A successful ERP implementation requires a focused and dedicated project team that understands the importance of defining “current state” and “future state” business processes. Organizations that define business processes before software selection are less likely to lose sight of the big picture of benefits realization because they recognize the role that business processes play in achieving corporate goals and objectives.
Although it is possible to define business processes without focusing on corporate strategy, relying on ERP software to automatically meet business needs with out of the box functionality can result in inefficiencies and workarounds. Needless to say, this can impede achievement of measurable business benefits for any organization. Defining current and future state business processes is essential if your organization hopes to achieve the business benefits it expects from the alignment of ERP software with overall corporate strategy. Unsettling data from our 2013 ERP Report reveals that 60% of companies achieve 50% or less of expected business benefits.
Defining current state processes before software selection will not only bring alignment and understanding to your entire organization but it will also help pinpoint broken and inefficient business processes. Once your organization has a clear understanding of its current operations, it can define the gaps between current and future states and use this insight to drive organizational change management activities throughout the project.
Defining future state processes is also an essential step before software selection. Organizations should define their future operational model independent of ERP software because software is simply a tool used to enable business improvements, not force them. Defining business process before selection ensures that your organization is not influenced by sales messages but by functional fit. Clearly defined future state processes reinforce corporate strategy and business goals and can direct customization and additional development once the best fit software is selected.
Following are four steps to ensure your organization’s business processes are aligned with your overall corporate strategy and objectives:
- Define your business goals and corporate strategy. Ask questions like, “Where do I want my organization to be in five years?” Also, determine at a high-level what kind of business processes are required to achieve desired business objectives.
- Define, in reasonable detail, your organization’s current and future state business processes. Your future state business processes should be designed to enable your organization’s corporate strategy.
- Define key performance indicators in order to track your organization’s progress and achievement of measurable business benefits once the new software is implemented.
- During ERP implementation, software should be designed, configured and tested to ensure alignment with corporate strategy.
Your organization’s overall business strategy should drive your ERP project from start to finish. This is especially true when it comes to defining business processes. To learn more, visit our Business Process Reengineering page and download our 2013 ERP Report.