Ever since I started Panorama Consulting in 2005, I have heard more than a few ERP vendors sell the notion that business process reengineering is irrelevant to modern ERP implementations. Their ERP software, they say, can do away with the need for too much focus on business processes since the “off-the-shelf” best practices will dictate how those new business processes will look.
It sounds good in theory, right? After all, it’s what we all want to hear: a sort of business transformation utopia that doesn’t require too much thinking or effort on our part.
The bad news is that rarely do these perfect case scenarios play out. ERP implementation project team members more commonly find that modern ERP software is too flexible to simply start using “out-of-the-box.” Even the simplest business processes and workflows have multitudes of variations and options to choose from. While this is mostly a good thing, it runs counter to the “forget about process reengineering” mentality so often touted by ERP vendors.
But that’s what’s happening in the market now. What will the year 2020 look like as it relates to business process management? Unlike the constantly evolving nature of ERP systems in general, business process management won’t change much between now and then. Here are a few things to expect over the next several years:
Business requirements will still need to drive ERP software. It’s easy to get caught up in the astonishing technological advances of new ERP software. Each year, ERP vendors spend hundreds of millions of dollars on making their systems more robust and user-friendly, but a successful ERP implementation is about the needs of the business – not the software. As such, implementing organizations should determine their business process reengineering needs first, before selecting and implementing the system that best fits those needs. This approach results in many secondary (but important) benefits, including the fact that it helps ensure selection of the best-fit software, and the technical implementation of the software is done faster and cheaper than if those activities were saved for the implementation phase of the project.
Implementing organizations will need to ensure that they budget adequate time and resources for business process reengineering. Business transformation takes time. In fact, it takes materially more time than the technical configuration, testing and deployment of ERP software. When developing ERP implementation project plans, the more successful organizations recognize this reality and budget time and resources accordingly. Rather than ensuring that new business processes can be defined in a matter of weeks, a more realistic approach is to ensure sufficient time for defining, documenting and implementing new business processes. Think of it this way: it probably took your organization several years or decades to adopt your current processes, so it is highly likely that it will take some time to change those well-established processes.
Business processes need to tightly integrate with organizational change management activities. Organizational resistance is one of the key reasons why process changes typically take longer than most people expect. Convincing employees to understand and accept process changes takes time – more than the “they’ll do it because we said so” philosophy we often see in our clients’ boardrooms. Employees typically don’t actively resist change. Instead, they more commonly struggle to grasp the details and purpose of changes to their jobs, which can be challenging to overcome. An effective organizational change management plan ensures that this doesn’t cause business process reengineering issues and ERP implementation failure.
Integrate analytics into business processes. Robust analytics, business intelligence, data warehouses and reporting are some of the more significant innovations of ERP systems in recent years. Instead of simply storing massive amounts of data in their ERP software, organizations can now glean real-time insights into their operations and financial results. However, none of this matters if these analytics aren’t built into the standard business processes of your organization. Therefore, successful companies now and in the future will more effectively integrate data and analytics into their day-to-day business processes and ERP software initiatives.
While none of this is much of a change from best practices of today, we expect that more organizations will embrace these proven critical success factors in 2020. We already see a distinct difference in the ERP implementation success rates of organizations that adopt these philosophies and frameworks versus those that don’t.
To learn more about how business process reengineering has helped organizations increase their ERP implementation success, download our 2014 ERP Report: Business Process Management and register for our webinar this Thursday, Business Process Reengineering: A Key Component to ERP ROI.