Wednesday, April 5, 2017

Optimizing an implementation

A lot of organizations use a SAP CRM system to manage their customer related activities in the field of Marketing, Sales and Service. As with all IT systems, a CRM system requires regular updates and maintenance in order to keep it up-to-date, and when a system eventually is outdated an entirely new system can be implemented.

When implementing a new CRM system most organizations recognize the ideal opportunity to clean their data. A logical thing to do when migrating to a new system. However, an implementation is also an ideal opportunity to streamline business processes, but this topic often seems to be underexposed. Why is this the case? And what can be done about it? In order to answer that question, let me explain some of the basics.

First, there’s the field of Business Process Management, or BPM. There are various explanations of this concept, but they all come down to the following: BPM is a discipline that focuses on improving an organisation’s performance by managing and optimizing it’s processes. Since an ERP implementation usually implies a change of business processes, this provides an ideal opportunity to simultaneously address an optimization don’t you think?

Secondly, any change of business processes needs to be effectuated by properly using change management. Since an ERP implementation also requires change management due to the formerly mentioned implication, all of this seems to be an ideal combination. Why then, is BPM so often underestimated and underexposed during an ERP implementation?
To my knowledge and experience, most answers to this question come down to the following: The ROI of these efforts are not always clear. Although the goals and benefits of both BPM and Change Management can be very clear, it can be hard to quantify them in hard currency. Time, cost, quality and adoption are four key items in most ERP implementations. However, the former two most often overshadow the latter.

Successfully addressing BPM combined with Change Management can be done, however it requires some time and effort. For this aim one can adopt the concept of Key Performance Indicators, or KPI’s, to measure performance of business processes. KPI’s define a set of values which can be measured. Significant stages in identifying KPI’s are first of all having pre-defined business processes and requirements for these processes. Secondly measurements of the results of these business processes, both quantitative and qualitative, are of importance. In practice this means that both before and after implementing a new ERP system the affected business processes are to be analysed and documented in detail. By accordingly measuring KPI’s before and after the implementation in a uniform approach the benefits of BPM can be identified and compared. The outcome of this comparison can be used to define the actual ROI of the business process optimization. An additional benefit of analysing and documenting the affected business processes before an ERP implementation is that one allows any hidden problems within the current processes to surface, which enables the business to take them into account when defining the requirements for the new ERP.

Of course, using KPI’s as benchmark can be a difficult exercise. First of all it is very important to know what one aims to measure so the right indicators can be determined. Also, indicators need to be quantifiable; although subjective, qualitative data can be made quantitative, for example by using surveys, it is very important to adopt a uniform approach in each measurement. Furthermore, the broader effect a KPI could have on an employee’s behaviour needs to be understood; any unintended influence has to be taken into account. Finally, it is important to remember that the effects of BPM efforts in an ERP implementation may not always be directly noticeable. So be patient, allow the users to adopt the system and let them get used to the new way of working.