In this post, we will be discussing a new tool developed at Ultra that has helped us benefit client interaction by providing a foolproof way to identify where an organization stands on several issues, allowing us to clearly define process improvement opportunities. This tool is called the “Maturity Matrix,” but before we get into the details, let’s go over some common ERP project struggles this application hopes to impact.
How to Determine Success in Your ERP Project
First of all, it is important to remember that ERP selection is a significant investment for any mid-market manufacturer, especially when the definition of success is determined by such specific factors – the most important of which being whether the financial results of the project meet the goals outlined during the justification of the business case, or in other words, the return on investment.
At Ultra, we’ve learned that achieving these ROI goals is entirely dependent on how the ERP system supports the improvement of underlying business processes, which is something many organizations struggle to identify let alone implement. We believe a multi-step process is critical to create, implement and deliver on this improvement plan. For all of our engagements, we find it mandatory to identify the current-state process, determine a future state based on the capabilities of modern ERP systems coupled with process improvements, and finally, define necessary improvements.
The Three Main Areas Affecting Process Improvement
Many teams are able to identify several process improvement projects, but the overall project still falls short of the financial goals. Why does this occur? At Ultra, we believe this situation results from the difficulty a team faces in attacking the most significant process improvements. These process improvements fall into three broad categories: technical, system and cultural.
Technical improvements tend to be straight-forward and usually will not cause disruption to an employee’s daily activities. Items that fall in this category can range from improving a facility layout, to addressing shortcomings of a production process (i.e. increasing feeds and speeds in machining) or even improving a product design.
System improvements are a bit more significant and involve changes such as implementing new software, purchasing new equipment or providing training. These might affect a person’s daily routine, but generally serve to improve equipment or knowledge. They may be disruptive, but the change can usually be explained to the person affected.
The final change category covers cultural changes. A cultural change occurs when the proposed improvement addresses a process that is a sacred cow, but has now outlived its usefulness; it could also be a process change that affects a process developed by a manager in which he has significant personal ownership.Left to their own devices, a project team will typically address both technical and system improvements, but have difficulty identifying cultural-type barriers. This problem occurs because the required process changes sometimes dramatically affect specific employees. In addition, the person affected could be a higher up in the company.
Where the Maturity Model Comes In
At Ultra Consultants, we’ve found a tool called the “Maturity Matrix” to be useful. The Maturity Matrix provides a project team with the ability to clearly identify where the organization’s processes stand when compared to the “best in class.” Maturity matrices are created for each process category to be reviewed. Sub-processes are identified and listed on each row of the matrix. The field headings are labeled to identify process maturity form.
Below is a sample:
How to Use the Maturity Model
To use this model, the project team will review each row with the goal of determining where on this continuum they feel the organization falls. In the example above, one could say the organization’s Supply Chain practice is pretty much average. If our future state goal is improved to best practices across the board, the team can construct projects required to move up the maturity range on each row.
Using a Maturity Model tool allows the team to create an atmosphere that removes a significant level of emotion and focuses everyone on defining what will be required to improve.
In future blogs we’ll explore how this tool can be applied to Business Process Improvement in areas such as warehouse/materials management, lean manufacturing, product design and administrative/information technology processes.