Successful ERP implementations are not only driven by software but also by business processes.  Many companies make a costly error during their ERP system implementation – they assume that the new system will make their processes easier to perform, without first examining their actual processes. Business process reengineering and improvement is one of the most critical yet often forgotten aspects of implementation projects.  Having clearly defined current and future state business processes documentation is a distinct advantage that reduces the time, effort and cost associated with business management software initiatives. You’ll need to have a clear understanding of where you are, and where you want your business to be in the future before you can start planning your ERP journey.

What is Business Process Mapping

Business Process Mapping is a framework used to create visual representations of business processes.  Business process maps reveal the relationship between operational steps and inputs to produce an end-product or service.  These documents are focused on what a business does, why it operates in that way, what the standard is for success, who is responsible, and when and where different steps will occur.  The main purpose of business process mapping is to promote transparency and allow organizations to improve upon their current practices by creating a clear, detailed visual representation of workflows.

Most ERP vendors argue that defining future state business processes are the key to ERP success, while organizational change and business process consultants often argue that defining current state business processes is the better option.  One will give you a clear understanding of how your business currently operates, the other will reveal how it “should be” operating.  The truth is, the best business process strategies involve both a current state and future state analysis to clearly define how a new ERP system can get them from point A to point B and to help anticipate the impacts of the new system moving forward.

Define Current State Business Processes

The first step in determining where you want to be is to understand where you are. Knowing how your business currently operates and having business practices clearly documented is important for several reasons.  Documenting your current state business processes often reveals inefficiencies and opportunities for improvement, as well as unique differentiating factors that give your organization an advantage over competitors.

Process maps should be created for each function that can be summarized up to the primary ERP-related process flows as they are being performed currently.  These process maps should be created at the functional level to assure that any sub-processes are also covered.  Within each functional area, each step isolates an individual process into a workflow diagram for a clear depiction of a process or series of parallel processes.

Define Future State Business Processes

Once you have visual representation of the current processes, you can identify delays, bottlenecks, and other inefficiencies. Then, you can create a future state process map that eliminates these issues. It’s also important to understand the future direction of the business and any additional business capabilities required for the foreseeable future. These considerations should also be reflected in the future state documentation.  As is the case with all stages of business process reengineering, future state process mapping should be performed at a technology-agnostic level that does not yet address how processes will be completed within a specific ERP system.

A future state map focuses on what SHOULD happen in a process by answering the following questions:

  1. Who should perform each task?
  2. What should be the specific tasks?
  3. What should be the decision points?
  4. Who is the customer(s)?
  5. Who are the stakeholders?
  6. How should we resolve the issues with the current process?

Evaluate Technology Requirements to Guide ERP Software Selection

With the current and future process maps in hand, you can finally start to understand the future direction of the business and the technology capabilities required in a new ERP system to support this vision.  Technology requirements needed to achieve the future state should be ranked by priority/business value and compared to various ERP vendor offerings to find a solution that best covers all of your organization’s current and future needs.  From there, you can consider integration, customization, and configuration requirements to fine-tune the system to your unique needs.

Additional Benefits of Business Process Mapping

In addition to helping with ERP system selection, process mapping is beneficial to nearly every stage of an ERP implementation project.  Use your reengineered business processes as the foundation for your decision making, organizational change management, executive buy-in, and training strategy. Once business process changes have been defined and documented they should serve as a baseline and point of reference for the entire project, including measuring progress and results after go-live.

Clearly defined business processes can promote transparency, shared ownership, collaboration, and communication as well as streamline communications, standardize system design, and serve as excellent training materials. The upfront costs of putting together comprehensive process documentation will not outweigh the long-term benefits.

Need help mapping your business processes? Contact us to discuss your ERP journey with one of our consultants today.

This post is an excerpt from our ERP Buyer’s Guide which is available now for download.

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