While many organizations are racing to ERP go-live, some are taking the time to improve their business processes. They are not concerned with implementing their ERP system as quickly as possible. Instead, they’re focused on beating the competition by ensuring their processes are optimized.
They may finish second in the race to go-live, but they’ll win the race that actually matters – the race to grow their customer base and increase revenue.
This is why business process work is so important to a successful ERP implementation. One approach that many organizations take is business process reengineering. This involves analyzing your current processes to see where you can gain efficiencies and alleviate pain points. Then, it’s about redesigning the processes that will result in the greatest benefits.
Without some form of business process management – whether it’s process reengineering or another proven approach – you could automate inefficient processes and limit the ROI of your new software.
The benefits of business process reengineering are clear, but many organizations skim over process work during their ERP implementations and digital transformations.
While business process reengineering isn’t right for everyone, you should consider it as one way to prioritize your processes during your enterprise software project. Today, we’re sharing the reasons many organizations do this reengineering, and we’re providing some proven best practices for this approach.
Selection & Process Improvement Case Study
In helping the client get its project back on track, one of our primary focus areas was decreasing their customization needs by improving their processes to align with the system's best practices.
7 Benefits of Business Process Reengineering
1. Supports Your Project Goals
Why does your organization want to implement ERP software in the first place? Maybe you want to make your company more competitive or optimize your customer service.
You can’t reach any of these goals unless you know where you currently stand and what needs to change.
Business process reengineering is about understanding your organizational goals and determining if your processes align with these goals. Ultimately, you will be able to determine what processes to redesign and what software to select.
2. Improves Operational Efficiency
As you redesign your business processes, you’ll naturally come across workflows that are causing pain points for your team members. There may be communication breakdowns, operational bottlenecks, and a host of other issues that employees deal with on a daily basis.
Behind these pain points, you’ll likely find superfluous steps that don’t add value to your organization but, instead, frustrate employees and customers.
When you reengineer these business processes, you can find ways to eliminate these complications and improve performance across the board. Then, when you implement new software, you can automate these processes to make them even more efficient.
3. Improves Lines of Communication
Without inefficient business processes standing in the way, your team members can more easily collaborate with one another. This facilitates teamwork and opens up lines of communication.
Employees will be able to find the information they need as soon as they need it. They can also share and distribute mission-critical data as the need arises.
Not only does this make interdepartmental work easier, but it also strengthens company partnerships and customer relationships.
4. Optimizes Your ROI
Investing in an ERP platform isn’t an inexpensive endeavor. If you’re going to pay this much, then you want to make sure you’re getting the most out of your investment.
Organizations that overlook process work are typically disheartened to discover that employees are still dealing with the same frustrations after go-live. In addition, business benefits are elusive and ERP failure seems imminent.
Don’t let this be you. If you reengineer and improve your processes, you ensure your new system brings business benefits that translate to high ROI.
Not only will you achieve a higher ROI, but you will ensure faster benefits realization. Well-defined processes are key inputs during the design and build phases of implementation, so when you have your processes prepared, these phases move faster, bringing you closer to go-live (and post-implementation benefits).
5. Enables You to Leverage Advanced Analytics
Many modern ERP systems incorporate advanced functionality for data capture and analysis. These systems use technologies like business intelligence, artificial intelligence, and predictive analytics to turn massive amounts of data into actionable insights.
This can be a treasure trove for any organization, but the data won’t be nearly as useful if you don’t have a plan for how to act on it.
As you define your future-state business processes, consider what workflows will enable your teams to analyze and act on data insights. With those processes in place, you’ll be able to make the best use of the advanced capabilities of your new system, which can give you a competitive advantage in your industry.
3 Business Process Reengineering Tips From Our Experts
1. Don’t Treat All Business Processes Equally
Many organizations are overwhelmed by the number of business processes they could potentially document, analyze, and improve. They don’t realize they can start by focusing on just the processes that are competitive differentiators.
These processes should drive your software selection and shouldn’t be constrained by software best practices, which may not be best practices for your unique operations.
For example, your customer service may be a source of competitive advantage. If so, customer-facing processes should be a priority during business process reengineering.
2. Integrate Business Process Reengineering With Change Management
Resistance to change is one of the main reasons that digital initiatives take longer than expected.
If you want to avoid this fate, you should take the time to identify the gaps between your current and future state, so employees understand new processes in the context of their day-to-day jobs.
An organizational change management plan includes more than training. You also need to communicate with stakeholders to ensure they are willing to adopt new business processes after go-live and in the long term.
3. Measure Results and Make Incremental Improvements
Measuring post-implementation results helps you stay on track to realizing the benefits of business process reengineering. If you’re not achieving a particular benefit, you should determine root causes.
For example, misalignment between business requirements and software functionality can deter benefits realization. The automation of inefficient processes can also be a root cause of poor benefits realization.
Continually measuring incremental results allows you to make corrections and realize many of the benefits that are threatening to slip through your fingers.
Reap the Benefits of Business Process Reengineering
Your chosen software should align with your long-term goals and support your organization for the next five to ten years.
Unfortunately, many organizations evaluating ERP systems haven’t taken the time to document their end-to-end processes, much less redesign key processes to support their goals. This doesn’t just slow down your employees, but it makes it difficult to maintain your competitive advantage.
Our ERP consulting firm can help you improve your processes before ERP selection. Contact us below for a free consultation.