“Out with the old, in with the new.” We all know the phrase and ERP is no exception. When clients approach us to help them select and implement new ERP systems, improving business processes is one of the main drivers for wanting to replace their legacy systems. Most of our clients have systems ranging from 12 to 15 years old. During that time, many of these organizations have grown, gone through massive organizational changes and developed a number of bad habits along the way – paving the way for improved business processes.
Many organizations tend to run their enterprise software implementation projects in ways that undermine their process improvement efforts. This may help explain why, according to our newly released 2015 ERP Report, only 58% of organizations consider their ERP implementations successful and only 45% are satisfied with their ERP vendor post implementation.
If you don’t manage your business process reengineering initiatives appropriately, here are three ways your organization’s bottom line will suffer:
- Not spending enough time on business process reengineering during your ERP implementation. The most fundamental shortcoming for many organizations is the failure to recognize the need for business process reengineering. Not allotting for the appropriate focus, time and resources can make your processes worse than prior to your implementation. Half-baked business processes lead to confused and frustrated employees, which leads to lower bottom-line results. Our experience and research shows that the most successful ERP implementations are the ones that develop project plans with a business process focus rather than a myopic “software only” implementation.
- Deferring to your chosen ERP software to tell you how to reengineer your business processes. ERP vendors sell their software stating that the software will tell you how to run your business more effectively. While this may sound good in theory—don’t fall for it. Even with all of the capabilities of today’s ERP systems, you still need to roll up your sleeves and define how you want your business processes to look and work if you want the system to be a success. If you simply allow the software to make the decisions, it will force your organization to go over both time and budget and could completely fail to deliver any meaningful business benefits.
- Underinvesting in organizational change management to help make the processes stick. Even if you do take the time to articulate your future business processes, it will be worthless if your employees aren’t well-versed in the new processes. For example, let’s say you have 200 employees affected by the new system. Each of those employees has an average of 10 tasks they need to adapt to in the new system (a very conservative number since most implementations involve many more). This translates to 2,000 changes that the people in your organization will need to adjust to.
2,000 potential points of confusion
2,000 potential process breakdowns
and 2,000 ways to undermine your bottom line if organizational change management isn’t adequately addressed.
Basic end-user training won’t cut it, either. You need a comprehensive organizational change management plan ensuring your employees are comfortable with changes well before go-live. (Learn more about Panorama’s organizational change management methodology here).
There is good news! There are easy fixes to these common pitfalls:
- Devote. Make sure that you devote the time and resources in your project plan to account for these important business process activities.
- Develop. Verify that a comprehensive organizational change management plan is developed and implemented to help institute the changes within your organization.
It may be easier said than done, but these two things will have a more material impact on your bottom line to certify that your implementation can be a success.
Learn more about business process reengineering by downloading our 2015 ERP Report.