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Posts Tagged ‘Business Process Analysis’

it_challengesRecently, Panorama Consulting posted a piece we swear they must have written after overhearing some of the conversations we have among ourselves and with clients.  Their post concerns the need for companies today to leverage the availability of outside resources and expertise – so they don’t have to ‘go it alone’ when it comes to surmounting a few key IT strategy challenges.  The four they call into play include:

1. Creating an IT strategy and roadmap that fits your business. There is a bewildering array of choices in enterprise software and technology solutions.  SMBs have little room for error, given their modest budgets.  Thus it is critical to work with an outside consultant who can objectively assess your needs.  

The best of them can present two options: what at our firm like to call biased and unbiased.  An unbiased analysis will be largely software agnostic: just tell us what we need in tech and software by providing us with a roadmap, and we’ll seek out our own options. The biased approach says: You guys know the territory.  Apply your own filter or bias if you think you have a solution that fits, and we’ll factor your views into our thinking.

Either way, you want to end up with a ‘roadmap’ that has been vetted by external experts to give you that extra bit of assurance that you’re on the right track.

2. Organizational adoption of new systems. Whatever decision you reach about your IT future, it’s bound to stir up some change, both direct and indirect.  Never underestimate the need for organizational change management.  Tech firms often spend too much time on the “tech” and not enough on things like people, strategy, and the business.  Be sure you keep your eyes on the prize.  Good consultants can help ensure that you’re focused on all the right business objectives, and help you manage and direct the change within your organization.

3. Alignment between new technology and your current business processes. We can’t say it too often: your technology doesn’t mean much if it is not aligned with your business processes.  You need to define and chart your workflows, and work with your consultant or provider to ensure that your software and systems match that flow.  Be sure you’re thinking about future processes when you do this.  Focus on the pain points.  A consultant with Six Sigma experience can help greatly in ensuring that your technology is well aligned with your underlying needs and processes.

4. Realizing the ROI of enterprise technology investments.  New technology, as Panorama notes “may sound good in theory, but if it doesn’t deliver tangible business benefits, then it isn’t helping your organization.”

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7 mythsAs ERP consultants we frequently and regularly preach to our customers and prospective customers the value and importance of analyzing their processes before an ERP implementation (and sometimes during when revisiting those processes in greater detail).  The result of a business process analysis (or BPA in our parlance) is usually some form of business process reengineering.

So we’re always interested in other consultants’ opinions about the process of both BPA and BPR.  Recently, the CEO at Panorama Consulting suggested 7 Myths of Business Process Reengineering, which we thought worth reprising in today’s post.  Here then, are Eric Kimberling “7 Myths” along with an abbreviated synopsis of his comments.  (You can access the full post here.)

  1. Business process reengineering doesn’t need to happen on ERP projects. Perhaps the most misguided of all. Every ERP system will wreak some sort of havoc on your business processes. Most of these changes will be positive improvements, but will still require some effort in defining your operations in the new system environment.
  2. Simply implementing a new ERP system will drive process improvements. The most pervasive myth. Today’s ERP systems are extremely robust and flexible, meaning even the simplest business processes can be performed in a wide variety of ways. This leads to a need for pre-defined business processes so the software can be configured and/or customized accordingly.
  3. ERP project teams should focus on “to-be” rather than “as-is” processes. If you are the organization making the changes or the employees doing the work every day then the current processes absolutely DO matter.  It is thus critical that you assess the current state of your processes to help you obtain the future state as part of your business process reengineering and optimization efforts.
  4. Business process improvements can be done without organizational change management. Too many executives think that they can simply redefine and implement business processes without organizational change management. This is a misguided view. The most effective business process reengineering efforts succeed largely because of the way organizational change is addressed – not because of how well the processes were defined on paper.
  5. You can’t reengineer business processes before knowing which software you are going to implement. It is typically more advantageous and efficient to both evaluate and improve your business processes prior to selecting and implementing a new system.
  6. All business processes need to be overhauled before selecting and implementing a new ERP system. Not true. Typically, the most successful organizations focus on improving their core areas of competitive advantage or differentiation as part of their ERP implementations, while letting other non-core business processes follow the lead of the software’s out-of-the-box functionality.
  7. Business process reengineering will cause my ERP implementation to take more time and money to implement. The Achilles heel of many failed ERP implementations is that they assume that “doing things right” will cost more time and money than if they cut some corners along the way. While it may look good on paper to strip out any extensive business process work, the reality is that your project will most likely take longer to implement and proceed to fail at go-live if business processes are not adequately addressed as part of your implementation. Remember that it is much less expensive to do things right the first time than it is to do clean up after an ERP failure.

