project leader at the helm to safely guide implementation through the various political and technical challenges that the project will face. Look for someone that is persuasive, has good political skills, is an effective communicator and has enough domain experience in the matter to understand best practices. 
  3. Define organizational needs up front. At our firm, we include this as an integral part of our “Business Process Analysis.”  Define the business needs, and ensure that the software project is mapped to your firm’s required workflows and processes.  Create a list of requirements and desired outcomes at the start of the project.  You need to know at the outset “what success looks like.” 
  4. Plan for scope creep. Scope creep is usually feature creep.  It’s important to set realistic expectations at the start of the project.  Setting milestones and individual responsibilities will help.  Of course, you’ll have a process for change-orders and their approval in place, right?  Regular project meetings will greatly help to ensure that projects are staying on course. 
  5. Be ready to adjust business processes. Rather than taking the path of least resistance by avoiding “meddling with existing business processes,” recognize that an ERP implementation is the most ideal opportunity you will ever have to change and improve your processes and workflows.  Where possible, make the changes and the software work in synch.  If you only implement a new system in order to mimic the processes of the past, how are you really improving the business? 
  6. Give training its due. According to Gartner research teams, “75 percent of enterprise ERP implementation failures come from lack of end user adoption.”  Your staff needs to understand the new ERP system and how it benefits them and the company overall. They also need to know how to use the ERP system properly.  Training is overlooked or under-budgeted completely at the risk of the project.  Translation: don’t do it!  Don’t shortchange training.  It’s where the rubber meets the road, and it ensures your staff that you care about them – and about the success of your project!

Read Full Post »

Older Posts »