The thrill and excitement of the possibility of changing your old enterprise software solution with one of the hip new solutions on the market can sometimes lead to the irrational perception that just about every one of the business problems you have faced over the past few years will be solved with this new purchase. Especially, seeing as such changes can easily cost medium sized organisation to spend at least $1 Million to implement.
However, no matter how expensive, how new and how much a solution is marketed, if it does not align with your business needs, it will not work for your organisation. Furthermore, if the problems you are facing are not directly linked to the system you use, then those problems will not magically be solved when a new system arrives. Finally, if end users do not transition to the new ways of working in the new system, then your organisation will take longer to reap the benefits of the change. This is why it is important to have a firm understanding of how your business operates and to identify how your organisation wants to operate in the future by engaging the right people within your organisation. The best way to do this is through BPM.
Business Process Mapping (BPM) is not a new concept, in fact, it has been used to document processes since it’s formalisation almost a century ago. However, most organisations still do not fully utilise this business analysis tool, especially in respect to identifying and understanding their business requirements and how the new ERP or Enterprise Software solution will meet their needs. It can also be used to assess if a new system is really what the organisation needs, or it can help to identify the weeknesses in the existing processes, so that improvements can be made to implement good practices. This article will look at why Solution Minds advises clients to conduct a BPM project prior to Systems Selection and Implementation.
Why Do BPM before ERP Selection
1. To Understand What Your Organisation Currently Does
What does your organisation do? How does it do this? Who does this? What tools and systems do they use? Is this documented?
A study conducted by TNS Global in 2015 of Private and Public organisations in Australia, New Zealand and the USA, found that 61% of the organisations surveyed did not have documented business processes.
Furthermore, 58% of organisations indicated that they believed that their currently documented processes are not up to date.
One of the key reasons for implementing a new solution is to improve operations of your business, however it is difficult to think of what you want to improve, if you do not understand how you currently do things.
Furthermore, it is hard to measure improvements after implementation, if you do not have a benchmark measure to compare against.
For these reasons, Solution Minds advises that prior to any solution selection project or implementation, that processes are documented and up-to-date.
2. To Understand What Your Organisation Wants to Change
When you have a clear understanding of how things are done in your business, you will be able to better identify the bottlenecks, pain points and key breakdowns in your processes and which of these are because of the current ERP System and which are not.
Often, issues found during BPM are not directly linked to the system used and are in fact operational inefficiencies due to many factors including the adoption of legacy processes/procedures from the past, that now serve no purpose. As such, a change in system will not fix these. Fortunately, in our experience, many of these issues can be tackled in a relatively short time frame (Look out for our Quick Wins Paper or talk to Us About Quick Wins for more information).
Furthermore, in a BPM project you will be able to highlight what competitive strengths and weaknesses your business experiences are a direct result of your processes.
You must understand what it is your organisation wants to change, along with the new system and what it does not or cannot change because it is impacts a competitive advantage of your business. It may come to your surprise, that it is not uncommon to see organisations implement ERP’s without realising that the imposed change actually negatively impacts a competitive advantage they once had.
3. To Highlight How Your Organisation Wants to Do things in the Future
The “deadliest sin” that Organisation believe they made when starting an ERP Project according to a poll conducted by Panorama, was that they believed they insufficiently defined business processes and workflows. In 2015, over 61% of organisations did not have as is let alone future state business processes documented. It is important to gather a clear consensus on how your organisation wants to operate in the future.
If an organisation is unaware of how it wants to operate, then it is increasingly hard to select which system would best suit the needs of that organisation. As stated earlier, organisations may choose to implement standard solutions without realising that the system imposed way of doing things may negatively impact on a competitive advantage of their business. As such it is important to develop, could-be process maps to highlight how the organisation wants to do things in the future regardless of what system is used.
