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Business Transformation

ERP process optimization – are you ready or not?

Thursday, September 5, 2013

It has always puzzled me that business process optimization isn’t yet an integral part of ERP projects in international mid-sized businesses. In a way the Dynamics ERP projects have always included some level of process optimization but often it’s more related to functions and features and does not take the organizational changes into consideration.

What is wrong with the common ERP process way of thinking? When I study analysis reports about ERP or IT-projects the conclusions are always something like “Top 10 reasons why project fails”. For me it would be much more interesting to read the list “Top 10 reasons why projects succeed”. Isn’t it fair to say that the old bestsellers like ‘7 habits’ and ‘From good to great’ would never have had the success if the titles had been ‘7 bad habits’ and ‘From bad to worse’?

 

Start with business process optimization

If your company wants to start a harmonization of processes then the business process optimization is the place to start. And let it be said. There is no real possibility to shortcut the warm up session – and this is the best investment you can make in a management consulting process consultant. You need to evaluate the readiness and chance to succeed and to get an grip on what it will take. Moreover you will need to quantify the business case based on the business benefits for your organization. I will note however that this way of working is many times easier than a “functions and features approach”.

And by the way, having received hundreds of request for proposals based on various models, if the same work was made through a business process optimization, the end users would receive significant more value for money. The proof is simple: Where do you want to invest: in your business or in technology?

The five steps are to optimizing your processes:

  • Establish business priorities
  • Functional cross-region review of ‘as is’ processes.
  • Develop skeleton ‘to be’ processes
  • Functional review to determine ‘to be’ processes
  • Functional processes confirmed

 

It can be challenging to make the decision for a full BPO process, and there is often a need to align expectations around both the process and the scoping. This is what I call the “warm up phase”.

A warm up can be done in few days and with your BPO partner and you will be able to get valuable inspiration and benefits concerning:

  • Project scoping
  • Scope for Business Process Optimization
  • Best practice for creating business value through ERP

Actually, a warm up session secures a common frame of reference for the ERP project and buy-in for the project approach.

What I’ve learned over many years is that many companies have difficulties in defining ERP processes. Even ‘as is’ processes can be difficult for people to document with the right quality, and often there is not enough understanding of the BPO process itself, so it can be difficult to motivate the people who need to document ‘as is’ and ‘to be’ processes.

A warm up process is also a sanity check – ‘get to know fast’ is a good phrase to describe it. In todays global market, a lot of companies have a wish to harmonize processes, and many of these underestimate the effort required to change existing processes – especially when linked to an already comprehensive ERP implementation.

How you benefit?

The main benefits from doing a warm up process instead of just committing to the entire five-step BPO model are:

  • Creating a common frame of reference enables fast and efficient ERP project delivery
  • Foundation for business and technology bridging
  • Initial alignment of expectations across business and IT
  • A kick-start of the project scoping
  • A template for the BPO project approach and outline of next steps

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