One of the most contentious issues in the world of ERP and IT is how much attention to give to current state and future state ERP business processes. Opinions on the issue run the whole spectrum on how this should be addressed; some people feel that companies should let their ERP systems dictate what new processes will be, while others feel that current state and future state processes should be documented and analyzed in detail. Many people, including myself, feel that the approach should fall somewhere in between.
It is helpful to break down the issues and look at each individual aspect of business processes to decide which approach is best for your company and your IT or ERP implementation.
Get Clear On Current State Business Processes
In my experiences with clients implementing ERP, IT, or any other large business change initiative, you need to devote a lot of attention to defining current business processes. The benefits of doing so are three-fold:
- Get alignment amongst key stakeholders about how things currently operate.
More often than not, especially in very large organizations, many managers and key stakeholders do not have a big-picture view of what other parts of the organization are doing. Documenting current state business processes helps develop clarity on what is working well and what is broken with the current business processes.
- Fill the gaps between current and future states.
It helps define how employees are doing their work today, which will ultimately help define the gaps between the current and future states. This is critical when it comes to organizational change management and training initiatives later on in the project.
- Identify operational pain points.
It helps determine the key challenges, and therefore the to-be processes and business requirements during the ERP software implementation process.
This is not to say, however, that companies should spend an excessive amount of time documenting or over-analyzing current processes. At a minimum, organizations should develop level 1 detail around their current processes.
Determine Future State Business Processes
This area is very important as well. In order to develop the appropriate business requirements and decide what is most effective for your business, you need to understand how you want your business processes to look in the future. Doing so provides four key benefits:
- Get a better understanding of your future operational model
It helps you define your business processes independent of software. This allows you to think out of the box and look for opportunities to score big wins by leveraging IT as a tool to enable measurable business improvements. If you skip this step, you are more likely to be influenced by sales messages instead of functional fit.
- Identify gaps between current and future roles
In conjunction with the current state processes, it helps you determine future jobs, roles, and responsibilities. This is critical from an organizational change management perspective.
- Define KPIs to drive improvements
By determining the key performance indicators you want to focus on, you can drive accountability so that you accelerate growth. With new processes come new responsibilities and opportunities for improvement, so you need performance measures to enable this.
- Prioritize key projects
It helps prioritize customization, integration, and report-writing needs after the software is implemented. Without this understanding of where you want your organization to go from an operational perspective, it is very difficult to determine where customization and additional development is appropriate.
In short, I have found it helpful to view the business process aspects of your IT projects independent of the software itself. Your future strategic direction and business processes should drive the ERP project, not the other way around.
If you would like help determining your new business processes, sign up for a free business process assessment and our team at Concentrus will work with you to identify gaps and develop a solution that works for you.