Implementing ERP: A Process-Centric Approach

There is a prediction that over 70% of the

world's business applications will move into the ERP format over the next decade or so,

which can be a cause for considerable excitement for the product vendors, implementers and

trainers that proliferate in large abundance in the ERP industry.

However, the reality is that the

implementation of ERP in many business organizations has run into rough weather, not so

much because of deficiencies in the software product, but because there has often been a

gross under-estimation of the time, projects are initiated either because ERP is seen as

today's buzz-word, a few million rupees are spent in acquiring licenses of the most

popular product of the day and then the implementation runs into tough weather because the

organization is unwilling to commit itself to the process of making the product really

work.



Let us follow the typical implementation cycle to see what really can and does go wrong.
In the first instance, ERP implementation is seen as just another software package and is

let in the hands of the cio or systems manager. Since most ERP products are sold as being

highly flexible and adaptable to the needs of the firm, there is a belief, particularly in

Indian companies that the product can be bent any way to suit the particular and peculiar

processes of order procurement, planning, materials control and distribution that the

organization has always followed and it's just a question of getting the people used to

electronic instead of paper formats. As the implementation progresses, the number of

changes that have to be made to eliminate non-value adding and vestigial tasks and

activities prove to be so many that the line managers harden their attitudes and pronounce

the ERP product as just one more in the long list of disastrous computerization

experiments and business reverts to usual and the systems head moves on to greener

pastures.

While this cynical view may not be

happening in many cases, it is not because the process is planned better, but simply

because the investment in ERP has normally been so high that it cannot be wished away and

all the managers try to make something happen. Even if the real benefits are not achieved,

some of the control systems are put in place so that the organization can at least claim

to have implemented some of the features. The sad reality is that implementing less than

half of the features typically results in benefits that are less than a tenth of the real

benefits of customer satisfaction, productivity improvement, cycle time optimization and

worklife enrichment that could and should be attained through ERP.

Catharsis



So how does one successfully

plan an ERP implementation in any organization? First and foremost, get the total

understanding to percolate among the entire top management team that ERP will involve a

catharsis, where every existing process and sub-process in the supply chain as well as the

entire customer-oriented business cycle will have to be put under the microscope. Every

process will need to be put as close to the theoretical optimum methods as possible, which

eliminates all unnecessary duplications, reverse work flows and orthogonal. To take a few

examples, an existing process that involves a document going to and from the sales office

to the factory to the office before a proposal can be given to the client will have to be

questioned to see whether an empowered sales person could not undertake the entire process

without all the delays. Similarly, a process that involves looping between two peer

departments like design and production will have to be streamlined and excessive delays

for decisions to be taken by bosses which call for information flows that are orthogonal

to the desired work flow will have to be simplified.

Call this Reengineering or Process

Rationalization, the basic necessity is applied common sense. What was required and

possible in a supplier-oriented shortage economy cannot be afforded in the cut throat

competition that pervades all industry segments in present times. It would be truly

disastrous to attempt a force-fit of an ERP product till the implementation team is

confident that the processes are as close to optimal as possible. Once that is achieved,

the correct ERP product can be put in with some customization which will be more driven

through change of a few parameters than an attempt to revisit the fundamentals of the

process.

The argument that is being made here is

that it is not the "ideal ERP Package" or multiple man-years spent in

customization and training that will drive the success of an ERP project in any business

organization. If the processes are elegant and streamlined and enough effort is put in to

make sure that all possible rationalization and reengineering is done, half the battle is

already over and the organization can truly hope to see the pot of gold that is expected

to lie at the end of the ERP rainbow.

alt="pen.gif (928 bytes)">Ganesh

Natarajan,



MD, Aptech Ltd, and


Director, Hexaware Group.


ganeshn@aptech.ac.in