ERP

The business environment is changing rapidly. The mere approach of deploying an ERP system may not help an organisation achieve its mission. Automation and re-engineering of business processes is key for the successful implementation of an ERP system. An organisation can either re-engineer its business processes before implementing an ERP software or directly implement the ERP software and use its in-built business processes and avoid re-engineering.

In the first option of re-engineering business processes before implementing the ERP system, the organisation needs to analyse the current processes, identify activities that don’t add value and redesign the processes to create value for their customers and employees. Then the ERP system can be implemented or modified as per the changed business process maps. In this case, employees can develop a good sense of process orientation and ownership, while end customers will feel the value addition in the services delivered by the organisation. The implemented ERP system would be customised in line with the organisation’s new structure, culture, existing IT resources and employee needs. Change management plays a key role in the success of such a project. Keen attention must be paid in choosing the right ERP system.

The second option of implementing an ERP package essentially involves adopting an ERP system with minimum deviation from the standard settings. All the processes in a company must conform to the ERP model and the organisation must change its current work practices and swap to what the ERP system offers. This approach of implementation offers world-class and effective processes with built-in measures and controls, and is likely to be installed quickly. But the key drawback is that unless the right ERP is chosen with best in class business workflows, the current inefficiencies of the organisation might not be resolved. The employees must have good understanding of their internal customer needs or current processes, and these processes must be well defined and documented. Otherwise it is quite possible that while selecting the standard processes from the ERP package, employees may not be able to perceive the difficulties likely to be encountered during the implementation stage. Employees would lack process ownership and orientation. Other than technical issues such as organisation structure, culture, lack of involvement of people etc., it can lead to major implementation difficulties, and the complete benefits of a standard ERP package may not be achieved. It may lead to a situation where the organisation may have to again reengineer its processes. This becomes a very expensive affair.

There is also an argument of re-engineering business processes during implementation of an ERP system. However, this is not considered to be a practical option and is likely to cause maximum disruption to existing work. One must remember that during BPR and ERP initiatives, routine work has to be performed and customers need to be served. BPR and ERP implementation go hand in hand. To successfully transform an organisation, careful consideration must be paid to all aspects of the combined approach.

Submitted by –
Mathan Sathyanarayanan
Head of Business Consulting Services – Orion Business Unit, 3i Infotech Limited

ERP