75% of organizations say business process improvement initiatives
Business process improvement is the key to your business transformation
helped their organizations Build a foundation for your accomplish their goals. transformation by:
- BPTrends "The State of the BPM Market 2020"
Identifying your unique
requirements
Assessing your current state
It's easy to lose sight of that fact and
Knowing what's possible with
get distracted by complex software today's sophisticated solutions comparisons, deployment strategy discussions, implementation planning
Determining a desired future state
meetings and budget negotiations.
Optimizing your core processes
But when you can get management, project teams and stakeholders to When your ERP project teams prioritize concentrate on streamlining and business process improvement (BPI), your integrating your processes, you odds of success improve significantly. virtually ensure that you will realize improved productivity, accelerated Here's why BPI is important: At the most workflows and lower operational costs basic level, the primary function of an
- benefits that drive higher business
ERP solution is to help your organization performance. efficiently and effectively execute core business processes.
Why Begin With BPI?
processes, to document the current state, to determine the opportunities to apply best practices, and to streamline Experience tells us that the most and improve these processes. successful ERP projects start by optimizing operational performance. There's no secret to it. It's about doing Because a detailed analysis of your the work to know and understand your business processes, practices and important processes such as order-totechnical environment pinpoints cash, procure-to-pay, design-to-deploy opportunities for improvement, and others. informs the software selection process, Here's how this critical phase is done: accelerates time-to-benefit and boosts your ROI.
3 Questions
Core business processes Smart, forward-looking manufacturers are analyzed in depth and and distributors work continuously to in detail. improve their operations. They know
that business process improvement is not just about technology. They understand that to realize the full value of their ERP investment, they need to All inputs, processes and analyze and optimize their processes and then – only then – select and outputs are documented for implement a solution to automate those core processes. processes. And they believe, correctly,
that it makes no sense to throw money, people, time and technology at incorrect, bad or broken processes.
Evaluating and improving your business A process flow processes is essential. To successfully visualization is developed change how your business works, your for each process. organization needs to answer these three questions:
Where are we now?
Process flows The efficiency of most business are used to identify processes declines over time unless inefficiencies and a conscious and continuous effort is made to re-examine, re-imagine, rewaste. engineer and improve them. A business transformation project is the perfect opportunity to take a close look at how your organization performs its strategic The view of your current state clearly Which is why it's important to educate exposes any problems that exist. business process owners on what is While many executives are aware of possible. inefficiencies in their business, they are Here's how to build a curriculum: often surprised by the extent of the inefficiencies, waste or problems in core
- Leverage guidance, insight, workshops
processes. and online resources from outside resources (such as independent
What is possible?
consultants) and third-party organizations. Once the current state is reviewed (and inefficiencies and waste revealed),
- Acquire solution capability,
your business process owners need functionality and product strategy to be shown what can be changed, information from ERP software enabled and accelerated using today's vendors and industry analysts. technologies.
- Focus on the capabilities and functionalities that address your
As you would expect, most managers unique process challenges. and users are not up to date on the capabilities of modern ERP solutions and current industry best practices. They know your current system, and they may have some insight from a past Intelligent, optimized position and solution, but that is not the processes deliver real, bottomin-depth knowledge required. line benefits – and maximize the ROI of your ERP project.
Through a shared understanding of the possibilities and problem areas, your entire organization can develop an appreciation of potential process improvements and opportunities for new efficiencies.
As mentioned, outside parties can offer wide-ranging knowledge about solutions and capabilities during this phase. Independent experts understand the process improvements enabled by today's technologies, know how modern toolsets eliminate inefficiencies in core processes, and offer insight that will enhance your organization's awareness of best practices and software capabilities.
Your "Education Plan" will unlock your team's thinking and give you the roadmap your organization needs to explore the substantial opportunities for improvement. Understanding your requirements and improving your business processes is essential for your organization's transformation.