We couldn’t agree more with Kimberling’s points, and urge all companies embarking on their own ERP initiative to take them to heart.

 

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bpr magnifying glassAccording to a 2014 Business Process Management Report produced by Panorama Consulting (available here)

“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…. [and] are more likely to receive the business benefits that they expect from their ERP systems.”

Panorama lists three reasons why business process reengineering is sometimes overlooked (and then list 3 things you can do about it):

  1. Business process reengineering (or Business Process Analysis) appears to cost more time and money – at least on paper. After all, if we configure and implement ERP software without spending time to analyze (and change our processes), won’t the implementation go faster?
  2. Less experienced implementers defer to the ERP software to deliver business process improvements. This, Panorama points out, is like the “easy button.”  The software is so robust, surely it will fix all our problems, right?  In fact, the complexity can be overwhelming, and will cost you a lot more money if your processes aren’t well-defined before you design and build the phases of your implementation.
  3. Too many organizations think that they will simply start with a clean slate and throw out their old business processes. The truth is, you don’t want to throw the baby out with the bath water.  Sure, some of your old processes may be outdated or inefficient.  But don’t neglect those things that have made you successful.  Your people need to be trained in a way that connects your “future state” business processes to how things are being done currently.  Here, communication and training become key.

Panorama then provides 3 tips to help ensure that your team avoids these pitfalls:

  1. Don’t forget to address both your current and future business processes. Identify the gaps between current and future state and ensure employees understand what is changing, and how.
  2. Begin defining business process improvements prior to your ERP implementation. (At our firm, we always start here.  That Business Process Analysis is the critical first step – it builds the roadmap for the ERP implementation and all that follows.)
  3. Use your reengineered business processes as the foundation for your organizational change management and training strategy. Document and communicate to all persons what’s changed, how it’s changed, and how things work in the future.  It’s all about training and communication.  Whatever you do – don’t ignore these critical elements.

Just like Panorama, our long experience bears out their very good advice.  Take it to heart.

 

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bpmWe noted in our prior post, the first in this two part series, that companies that combine Business Process Management (BPM) with Enterprise Resource Planning (ERP) have much greater success in identifying best practices, implementing them, and then spreading them across their organizations, according to Aberdeen Research’s 2013 BPM Survey of over 400 firms.

Today, we’ll wrap up our review of Aberdeen’s conclusions by looking at the impact of these initiative on agility and efficiency, and reprise some of their key takeaways.

Aberdeen notes that firms that combine BPM and ERP exhibit more agile tendencies.  For example, nearly half of firms who do both report that they have systems in place to deal with non-compliance and recall events.  This can help them avoid fines, or for manufacturers, avoid providing harmful materials to customers.  And they are three times more likely to be able to alert customers when these events do occur.  They can react immediately, and adjust processes to keep things running smoothly.

Additionally, firms uniting BPM with ERP allows companies (55% of those surveyed) to provide employees with a “centralized repository of work instructions.”  Thus, all employees can live up to best practices and company standards, thus serving clients more quickly while increasing satisfaction and decreasing costs.

Finally, Aberdeen shares some of the key takeaways firms see in performance improvements.  These included:

  • A 4% improvement in complete and on-time delivery of products and services
  • Seven times the year over year improvement in the amount of time it takes to respond to customers
  • A 33% greater decrease in the time it takes to make decisions year over year
  • An 8% improvement in profit margins over the past year

There’s a strong tie between these two technologies.  BPM coupled with ERP helps institutionalize the company’s policies and best practices in ways that enable better management and improved results across the firm.  They are a natural pairing that can, indeed, support an organization from beginning to end.

Need help with your BPM or ERP initiatives?  The resources are out there.  (Just ask us.)

 

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BPM AberdeenBusiness Process Management (BPM) enables organizations to execute and continuously improve.  (At our firm, we call it the “Business Process Analysis,” or BPA) When combined with Enterprise Resource Management (ERP), it enables an organization to execute more efficiently, better manage workflows, eliminate waste, and reduce overall costs.  In fact, they go hand-in-hand with the Lean, the modern initiative aimed at weeding out all the above.

Companies implement BPM and/or Lean for just a handful of key reasons, according to research performed by the Aberdeen Group.

The key reasons for doing so are:

  • Lack of innovation and outdated business processes, cited by 45% of Aberdeen’s survey of over 400 firms for its 2013 BPM Benchmark Survey.
  • Improvement of quality and consistency of products and services (cited by 41%)
  • Simplification and removal of risks from business processes (33%)
  • Maximize return on assets (28%)

The major focus hinges on improving business processes.  Simply put: Use business process management to identify and scope those changes, then use ERP to institutionalize them.

