Why is business process optimisation important to ERP Implementation?
Business Process Management is described by change management expert and author Theodore Panagacos as “a field in operations management that focuses on improving corporate performance by managing and optimising a company’s business processes”.
You may have heard business process management being referred to as change management or business process optimisation. Whatever you call it, it’s vital you don’t ignore it – if you want a successful ERP implementation.
Many businesses assume that implementing an ERP system is the answer to their business prayers. Yes, a decent ERP system that is right for your business can help streamline and automate your key business processes. But are those underlying processes decent to start with? And have you thought about exactly what you want to achieve?
A gym membership doesn’t a David Beckham body make
Think of it like trying to get in shape. Many people rush to join a gym in January or buy into the latest fad diet, convinced that they’ve got the magic answer. The answer to what, though? The success of the exercise and diet will all depend on what you want to achieve—and your plan needs to be realistic with the resources you have available and the state of your health to start with.
It’s imperative you look at any underlying issues before you get started. Issues that can (and will) prevent the best results. Otherwise you’ll be wasting a lot of time and money on that gym membership for very little gain.
Maximise your potential
In much the same way, change management helps businesses realise their full potential. By analysing what the business wants to achieve, the correct business processes can then be implemented to match this—bearing in mind any resources, time and personnel issues.
Lots of businesses don’t understand all of the available possibilities and how best to maximise their return on investment with ERP investment. So you need to work with someone with specific sector experience, as well as the product experience. This ensures you can quickly identify the best new processes to assist you and address what issues could hold you back.
The Cost of Complacency in ERP Implementation
In the same way that lots of people give up on their resolution to hit the gym and “get healthy” because they feel they’re getting little to no results, many people also give up on their ERP systems when things aren’t working as they hoped. Which is understandable, but a big mistake.
Mint Jutras’ 2015 report, “The Cost of Complacency” showed what a large difference there is between “world-class ERP implementation” and the average implementation. For world-class ERP implementations, costs were reduced by 19% to 21% across each of the following five areas: operating, admin, inventory, obsolete inventory and cycle time. Compared to this, average ERP implementations achieved only 5%, 8%, 9%, 9% and 8% respectively.
Can you really afford to leave those extra costs savings at the door?
The “world-class” ERP implementations are simply where those responsible have undertaken solid business process management and got it right before any software is implemented—rather than just rushing in with ERP software in the hope it’ll solve all their problems.
You’ve heard the phrase “lifestyle choice” when it comes to getting in shape. Those that manage to stay in shape are able to adapt to new changes – like a change of job, meals out or injuries. Those with the most envious beach bodies don’t rest on their laurels after they kick-start their fitness journey – they look at ways to tweak it to make it even better now that their bodies have adapted and got fitter.
In the same way, you need to commit to a lifetime ERP implementation. A great ERP implementation will get you results as quickly and as painlessly as possible. The best software consultants will instil in you a continual commitment to stay agile and keep improving your business – and be there with you every step of the way to support you with their expertise and vast sector knowledge in ongoing change management.
Business process management is key to providing a solid foundation, but to find out what else you need for a world-class ERP implementation, download our guide below.