It’s unlikely that someone would go on a long journey without first procuring a map and planning their route. People have an easy time visualizing a destination when planning their route but don’t understand the pitfalls that lie in the journey. Business process management is the roadmap to the destination of a successful ERP implementation. Like all roadmaps, there are multiple routes to consider. Within an ERP implementation there are various levels of business process management to consider as you design your new system:
Business Process Management (BPM) – Business process management is a holistic approach used to evaluate, improve and align business processes to an organization’s overall goals and strategy. It enables businesses to be more efficient and flexible to change.
Business Process Improvement (BPI) – There are a variety of approaches within business process management; the first being business process improvement. In this approach, it’s important to examine the key processes within an organization that are competitive differentiators. Six Sigma methodologies are used as a backbone to evaluate and improve key business processes. First, organizations identify the current state and primary key performance indicators to measure success. Next, organizations determine root cause, validate root cause and improve processes to optimize ultimate efficiency. Finally, organizations put a control plan in place to monitor the ongoing process and ensure checks are put in place to trigger appropriate responses if key metrics fall out of control.
Business Process Reengineering (BPR) – Business process reengineering identifies the current process but requires a more radical change. It is used when current processes can’t be improved with minor changes but need to be redesigned from scratch, creating a new process from start to finish.
Business Process Optimization (BPO) – Optimization looks at all of the existing processes within the business and seeks to improve them to reduce the company’s overall cost to produce. Before you place software atop a process, you want to ensure the process is operating at maximum efficiency, because when you automate an inefficient process, you only make an inefficient process faster. This is why BPM is so essential to an ERP implementation.
Today’s ERP systems are very flexible. There are multiple – sometimes even hundreds – of different ways ERP software may accommodate your business needs. Understanding your desired state prior to implementation activities will save time later in the process and reduce the risk of choosing the wrong configuration. It tells the ERP vendor how you want your processes designed so they can select the configuration that accurately aligns with those processes. It also gives you knowledge of what processes may require customization and an understanding of additional costs you may incur for it. Choosing the right level of business process management is critical to designing a roadmap for your ERP implementation.
Having a roadmap in place is a smart way to avoid the common pitfalls associated with getting lost along the way. Learn more about what business process management really is by listening to our on-demand webinar, Business Process Reengineering: A Key Component of ERP ROI.
Written by January Paulk, Director of Organizational Change and Business Process Management Services at Panorama Consulting Solutions.