FREE online courses on Business Needs and ERP - BPR and ERP - When to Reengineer-Before During or After ERP

 

When companies have chosen ERP, the question arises, “When should I do reengineering?” The approach you take will, of course, depend upon your business situation and thus, your motivation for choosing ERP. To provide some structure for answering this question, let us return to the scale/magnitude matrix and add to it an indication within each quadrant of the type of approach that is more successful.

 

Figure

Scale/magnitude matrix, with indication of reengineering time line

 

In the lower left quadrant, the project team can successfully undertake reengineering during implementation. The system will require identification of the structure, procedures, relationships and standards and will provide the latest in best practices for the modules selected.

In the upper left quadrant, the project team should engage in a BPR process to identify the problems and issues caused by their current processes (streamlining). It should define a high level design for those changes, but move onto the system as quickly as possible to identify the details of the changes. Thus, it will do reengineering both before and during the ERP implementation.

 

In the lower right quadrant, the project team is tasked with reinventing one of its business processes. It should begin by designing in some detail, the changes the company wishes to implement.

 

In some cases, the system did not provide some functionality and they were faced with the decision as to whether to eliminate it from their design or to provide a systems work-around that they would have to maintain in the future. The outcomes of these decisions depended upon the criticality of the missing feature. Many companies have accepted a somewhat less than perfect solution to save themselves the time and expense a “fix” would entail.

 

The upper right quadrant identifies efforts that are focused on reinventing significant portions of the business. These changed projects will take significant time and effort and are usually accomplished with the help of a consulting firm having expertise and experience in managing major changes. A successful effort here will focus on the dramatic, radical changes that are essential to long term survival and growth. Major reengineering projects should be undertaken prior to implementing ERP. As in the lower right quadrant, some relatively minor decisions may be impacted when ERP is implemented.

 

This matrix provides some indication of what type of process redesign to attempt under various circumstances. In any case, it will be counterproductive to delve too far into the details of the new business environment without understanding something about ERP.

 

What about reengineering after the implementation? Some companies assume that they will implement, without going to the trouble of BPR project and address, any needed changes after the fact. In cases where the corporate structure and processes fit well with ERP, this approach is possible, though not recommended. In cases where ERP requires greater or a different structure than the company possesses, the project teams will find themselves making decisions that will affect the company for years to come. Thus, they may reengineer their company without the benefit of a structured process for doing so. We strongly advise against this approach, although it may be successful.

 

Companies that have implemented ERP in several different projects may find their staff has become very experienced with certain modules. There is so much richness inherent in ERP that it takes considerable experience to even begin to understand what it will do. A representative of one manufacturing company, stated that they were starting to use the system to suggest improvements they might make in the future. This approach is a creative use of reengineering after implementation.