However, as organisation only tend to change systems every 5 – 10 years, many organisations find that they cannot build realistic could-be maps because they are not aware of what systems are capable of doing now. This is where, external independent advice from ERP specialists such as Solution Minds is valuable.
4. To Help Your Business End Users Take Ownership of the Changing Processes and Solution
You have probably heard it a million times but let us reiterate, even if you think you have the best processes documented and the slickest system, if your organisation’s people are not engaged and willing to transition then your risk of failure is very high. A study by Prosci looking at 822 Organisation worldwide in 2014 found that 86% of projects with poor Change Management failed to meet their objectives.
One of the key components of a successful BPM project is to engage the actual system users throughout in order to get the right level of detail, therefore involving them in the process of adopting a new system or ways of working right from the start. A BPM project engages individuals from all areas of the business on each level. For example, the reason end users or a representative of end users is involved during this process is because they deliver the most insightful information about how things are currently done and how they could improve from an operational perspective. Similarly, Supervisors, Management and Middle management are involved to give insights into planning, resourcing and reporting processes.
In involving these key groups of users early, they are involved in defining the answers to the key questions often asked by resistant employees. Why are we changing? What is changing? How is it changing? What does that mean for me and my processes? By taking them along the journey the organisation reduces the risk of resistance and as studies have shown increases the motivation of employees by giving them ownership of the change.
5. To Ensure that Key Process Requirements are part of the Selection Criteria
The primary reason for doing a BPM project and analysing processes relating to system flows is to ensure that no major process requirements are left out of the system selection criteria. A paper by the University of Wollongong’s Computer Science Department in 2011, stated the importance of using a framework to align business processes to strategic decisions in order to better fulfil strategic goals. Given the financial and operational impact of implementing a new system solution, one would consider that such a decision be strategically driven and not merely a reactive or a gut feel process.
The SM Selection Methodology uses such a framework. The two most important aspects of the methodology are functional and technical requirements. The documented requirements that come from the BPM project are a major input into defining the functional requirements set that falls part of the selection criteria. The benefit of using the BPM to draw out these requirements is because it ensures that key process requirements are not missed out. Therefore, reducing the risk of selecting a system that does not fit the operational needs of the organisation.
6. To Help Reduce Implementation Costs
“Keep it standard, no modifications” is a sentiment shared by just about everyone who wants to implement a new system solution. This is because an increase in system customisation increases the complexity of system implementation and risk of difficulty in updating in the future, which to the organisation implementing an ERP means an increase in costs. Unfortunately, according to a study by Panaroma in 2015 93% of organisations customised their solutions. Although most organizations begin their ERP initiatives with the expectation that they use the “vanilla” software, organizations are clearly still making changes to the way the software was intended to be used. This may also partially explain the increasing failure rate among ERP implementations over the past few years.
Organisations that do not do a detailed selection and BPM project, often find latter in the project that the solution they are implementing does not fully support key processes and therefore need to be customised. That being said, there is very little guarantee that an organisation will implement a completely standard solution in the first place. In fact, the same study found that only 23% of organisations did this. In the past decade SM has noted that the majority of clients will inevitably need some form of customisation. However, the key to reducing implementation costs is to ensure that these customisations are kept minimal and only occur for the key processes that lead to a competitive advantage and not for the sake of doing everything exactly the same as they currently do it.
By engaging in a BPM project prior to selection, these key requirements are prioritised and documented and can be given to the shortlisted solution providers to consider and therefore increase the likeliness of securing a fixed price arrangement and reducing the risk of the costly inclusion of change requests during implementation to customise standard processes for missed requirements.
The Solution Minds Approach to BPM – mapping the route toward ERP Success
This is why at Solution Minds our experienced Consultants follow a robust BPMI methodology and approach to map out and analyse your current processes to understand, document and agree upon issues and opportunities for improvement, provide recommendations for possible future state processes and advise on the next steps required for system selection.
Want to know more…
Director – Solution Minds
Mob: +61 400 729 559