BPI DELIVERS ROI
Optimized processes deliver new efficiencies – and the biggest share of ERP ROI. Here are 11 core process areas for ROI realization:
E-commerce Production Financial Quality Forecasting Sales Inventory
Supply Chain Pricing and Margin Warehouse Product
Where do we want to be?
- What you can do now, before implementation of a new ERP
With the current state determined and solution, to improve your existing documented, and with possibilities systems? and best practices known, a vision for
- What are the strategic mid-term
improved processes and workflows – improvements that will require IT the future state – can be developed. investments? This effort starts with a review of
- What are the longer-term
your current processes and their improvements that will be required inefficiencies, applicable best practices, to get your organization to the future future requirements and technological state? capabilities – and ends with your desired improvements and plans for A last thought: The vision of your future processes. The primary question future state will help smooth your to answer: What do you need to do implementation. It's common for that you can't do now? organizations to experience resistance to change, even when your existing These workshops also should evaluate processes are limited by inefficient the impact of the new processes on practices and outdated technology. business performance in these areas: The value to be delivered by a new ERP solution – the future state – will motivate your teams, gain buy-in and help them stay focused on the endgoal. The difficult part of BPI isn't knowing what to do. It's knowing how to do it.
We focus first on operational performance because a detailed
2 Experts: Talking About Processes, People & ROI
analysis of a client's processes, practices and structure identifies areas for improvement, accelerates timeWe asked two of our expert senior to-benefit and informs the software consultants, Dave Lechleitner and David Saunders, to tell us why business selection process. To ensure our clients process improvement is critical for ERP get the maximum benefit from their solution success. And this is what they investment in ERP technology the hard had to say: work of BPI is necessary.
At Ultra, we start every project with an BPI is about change. And change is analysis of the client's current state, hard. We often see resistance to reand then work with their leadership and designing, re-engineering and optimizing teams to develop a vision of their future established processes. What are the keys state. Why is this important to do? to avoiding that kind of trouble? Dave Lechleitner (DL): How can you DS: The answer is effective change know where you're going if you don't management. Poor change management know where you are? It's important is probably the most avoidable cause to start with BPI because you need to of project problems and failure. We get determine how the business operates it: Resistance to change, even positive today so you can then define how you change, is normal and expected human want it to operate tomorrow. When you behavior. So plans must be made to have that information, you can decide minimize it and mitigate its impact. which new processes, practices and tools are required to make more efficient DL: Exactly. And it's important to and optimized processes possible. understand that change management is not a discrete phase of a project. It David Saunders (DS): We tell clients should be woven throughout the project, that business process improvement embedded in the methodology and is the foundation of ERP success. infused in the culture of the project and Becausex it is. To get the most out of its teams. your ERP investment, you'll need to have efficient business processes. Here's how we go about change new dashboards and better, datamanagement: We work with our clients supported decisions. And there will to analyze the impact of every change, be ROI achieved from increased help them communicate often, and customer satisfaction, enhanced supply ensure that every person at every chain communication and delivery level of the company understands performance. why it is vital to remake processes and DS: It's really important to determine the implement an ERP solution. ROI as accurately as possible. It provides DS: It comes down to communication, the justification for the project, informs really. Like Dave said, the key to effective the software selection process, sets up change management is communicating areas of focus and measurement, and project scope, rollout strategy and is the basis for determining whether a schedule – and clearly and persuasively project is a success. articulating the case for change. Then repeat and reinforce this messaging often to ensure every level of the organization stays focused on the benefits that will Dave Lechleitner come with the future state – and not is a Senior on the disruptions and uncomfortable Consultant for changes that come with process Ultra Consultants, improvement and a new ERP solution. with more than 25 years of Where's the ROI in BPI? What do you experience helping say when clients want to go straight to mid-market implementation? manufacturing companies leverage DL: The first thing I say is that it doesn't technology to optimize processes, make much sense to invest in an ERP increase efficiency, maximize when the underlying processes are throughput and boost productivity. inefficient. They'll just end up with faster bad and broken processes. David Saunders There are many direct and indirect is a Senior benefits. Most of the return on BPI – and Consultant for a new ERP solution – comes from more Ultra Consultants, efficient production and the resulting with 20-plus years reductions in operating, inventory and of experience labor costs. And optimized processes managing streamline ordering, eliminate physical information inventory, improve production quality technology projects for manufacturing and enable more efficient scheduling, and distribution organizations – projects among other things. designed to improve process efficiency, There also are other important productivity and overall performance. efficiencies that are the result of improved access to operational data, including more accurate materials planning, streamlined reporting,
5 Phases: Ultra's Proven BPI Methodology
Many organizations think of their business process challenges as an IT problem.
