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Considering a new ERP system for your business? Can you articulate why need new software? Is it all just a “feeling” that things are not working right? Is it just a “hunch” that data is not integrated? Do you “think” your processes are antiquated or too convoluted?

No matter how small or how big your business is, it is extremely important to understand and to document your processes.

As a consultant, it is always amazing to me how difficult generating ERP requirements can be. Listing requirements, and blueprinting your processes can take months instead of weeks or days without the proper information.

Many companies have little, to no, documentation regarding the functions carried on right under their noses. There are no statistics, no process flows, not even job descriptions that match up to the daily activities within each department. Many companies rely on their managers to make sure things are done right, but never have the ability to measure if it is done “smartly”.

It is next to impossible to determine if a new ERP system is even necessary, if you can’t describe why you really need a system.

And as for measuring the before and after, forget it. With no real metrics for how your business software performs prior to purchasing an ERP system, there is no benchmark for post installation.

There are many reasons to document. Do it now, before you need it!

  • Identifies areas of concern
  • Provides employees with insight into their areas of responsibility
  • Highlights problems that may be fixed internally now
  • Provides you with real job descriptions
  • Identify redundancies
  • Provides benchmarks for improvements
  • Gives you a head start in determining your software needs
  • Speeds selection of software
  • Engages your employees
  • Provides Regulatory and compliance, internal and external audit
  • Develops employee and departmental performance standards

How detailed should you be? Put your processes under the microscope! Ask every question you can think of, and write it down. As an example take a simple task such as order entry and ask the questions.

  • How do we get our orders? EDI, fax, hard copy, phone… and what are the percentages?
  • How many orders do we receive every day?
  • Who receives the orders?
  • Are the orders edited?
  • How many active customers do we have?
  • How many orders do we receive from new customers?
  • How many orders fail in EDI?
  • How many orders cannot be entered without further research?
  • How long does it take to enter an order?
  • How many orders fail credit checks?
  • How long are they on credit hold?
  • What is our processing time from receipt to shipment?
  • How many orders have multiple lines?
  • How many orders can be filled complete on the first pass?
  • Can you promise ship dates at order entry time?
  • Can you verify pricing at order entry time and match to the price the customer sent?

Does it need to be beautiful? No. Flow charts are nice, but a simple word document with step-by-step processes and measurements are sufficient. Don’t forget that by engaging your employees they feel empowered. You may be surprised; the users often have ideas for process improvement.

You get the picture. Leave no stone unturned, especially those processes that identify pains and problems. Your first pass will probably highlight the fact that no one has the answers. So start measuring and keep measuring!

Whether process documentation is used to help with an ERP system or just to improve your processes, these steps are crucial to making a good business a great one!

You are never too small and never too large to identify, document and improve.

Blog entry written by Jeanne Hedman, a Senior ERP Consultant at Panorama Consulting Group.