As an independent ERP consultant who deals with companies of all sizes, we hear the term Business Process Reengineering or BPR a lot, but what is it and why is it so important in your ERP implementation?
Business Process Reengineering is a term that was coined by Michael Hammer in a Harvard Business Review article back in 1990. The aim of the article was to bring to business owners attention the theory that sometimes companies need to undertake a radical redesign and reorganisation of their processes so that they can increase their quality of service at the same time as lowering their costs. The radical change that Hammer introduced to businesses was based around 7 key principles, which are:
- Organise your business around the outcomes you want, not the tasks you have to undertake
- Identify all the processes you currently use in your business, and then prioritise them in order of which needs redesigning most urgently
- Make sure the work you do that produces information has information processing integrated into it
- Treat all of your resources as if they were central, even if they are widely geographically dispersed
- Don’t just integrate the results of parallel activities in the workflow, but link the actual activities as well
- Build control into all processes, and put the decision point where the work is performed
- Capture all information at the source
So, business process reengineering works in two ways. Firstly, it allows companies to redesign their organisation into cross-functional teams and secondly, it allows companies to improve their decision making through better data dissemination. If undertaken correctly it can reduce cycle time and therefore cost by allowing businesses to get rid of the activities that are unproductive, and the associated costs that go with them. It can also help companies to improve the quality of their work by reducing fragmentation and establishing clear ownership for each process. As you can see,
As you can see, business process reengineering is a really important process for companies to undertake, and IT and technology can have a very important role to play. Some ERP vendors, in particular, position their systems as enablers for business process reengineering but many companies fail to undertake the process correctly because they fall for the hype. They can be misled by ERP software sales reps and ERP system vendor sites who promise that they don’t need to worry about process reengineering, as their system will do it all for them. Many people don’t realise that business process reengineering should happen before the ERP project starts; in order to make sure the chosen system can support the new processes.
Business process reengineering is one of the most important parts of an ERP project but it is not a simple exercise. An independent ERP consultant like ourselves can help you achieve this by enabling you to gain a better understanding of how your business currently operates and how your processes could be improved. You will then be in a much better position to choose the ERP solution that meets the needs of the business going forward, which in turn will mean you are much more likely to succeed with your ERP implementation. In addition, they can make sure that your implementation costs you less, happens more quickly and is more widely embraced by your employees.
For more information on our independent ERP consultancy services, and how we can help you with business process reengineering and ERP implementation, please call us on 0843 523 5630 or send us an email to [email protected]