Improving business processes has always been a key reason executives spend so much time, money and heartache perfecting their ERP implementations. Whether they are working to increase service to their customers, become more efficient and/or increase top-line revenue growth, most organizations look for some sort of tangible improvements to their businesses. With that said, business process reengineering is typically the only way to achieve these benefits.
However, something happens along the way to undermine those potential business benefits. After the ERP implementation goes live, most companies find that their business processes aren’t quite as efficient as they thought they would be. And to add insult to injury, business processes somehow end up looking a lot like the way things looked before their ERP implementations.
In our recently published 2014 ERP Business Process Management Report, we found that 100% of respondents had some sort of material operational disruption at the time of go live. After looking into this, we found that this disruption was largely due to poorly defined business processes. These disruptions are not of the usual “employees aren’t quite as productive” variety either. They are more significant, such as not being able to ship product or close the books with the new ERP system.
Below are just a few more examples of statistics we found in our 2014 BPM Report:
- Of the companies experiencing operational disruptions, 60% lasted at least one month or more.
- Roughly two out of three (63%) of organizations said that they experienced difficulty adjusting to new business processes.
- Only 47% changed their business processes to leverage functionality of the new ERP system. The remainder automated existing processes, changed the software to fit their desired business processes, and/or didn’t focus on business processes during implementation.
- The good news? An overwhelming majority (87%) either improved key business processes or all of them.
- A key factor when dealing with project timeline and budgetary overruns was due to business process reengineering challenges.
So what does this all mean for those of us about to embark on a new ERP implementation? Here are three things to keep in mind to help ensure that you achieve the best business process reengineering results possible:
Recognize that not all your business processes are created equal. Many of our clients feel overwhelmed by the sheer number of business processes and sub-processes that need to be documented, analyzed and improved. Rather than be stunned into inaction, we have found that it is more effective to prioritize your business processes and focus on reengineering those that are going to deliver the most bang for your buck. For example, an engineer-to-order manufacturer is more likely to realize significant business benefits from reengineering their product configuration business processes than they are analyzing their accounts payable processes. This will help ensure that you get the benefit of business process reengineering without having to derail the momentum of your project by overanalyzing your operations.
Integrate your business process reengineering and organizational change management activities. New and improved business process documentation doesn’t mean much if your people aren’t executing the envisioned operations. Rather than treat business process reengineering and organizational change management as two separate silos within your project plan and team, we have found it much more beneficial to integrate those activities. For example, the same people defining the new business processes should also be the ones defining the impacts of the new business processes on your various departments and workgroups. This is the most efficient and effective way to get the biggest bang for your buck in your business process reengineering and organizational change management activities.
Ensure your project plan includes enough time and resources to properly account for business process reengineering. Most project teams don’t ignore business process work because they want to. Instead, they often simply don’t have the time to address this and all of the other important project activities. However, those teams that are working within a more realistic and comprehensive project plan are more likely to tackle this important area – and their projects are exponentially more likely to succeed and deliver measurable business benefits as a result. Make sure you have a realistic plan to begin with and you will be one step ahead of most ERP implementations from the start.
Lost ERP business benefits and inefficient business processes don’t necessarily need to be a foregone conclusion. Companies that have realistic expectations and plan the right way from the get-go are more likely to dedicate the time and focus on these important business process reengineering activities throughout their ERP implementations – and they are typically more successful as a result.
Learn more by downloading our 2014 ERP Report: Business Process Management.