6 Tips for Process Optimisation

ERP - Publications Process Management By: Dr. Harald Dreher - Apr 6, 2021

Profitieren Sie von 3 Jahrzehnten Erfahrung in IT-Strategie, Digitalisierung, ERP-Beratung und Prozessoptimierung.

Companies that have set themselves the goal of introducing an ERP system usually have their focus on the introduction of the software. This is not a competitive disadvantage at first, but the companies are giving away potential to improve their competitiveness. Therefore, we have compiled tips for process optimisation from practice for practice.

Companies that have set themselves the goal of introducing an ERP system usually have their focus on the introduction of the software. This is not a competitive disadvantage at first, but the companies are giving away potential to improve their competitiveness. Therefore, we have compiled tips for process optimisation from practice for practice.


Directly Implementable Pointers for Success ...

It is not about implementing an ERP system as quickly as possible, but about designing efficient business processes to beat the competition. In the context of digitalisation and digital transformation, this is an important approach to improving competitiveness. It is not a matter of introducing an ERP system in a sprint, but rather the ability to put the customer and their expectations at the centre of the business processes in the context of digitalisation. This puts the focus on what is important - to increase the customer base in order to increase turnover and, with lean, efficient processes, to increase earnings. From our experience, we have compiled six points that are important for improving competitiveness through process optimisation (business process reengineering) as a permanent task for a company and especially before the selection and introduction of an ERP system.



Tip 1: Take sufficient time, reserve an adequate budget and provide the necessary resources.

Business process optimisation or business process re-engineering takes time. It has probably taken several years for your current company and organisation to define the current processes and procedures as they are. But today's problem is that the environment in some industries and competitive situations is changing so fast that a company hardly has time to adapt quickly enough. Just think of the major challenges facing the automotive industry on the way from the combustion engine to the electric motor or other alternative drive technologies. For this very reason, it is an enormous challenge to implement future customer requirements into one's own business processes quickly enough. This is especially true when the value chain (the supply chain) integrates many participants. It may be that a business process analysis and subsequent business process optimisation takes longer than a technical configuration or the implementation including testing of a new ERP software.   If you have facts and figures from companies in the same industry, of similar size or with similar products and services, benchmarking can help you set goals and expectations for your project.


Tip 2: Define your business processes before you choose your ERP softwareFor Process Optimisation

Today's ERP systems are now very powerful and have undergone several generations of improvements in their development. However, this also means that modern ERP software is so flexible that it has several options for executing even simple, rudimentary business processes in several workflow variants. If these business processes are not defined before implementation, they are defined during implementation. This inevitably leads to a discussion process and to a slowing down of your project, because cooperation usually changes within the framework of the organisational structure and workflow.

However, changes in processes usually have a draft and design phase behind them before they can be implemented. Having to do this during an implementation increases the complexity of an ERP introduction enormously.

Irrespective of this, the opportunity for process optimisation in the context of digitising processes is usually not realised because the restrictions of the software dominate the process design. The reverse would be much better, as it gives the company the chance to expand its own USP and improve its competitiveness. This can also be lost with the introduction of standard ERP software functionality.


Tip 3: Improve your business processes before choosing ERP software

Just as you should define the processes before selecting software, it is important to improve those processes that can be optimised without new software. Also use the time to check whether the organisational model is in line with your long-term business strategy. Waiting until the last minute to start process optimisation will usually fail due to lack of resources and time. Often, the only option is to keep the existing processes and postpone their optimisation until later. However, this means giving away a competitive advantage that is related to the term - speed. In parallel, duplication of effort is necessary, because the configuration of an ERP system will then be based on the existing processes instead of the ones that are needed.

Not all business processes have the same weighting. The usually large number of business processes that need to be recorded, documented, analysed and improved pose great challenges for those involved. It is now crucial that you and your team realise that it may make sense to initially focus only on those processes that have competitive differentiators (USP processes). These business processes should form the basis of which ERP software can be considered for your company.

Do not be put off by general features or best practice presentations of ERP software. The key is that if you have competitive advantages in production, then the software must support these processes in your focus. This is equally true for competitive advantages in logistics, or service, or trading products. Software must be selected precisely for these competitive advantages of your company. Under no circumstances should the number of functions mapped in Excel lists or Excel-like ERP specifications be the selection criterion.



Tip 4: Integrate change management initiatives when optimising business processes

One of the main reasons for project extensions in process optimisation is resistance to change. Since people are usually sceptical about change or even reject it, it is a challenge for the project management to convince employees of change and to win them over as advocates of change. Those affected must - especially in the environment of digital transformation - develop an understanding for the process and support the implementation of a new business process. It is important that the delta between the existing and the new process becomes clear. This makes it easier for those affected to understand their future role in the context of training and information. In this process, the support of the management (the project sponsor) is enormously important to ensure that the employees accept the new procedures and processes before they are transferred to live operation.



Tip 5: Integrate process quality analyses into your business processes

More and more ERP providers have innovative solutions within the framework of business intelligence or trend calculations (predictive analytics) as an integrative component or as a bought-in module. These systems are able to create usable information from large, seemingly unusable amounts of data with the help of artificial intelligence (AI) and statistics. However, harnessing this data is key to gaining competitive advantage with these tools. Therefore, it makes sense to look into these possibilities in order to achieve a continuous improvement of the processes to a normal business transaction. One of the charms of this solution is that there is a possibility that your competitors are not yet using these tools and you can therefore generate a competitive advantage by using AI because your company is using and can use these innovative technologies. In the context of digitisation and ERP implementation, this is a point for improving competitiveness that should not be neglected. 


Tip 6: Measure your results and improve them step by step

A new ERP system has been implemented. Do not sit back now under any circumstances, but measure the process progress 3 or 6 months after the commissioning of a new ERP software and the associated new processes. This includes, after the users have become accustomed to a new software and processes, that the originally defined goals are compared with reality. This can include lead times, a common master data pool, process flows, approval interfaces and many other customer processes that are monitored as part of a continuous measurement. This allows you to make step-by-step optimisations without questioning the system. Poor configuration of the software will be noticed through this process tracking and you can then make corrections as needed.



Why Should You Improve & Optimise Your Processes?

Today, a company depends on ERP software to support its business processes. This is an existential necessity. The only way to choose such software is to know the critical competitive business processes and document them.

Business process optimisation ensures that the ERP software you choose meets your long-term business goals. An ERP solution is a major investment for any company. Therefore, it is important that a software solution supports the processes of the next years in order to realise a short ROI.

Most importantly, business process optimisation helps you beat your competition by ensuring that you lay the groundwork for your ERP system to support you in using efficient business processes.



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We hope you find this publication useful. If you have any further questions on this topic, we look forward to hearing from you." - Dr Harald Dreher