4 Reasons To Reengineer Business Processes Before Implementing ERP
Business Process Reengineering is an important method that redesigns existing business process to improve productivity, quality, and cycle time. This revamping process allows the management in any organization to rethink their existing process before moving to a more advanced level to streamline and automate their enterprise processes via an ERP implementation. Let’s look at few other reasons why this is important.
1. Maintain, or gain, competitive advantage
Your current business system may be dealing with a complicated process of managing tons of manual work, spreadsheets, and other transactions on paper. However this existing business process has been giving you a competitive edge from competitors for a long time. If you directly go for an ERP implementation, it may not work the best way. Therefore, business process reengineering before ERP implementation will support you to keep the existing unique selling propositions (USP).
2. Lean Six Sigma is important
Best practices are set of processes that worked for many companies and may work for you as well or may not! It is a blanket set of processes which should be followed but a few unique players should also look beyond what has been pre-decided through best practices. Lean six sigma is a branch of tools that can be used to explain own set of best practices in any organization. It also reflects organization’s efficiencies along with competitive advantages.
Five phases of six sigma are:
- Outline the problem
- Measure the problem
- Recognize the cause of the problem
- Implement and verify the solution
- Maintain the solution
Thus, lean six sigma helps in identifying the root cause challenges and providing world-class solutions but it needs out-of-box thinking. Lean six sigma is an important part of business process reengineering and it can provide best possible help to understand the situations before ERP is implemented.
3. Deep understanding of business processes
It is crucial to slowly familiarize employees with the new platform long before the ERP implementation process begins. While a new ERP system can automate the entire business process, many of the tools and features can be rolled out independently. When it comes to change management, studies have showed it’s best if employees have a clear understanding about the business process improvement before automating the system.
4. Escape ‘paving the cowpath’ trick
Defining business process improvement prior to the implementation of ERP is a significant step. Companies that fail to redefine their existing business process prefer to go for simple automation with ERP implementation. They often may end up customizing the software to cope up with their broken processes. As a result, the entire process becomes costly with expensive technical consultancy sessions.
On the other hand, organizations that go for a planned business process reengineering before ERP implementation can save lot of extra cost and resources. They should also allow their technical team to spend time on best configuration practices to meet the industry standards.
Business process reengineering provides a realistic understanding of the existing process and helps organizations to go for a successful ERP implementation by cutting extra cost and pacing the process at the same time. Employees can also easily embrace the new ERP system after the process reengineering is done.