Baseball great Yogi Berra used to say, “If you don’t know where you’re going, you might not get there.” This simplistic quote has survived through the years because it holds an undeniable truth – you need to have your direction and goal in mind before getting started or you’re likely to get lost and miss your target entirely. This saying can be applied to countless circumstances in life and an ERP implementation is no exception. Before you commit your time, effort, resources and money to a complex ERP project, you need to have a clear picture of where you want your business to be in the future.
The first step in determining where you want to be is to understand where you are. Knowing how your business currently operates and having business practices clearly documented is important for several reasons.
Knowing what you’re doing today and how it is done allows you to identify the unique differentiating factors that distinguish your organization from your competitors. This is important information to have when you’re headed into an ERP implementation because you can make sure you preserve the practices that provide competitive advantage. Without having your current state business processes documented, there is no way to ensure you are keeping the pieces that make your company stand out in the marketplace.
On the flip side of this equation, when documenting your current state business processes the inefficiencies involved often become obvious. The same exercise that allows you to identify and preserve the practices that give your organization its competitive advantage also gives you the opportunity to recognize areas where you can stand to improve operations. Ultimately, your business process documentation should serve as the foundation for the design of any new ERP software solution.
Even when inefficiencies are less obvious, having your current business processes documented helps to evaluate areas for process improvement. ERP vendors often have their software’s standard practices defined, which you can compare to your business processes by performing a gap analysis. Once you define the gaps between what you’re doing today and how the ERP software would handle a task, you can weigh the benefits and drawbacks to each method and make an informed decision as to how the process should be executed moving forward.
Another advantage of having clearly documented current state business processes is the reduction in the time needed to communicate with both internal and external parties. Whether you’re onboarding an outside consultant so they understand your business, training new employees in your company’s practices or proposing a new way to complete a task to your executive group, a picture (or well-structured, detailed procedure document) is worth a thousand words. This is especially true for complex business processes.
Being able to point to a standardized process document will also eliminate misalignment between individuals doing the same job. Without formal documentation, each employee in a certain functional area may have their own way to accomplish tasks, leading to arguments over the design of new ERP software. Such an inconsistency can wreak havoc on an ERP project’s timeline and budget.
Having clearly defined current state business processes is a distinct advantage that reduces the time, effort and cost associated with an ERP implementation. Clearly defined business processes can streamline communications, standardize system design and serve as excellent training materials. The upfront costs of putting together comprehensive process documentation will not outweigh the benefits.
Learn more by watching our on-demand webinar, Business Process Reengineering: A Key Component of ERP ROI.
Written by Chris Wojciak, Senior ERP Consultant at Panorama Consulting Solutions.