Business Process Management and ERP Implementation

One common error businesses make during ERP implementation and selection is in their approach to business process management (BPM). According to January Paulk, Director of Organizational Change and Business Process Management Services at Panorama Consulting Solutions, business process management should be the foundation for your entire ERP selection and implementation initiative.

We recently sat in on a Panorama Consulting webinar entitled “Business Process Reengineering: A Key Component of ERP ROI,” which discussed the benefits of BPM as an extremely important component of the ERP selection process. Paulk gives an overview of how BPM fits into ERP implementation, how Lean Six Sigma and other BPM best practices can help make ERP implementations more successful, and debunks several common myths surrounding BPM and the project lifecycle.

Throughout our years of experience with ERP development and implementation here at Reflex, if we sign a new client that has not performed BPM, we make sure that this is one of the first steps we take the client through. We stand by our Reflex ERP as one of the best mid-tier ERP solutions in the marketplace but despite all of our modern product features and functions, we know that BPM is crucial to ensuring the implementation achieves all the desired results and critical success factors.

BPM is a huge value add and companies must take the time to do it right, which is why it should always be performed prior to or during the software selection phase.

“If you identify those processes that need to be improved, you can evaluate and select software based on those process flows,” says Paulk in the webinar. This helps to avoid selecting software that will end up being unable to support the key business processes and thus require a heavy amount of software customization.

Image courtesy of Panorama Consulting Solutions

According to the webinar, BPM is important to any ERP implementation because it identifies process and organizational changes, highlights organizational change management issues, and helps to improve the software selection process by focusing on the needs of the company, rather than on the features in the software package.

By taking a hands-on approach to BPM from the very beginning, businesses can narrow down exactly what they need from a software solution and make an informed decision during the selection phase.

“BPM allows you to document requirements before the process and then evaluate how vendors can meet specific requirements,” says Paulk. “Are they going to meet them out-of-the-box?”

By prioritizing BPM during ERP selection and implementation, businesses can reduce the overall risk to the project, increase the return on investment, and ensure that key differentiating business processes (processes that make the business unique) are not lost during implementation. Here at Reflex, we maintain the importance of selecting a software package that is the best fit to a business’s requirements, rather than changing processes in the business to align to the software. As Paulk states, this might mean that a minimal amount of customization will be required, but it’s important to retain the aspects of your business that make you unique.

“A lot of companies just want to minimize the amount of customization,” says Paulk. “There’s always a risk with not doing any customization. You could potentially lose something that makes you unique and gives you an edge over your competitors.” However, too much customization can be costly. The key is to find a software package that only requires minimal customization to meet your needs, to avoid drastically increased costs and longer implementation times.

Focusing on business process mapping from the beginning of the ERP selection process means that companies can identify pain points right off the bat. By starting at a high level and understanding the main parts of the business’s key process, companies can then drill down and identify the root causes of any pain points. The webinar separates this into three categories: business process improvement, which improves process and removes waste; business process optimization, which looks at ultimate efficiency and gives greater business value; and business process re-engineering, which requires a radical change to fix broken processes from scratch.

Image courtesy of Panorama Consulting Solutions

Paulk also debunks several urban legends around ERP implementation, namely the belief that you can’t address business process management without knowing the software and the belief that pre-configured ERP systems negate the need for business process management. As Paulk says, “the most successful ERP implementations address business processes prior to selecting and implementing their ERP systems.”

Read more about Panorama’s approach to business process reengineering here.

Visit the Panorama Consulting website here.

Learn more about the next generation Reflex ERP here.