Organizations often face the challenging situation where its existing ERP software is not adequately addressing the needs of the business. It may be because the business has outgrown its ERP system or the technology is not sufficiently extendable due to the age of the ERP platform.
As the search for a new ERP system begins, what is often ignored is the mapping of business processes and developing an understanding of how the various processes connect. It is the development of the business process map that should be a key driver for the evaluation of ERP alternatives. This article will discuss the advantages to using business process mapping as a core component of ERP selection and implementation.
Do you know how your business operates?
Most business leaders will say “yes” to that question, however, the flows and processes often have not been fully and clearly articulated and/or documented. As ERP selection and implementation occurs, a big challenge is making sure that complete requirements have been shared with a prospective ERP vendor. When that has not been provided, it is not uncommon for an ERP implementation to be derailed or delayed because specific requirements were not clearly defined from the outset.
Litmus Test (The “How and Why”)
A critical litmus test an organization should address is whether it can show an external party (or even its own employees) documentation of how an existing ERP system works. This would include the specific steps followed to accomplish daily/monthly/yearly tasks. Additionally, this test should also address whether there is an understanding of why the system works that way. In other words, the why includes the businesses reasons the task needs to be performed and the affect it has on the rest of the system. The reality is that most organizations can’t pass these tests.
The Process – It Starts with the Customer
Business process mapping should be customer-centric as that is the source of revenue. Process issues surrounding the customer may include:
- Lead management – how do you first meet or engage with customers?
- Customer experience – how does a customer come on board and how are they managed?
- Order management – how are orders created, placed and fulfilled?
- Customer support – what information is required to responsively and properly address customer needs and inquiries?
- Invoicing – what information needs to be pulled together so that invoices can be sent (and ultimately paid)?
- Inventory management – what goods are required to meet customer demand and what are optimal stocking levels?
Customer-centric mapping applies to both tangible good businesses (supply chain based) as well as service-based professional organizations. No business escapes the need to have order-to, lead to cash and procure to pay cycles.
How to conduct business process mapping
Business process mapping consumes a significant amount of resources. But, the process is worthwhile as an organization will uncover many requirements and complexities about its business that need to be considered in ERP selection. Organizations can make better choices on the frontend as opposed to costly retrofits or customizations on the backend.
While most organizations have a deep understanding of the way its business operates, there is only a small portion that have the talent or experience to skillfully map and document its specific processes. Effective mapping is best conducted by “been-there, done that” professionals that bring a broad perspective to the desired outcomes. The process often entails root cause analysis type diagrams and, unless an organization is steeped in process management, the skills required to perform the evaluation may not reside internally.
An organization should first determine if it possess the skills (and time) to manage the process. A key component is that the person/team which performs the process can be objective and that they do not favor one side of the business where their own expertise exists. Additionally, it is important that the focus is not completely internal and that outside perspectives are integrated into the evaluation. There are many companies that do this on a regular basis and can help to create business process documentation. In evaluating external resources to perform business process mapping, organizations should seek:
- Deep industry-specific expertise,
- Strong references, and
- Cultural fit to an organization’s personality and people.
“Slowing down to go fast”
There’s value in embracing the notion of “slowing down in order to go fast.” We are often best served when we take the time to gather and process information versus rushing to what may appear to be an expedient solution. When we start slow in the beginning it is done so to make sure that we can go fast toward the end. And, part of that “slow at the beginning” is mapping internal business processes. In the absence of developing a clear set of requirements, the ability of an ERP project to be completed on time, within budget and on scope may be jeopardized.
By investing to be prepared and having documentation in place, organizations can more easily and efficiently assess ERP suppliers. Furthermore, organizations can have a better grasp on required customizations which can often slow down and/or add significant cost to implementation. Mapping and documenting the processes can save a significant amount of time when an organization implements a new ERP product.