According to Aberdeen, organizations that employ both BPM and ERP “are more focused on continuous improvement.”  It seems they may have gotten to that point by embracing lean initiatives, and then learn that implementing BPM with ERP is the key to fulfilling lean’s promise.  Companies who do both were reported to be significantly more likely to…

  • Deploy or reuse business processes across the enterprise
  • Dynamically update those business processes as new best practices emerge, and
  • Utilize the best practices included in their ERP solution

BPM helps design the business processes; ERP ensure they are communicated and standardized across the organization.  In fact, companies that do both are twice as likely to be able to dynamically update business processes as new best practices emerge, according to Aberdeen.

In the second of this two-part post, we’ll take a quick look at the impact combining BPM and ERP on agility and efficiency.  Then we’ll see where the performance improvements occurred and leave you with a few key takeaways.  Stay tuned…

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erp success graphA recent article from Panorama Consulting noted that while many, some say even most ERP projects take longer than expected, go over budget, and fail to deliver expected business benefits, research from Panorama’s “2013 ERP Report” indicates that an overwhelming 86% of surveyed firms still report being generally satisfied with their ERP implementations.

Why the dichotomy?  Well, at least partly it’s because those companies had no clear definition of success.  So once the transition pains subside, they report overall satisfaction.  Perhaps raising the bar a tad is in order, and to this end, we submit Panorama’s three key steps companies can take to ensure their ERP project teams actually achieve real success…

1.) Clearly define success.  While for many companies we see, “anything is better than what we have…” you’re not spending hundreds of thousands (or in large companies, millions) of dollars to achieve incremental success.  You’re looking for a tangible return on investment from your software.  The “business case” should be the key mechanism for both justifying the investment and for defining what constitutes success.

2.) Articulate expected process improvements.  Expected business improvements should be equally well defined and clearly articulated to the project team.  More than merely suggesting software will make things better, the process improvements should be clearly defined and documented in a way that they can actually be enabled.  For our clients, we like to define these during the initial Business Process Analysis in order to ensure they become a part of the eventual solution.  If you clearly define the ‘before’ processes and then the proposed ‘new’ processes, you stand a much better chance of actually streamlining operations.

3.) Conduct post-implementation audits.  About 90 days after implementation, conduct an audit to ensure that actual results are measured and compared to expected benefits.  Look for places where processes are breaking down, inefficient, or not delivering results.  While painful, this is often the low hanging fruit that can help justify early investment.  We often find that training is a key area that has been neglected.  Often too, we find that report creation, business intelligence, drilldowns, and all the ‘after-the-fact’ data revealed by the new system is ignored or insufficiently exploited.  The post-imp audit period is the perfect time to look for improvement in these areas.

Words to the wise…  it’s all about getting your money’s worth!

For contrast, in our next post we’ll take a quick look at what Panorama Consulting says constitutes an ‘ERP failure.’  Stay tuned…

 

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You would think that as consultants and purveyors of ERP systems we would be loath to share the horror stories of failed ERP implementations.  But quite the contrary.  Actually, the lessons learned are, with all due humility, the very lessons we preach to our prospective customers almost every day. 

Well, recently the editor of the leading news magazine of our industry, Information Week, extolled our very advice in an editorial in the June 13th edition.

There, Rob Preston, Editor in Chief of Information Week related the story of how MontclairStateUniversityis suing Oracle over its failed implementation.  The short version is that MontclairStatepaid Oracle a fixed-fee $20 million to deploy a PeopleSoft solution for them.  When Oracle came back later for another $8 million, the University refused to pay, and Oracle walked away.  The University claims it then took another $20 million to have outsiders finish the job without Oracle.  Lawsuits ensued.

The story is not unlike others heard before.  The litany of failed implementations includes major companies like Nike, Hershey, Waste Management and scores of others.  Big companies.  Big bucks.  Big failures.

While it’s true as the article points out that customers often don’t pay enough attention to the mechanics of their licensing deals,Prestonconcludes his article with this observation:

“Software vendors aren’t in the business of understanding and adapting to their customers’ processes.  Especially for complex and costly IT deployments, customers need to invest more in the up-front evaluation, even if that entails paying a good chunk of money to a third-party expert to conduct a detailed requirements analysis and align it with the contract terms.  An ounce of prevention is worth a ton of lost business, legal fees, and PR backpedaling.”

How true.

We tell every client we talk to that the best way to ensure a successful ERP deployment is to engage in a detailed “Business Process Analysis” before they spend any money on software.  Heck, we represent four different ERP systems, we’ve been in the business for 25 years, have hundreds of clients… and we still can’t tell you what you need until we’ve done an in-depth analysis of your needs.  After all, as we often say, we cannot quote what we do not know.

And now, thanks to Information Week, you’ve heard from “the experts.”

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