As we have pointed out in previous blogs and industry presentations, creating a business blueprint is critical to a successful ERP implementation and ERP System Strategy. While most ERP software vendors, consultants, and system integrators claim to focus on business processes, most don’t do it well. In fact, a simple review of most ERP business blueprint deliverables that other system integrators and consultants have created even for some of our more complex client organizations leave much to be desired (see example below).
With that being said, our experience and research shows that a contributing factor high ERP failure rates is that lack of focus on business process management, mapping and blueprinting. Before clarifying the difference between full-blown business process management and business blueprinting, it is first helpful to understand the importance of this critical activity. Succinctly, an organization’s business processes serve as the foundation of the entire implementation. In other words, several key activities – including training documentation, conference room pilot testing, organizational change management, system security profiles, end-user training delivery and benefits realization – all rely on clearly defined business processes. Without clearly defining business processes, organizational roles and responsibilities in the new system, and related performance metrics, organizations will undoubtedly end up with an ERP system that is misaligned with business needs and fails to deliver the expected business benefits. In other words, it’s no coincidence that most implementations fail to deliver expected business benefits (over 50% according to our 2012 ERP Report) and at the same time fail to focus on effective business process management. Here are five things to look for when evaluating whether or not your project has the right degree of focus on business process management:
1. Software configuration checklists versus end-to-end business process workflows. The thing to remember about most ERP consultants and system integrators is that they are focused on software functionality, not your business, so most of their perspective focuses on defining what they need to know in order to configure the software appropriately. While this is certainly important to a successful implementation, it is a myopic focus that typically results in ill-defined end-to-end business processes and diluted user acceptance of the new processes. For example, we have found that most SAP system integrators’ business blueprint deliverables typically read like a high-level list of business requirements rather than a robust series of documentation that help employees understand the detailed end-to-end workflows. If this is the case for your ERP implementation, then you may want to revisit your overall business process management approach to ensure your project team has a more effective focus.
2. As-is versus to-be business processes. Although companies implement ERP software with the intent of improving and automating business processes, most end up with a product that largely “paves the cowpaths” by replicating legacy operational inefficiencies. This is the symptom of the deeper issue, which is lack of focus on defining “to-be” business processes. ERP vendors and system integrators further compound this problem by over-selling and misrepresenting things like “pre-configured solutions” and “industry best practices,” which are typically simply inventories of ways that past clients have automated their inefficient business operations. This is why organizations that are the most successful in their ERP implementations are the ones that take the time to define their to-be business processes prior to implementing new software rather than relying on the smoke and mirrors of industry best practices baked into the software, which typically don’t exist.
3. Business process mapping versus optimization and re-engineering. In addition to a focus on to-be versus as-is processes, one of the significant benefits of true business process management is the focus on improving business processes. Even among the few system integrators’ that have some level of focus on business process mapping, most hone in on simply documenting business processes rather than identifying measurable ways that these processes can be improved. Panorama’s business process management approach, on the other hand, embeds key components of lean Six Sigma and other business process improvement methodologies to ensure that clients define and implement processes that truly improve operations in a measurable way. So when evaluating your ERP project’s focus on optimizing and re-engineering business processes, look at how well your team or consulting firm incorporates solid methodologies and business experience into the project.
4. Business process implementation prior to and during the ERP system rollout. Well-defined business processes – no matter how much better they look on paper – are worthless if they are not adopted by your organization, and they won’t be adopted by your employees if you don’t take key steps to implement those new business processes. Perhaps the most flawed approach when it comes to this is to assume that simply implementing new software with better processes will result in improved business processes, which simply is not true. Employees need to be trained on new business processes, including how exactly the business processes will flow and what their role will be in the new environment, which is too much to cover in end-user training just a few weeks before go-live. For this reason, many of our clients hire us to help implement process changes and improvements in parallel — or even before — the ERP implementation. This helps spoon feed the changes to employees and enables the organization to recognize immediate business benefits even before the software is implemented.
5. Organizational roles, responsibilities and changes. New business processes and better ERP systems to support those processes are great, but it’s the people and the organization that will make those changes happen. In order for full acceptance and business benefits to take place, employees need to understand, embrace and own the business process changes, including their roles and responsibilities in the new operational model, the specific changes that they need to be aware of, and other key messages necessary from an organizational change management perspective. Unlike our competitors, Panorama bakes key organizational change management activities such as these into its business process management and approach.
At the end of the day, a business blueprint is important to an ERP implementation. In fact, it is a key deliverable of our extensive business process management services we provide to our ERP clients. However, it is only one component of a more comprehensive business process management methodology, which is one of the key reasons why most ERP consultants and system integrators have historically failed in their attempts to implement ERP software. Learn more by attending our webinar, Business Process Management: A Critical Success Factor of ERP Implementations, on May 10 at 10 a.m. MT.