PROJECT ORGANIZATION
But technology usually is not Critical structure. the cause of inefficiencies. Your project – and every project we do – starts with the basics. Project Organization includes a number of important first steps: Setting up the documentation and visualizations that project team structure. Selecting the make it easy to identify inefficient, people from across your organization wasteful and redundant effort. who will play important roles on the Steering, Core, Workstream and When completed, the current state Extended Teams. Determining the analysis offers an exploration and cadence and content of project status evaluation of business operations, reporting. Clients often ask how to business processes, IT strategy and determine who should be on the software systems, as well as master data project team. If you are considering and information flow – and identifies and an individual but think they are too prioritizes problems and opportunities. important to the ongoing operations to pull them out even part time to work on the project, then that is who you need on the project team.
VISIONING & EDUCATION
Necessary foundation. An underappreciated but key
CURRENT STATE
component of the BPI process, Visioning & Education brings you up to Essential discovery. date on the capabilities of today's ERP The successful transformation of your technologies (and the possibilities and business requires, first, a thorough opportunities they offer), educates you assessment of your Current State. This on current best practices, helps you critically important, Lean-influenced imagine your processes transformed, analysis gathers key performance and creates a platform to define a metrics, maps core business processes future state. and functions, and produces
Accelerate processes Reduce errors Identify waste Meet regulations
TOP BPI GOALS
Eliminate friction Maximize ERP ROI
FUTURE STATE
BUSINESS CASE FOR CHANGE
Valuable vision. Required rationale. The development and definition of your We answer your most important organization's Future State is critically question – Why? – by establishing the important: Knowing the endpoint goals of your project and validating improves project focus, shortens the improvements offered by your implementation timeframe, prevents redesigned business processes. The detours and wasted energy and expense, foundation of the Business Case for and shortens time-to-benefit. And Change is a thorough analysis of defining the end goal informs and guides the gap between your Current State the software demonstration process. and Future State. And its building Future state visioning begins with blocks are a quantification of the collaborative business process reefficiencies delivered by streamlined engineering workshops, problem processes, a transformational roadmap resolution, gap analysis and opportunity and the identification of high-value determination. It continues with a deep opportunities. dive into your future requirements and technology landscape. It concludes with the delivery of a detailed vision of your remade processes, a transformation roadmap and a project charter.
Measuring up.
A significant factor in business process evaluation is maturity. Are your processes capable of continuous improvement? How efficient, automated and reliable are your most important functions?
