Is process re-engineering required before you start an ERP Implementation?
By Jag - June 28, 2013
In many of my ERP implementation projects, I have seen and even involved in doing a process re-engineering prior to starting an ERP implementation. Many companies do this basically to set right the existing process or lean out the current complicated process. The idea being not to bring the current redundant steps or procedures to the new process that would involve ERP. This do sound very reasonable thing to do and the concept quickly caught as a best practice as a pre-implementation activity. Re-engineering experts were hired to assist them in identifying their existing process bottlenecks, and provide them with a value stream maps that would remove all these reduntant steps and bring in process improvement.
While all these sounds very right, I am personally not convinced with this approach as a pre-implemenation activity and here are the reasons why..
Future Process Maps
What ever may be the existing process, during the ERP implementation, the consultants comeup with the future process documents which is not the same as the leaned or improved process. The ERP consultants still have to discussion with the business users to understand their existing process and chart out the future process taking into consideration the ERP application functionalities and process. Since ultimately the users will have to work in the ERP application, doing a re-engineering activity without considering the process steps within the ERP application does not make any meaning. One of the prime flou that I have seen is the customers using pure re-engineering resources who do not have knowledge of the ERP system that they are planning to implement. They conduct workout sessions and comeup with value stream maps in isolations of the ERP application. Lot of time and energy is spent on this activity which will anyway again be re-looked when the ERP implementations gets underway. So this raises the following questions
- Why not involve the ERP consultants ( may be along with the re-engineering consultants), in the entire activity of coming up with the leaned or improved process?
- Instead of concentrating too much on the ASIS process, why can't they look at what they want, the future process. ( which will automatically be the improved process from the existing )?
- Why spend too much money and energy on a pre-implementation, re-engineering activity? Why can't the re-engineering activity be clubbed with the future process design phase of the ERP implementation itself ?
Having been little negative on the ERP pre-implementation re-engineering activity, I would like to also mention some specific areas where value stream maps will be useful.
- Where the business is aware of a complicated process which they need to streamline
- Where the busniess is aware of reduntant activities that they think should be removed
- Where there is a process bottleneck that can be avoided.
Re-engineering can be specifically targeted on the above which are non-ERP related and which may be needed even after ERP is implemented. For example, if the goods are delivered to the customer site, but it takes 2-3 days to confirm the delivery of the goods to the billing team ( due to the remote customer locations) and thus resulting in delay in revenue recognition or billing. The process step could be that the truck driver faxes the delivery note with the customer signature to the billing team after the goods are delivered. The availability of fax facility may not be near the remote customer location and thus the delay. The re-engineered process may be to provide the truck driver with an handheld device that sends immediate information of the delivery directly to the billing team thus saving the valuable 2-3 days of delay in revenue recognition or billing to the customer.
In the above scenario, there was a problem and the process is now improved (re-engineered) by issuing the hand-held device to the truck driver. The solution would be the same whether ERP is implemented or not. Such scenarios really qualifies to be a candidate for re-engineering prior to ERP implementation.
Conclusion
Doing general re-engineering activity prior to starting any ERP implementation is more a waste of time and money, since the processes will anyway be re-looked to suite the ERP oriented steps and procedures. Any process that is independent and will not change with ERP system that need to be re-engineered qualifies as a candidate to be looked into pre-implementation.
I would appreciate your views and feedbacks on the topic.
I would appreciate your views and feedbacks on the topic.
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