BUSINESS PROCESS MATURITY
LEVEL 5 Process performance continually improved through incremental and innovative technological improvements. OPTIMIZING
LEVEL 4 QUANTITIVELY Processes are controlled using statistical and other quantitative techniques. M AT URI T Y MANAGED
LEVEL 3 Processes are well-characterized and understood. Processes, standards, procedures, tools, etc. are defined at the organizational level. DEFINED
LEVEL 2 Processes are planned, documented, performed, monitored and controlled at the individual process level. MANAGED
LEVEL 1 Processes are unpredictable, poorly controlled, reactive. AD-HOC
4 Success Stories
PLUMBING SUPPLY DISTRIBUTOR Legacy platform limitations and timeconsuming manual workarounds slowed WASTE HANDLING EQUIPMENT operations – and opened the door for a MANUFACTURER business transformation. A merger resulted in operational redundancies, and disparate systems PROCUREMENT and processes. A current state WAREHOUSE MANAGEMENT analysis and future state vision set the MOBILE ACCESS foundation for new efficiencies. E-COMMERCE FINANCIAL MANAGEMENT COSTS CUSTOMER RESPONSE MANUAL PROCESSES MANUAL PROCESSES IT MANAGEMENT INDOOR & OUTDOOR FIREPLACE VENDOR MANAGEMENT MANUFACTURER Growth and inefficient processes across the organization drove broad ELECTRONICS MANUFACTURER business process improvements and the An in-depth assessment of the maturity application of industry best practices. of core business processes led to a business process optimization initiative INVENTORY MANAGEMENT and a business transformation plan. COST TRACKING CUSTOMER SUPPORT SHIPMENT PROCESSING FORECASTING/PLANNING SHIPMENT ACCURACY ORDER ALLOCATION MANUAL INVENTORY PROCESSES ANALYTICS INVENTORY ACCURACY MANUAL PROCESSES
Poor alignment with
business goals
5 Reasons BPI Projects Fail
Every BPI project needs to be linked to business goals. If the right metrics aren't Manufacturing and distribution being identified for the project, or if the organizations initiate BPI projects to project scoping doesn't include a variety streamline key processes, identify areas of functions across the company, it's where efficiency can be improved, and unlikely to meet the overall objectives of enable better, more effective utilization the business. If the business goals aren't of resources and assets. But, experts say, clear, or the goals conflict at different one-third to one-half of BPI projects do levels in the business, the project likely not achieve their goals. won't have any clear direction. Why do so many much-needed BPI To avoid this, make sure that the efforts fail? business process improvement project is focused on meeting business goals. If
Failure to accurately and
the goals are muddled, it's important to
comprehensively assess
stop and define what the business wants to achieve before launch.
current state
Before any real change can be made,
Insufficient focus on
and before goals can be set, it is critical
overall business objectives
to know and understand the current state of the business. This involves The saying, "Can't see the forest for the gathering key performance metrics, trees" often applies to BPI projects. If the organization typically operates in siloes, then mapping business processes to so will the project, with different functions identify where improvements will make and teams lobbying for what they need a significant difference. without understanding the overall goal.
Flawed project team
A good way to avoid this problem is to prioritize pieces of the project linked to
composition
the overall business goals – to shift the The BPI project team must represent the focus to moving the entire organization entire organization. Ideally, the team will forward. Every BPI project needs to consist of six to 10 representatives from benefit the organization as a whole, different departments affected by the without detracting from another function. changes, super-users and management.
Weak support from upper
Some team members will be driving change, and some will be in supporting roles. It's critical to choose people Without a champion at the top, a from multiple levels who know and BPI project is doomed. What's more, understand the processes and support getting upper management on board is the initiative. absolutely critical for success because, without their commitment, the plug can be pulled prematurely.
Obtaining support from upper Are your business processes management should be done in multiple messy? To get the most out ways: Make the case for how this project will improve the bottom line, which of your ERP investment, will make them less likely to question you'll need to have efficient the business value of the project. An orientation session can help them business processes. understand the why and the how. And including them in regular briefings and updates will let them see progress.
Why Ultra?
It's critically important to choose an ERP consulting partner with experience in your industry, expertise in your ERP solution, and people who have worked in businesses like yours. And you will want to work with a firm that is independent, flexible and able to build a solution to meet your organization's unique needs.
For more than 27 years, Ultra Consultants has utilized its proven methodology, ERP knowledge and industry intelligence to deliver measurable business performance improvements to manufacturers and distributors in virtually every vertical.
- Our services are built for your industry. We understand your processes and requirements.
- Our solutions leverage our expertise. We help you choose software to meet your unique needs.
- Our results reflect our ERP experience. We maximize benefits and minimize risk – and deliver success. For more insight on business process improvement, and information on our BPI services, contact us now!