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Business Process Automation To Business Process Transformation-via ERP

by Prasad Kulkarni – Partner and Head, ERP Advisory, KPMG-India November-2015

Founded in September 1993 and headquartered in Mumbai, KPMG is a global network of professional firms providing Audit, Tax and Advisory services. KPMG in India provides services to over 2,700 international and national clients in India and has offices in Mumbai, Delhi, Bangalore, Chennai, Hyderabad, Kolkata, Chandigarh, Ahemdabad, Pune and Kochi.

Products and services pertaining to Enterprise Resource Planning (ERP) have come a long way from automation to revolutionizing the way organizations go about their core functions (finance, HR, sales and operations). The capability, flexibility and integration abilities of the ERP products have reached a stage where an ERP implementation initiative can truly be considered as a strategic business transformation, rather than just going ahead with/carrying out business process automation.

Interestingly, what remains relatively the same is the process that an organization has to undergo during ERP implementation. Over the years, there have been striking similarities in the successes or failures while implementing ERP solutions. More than any other IT solution, ERP should be owned and driven by businesses and users, as it is more of a workhorse in nature, crucial to their core infrastructural assets.

Evaluation and selection of a suitable and effective ERP solution/platform in itself has the capability to define the success of the initiative. While advising and assisting clients in this phase, we insist that considerable thought and application should be given to answer the following critical questions:
 

  • Do we have a good case of benefits? (Why are we doing this?)
  • Do we know what merits we should aim for? (Critical success factors)
  • What costs are reasonable for our organization? (Among the leading factors is not necessarily always effective)
  • Do we know what our complete requirements are? (Scope)
  • Centralized or de-centralized? "Among the best" or monolithic ERP solution? (Technology/Solution architecture)
  • What are the criteria, based on which we select an ERP? (Objective and rational decision making)

Some of the most frequently asked questions from our clients have been "Why should we not go for the same ERP solution used by most of our competitors? Why waste time and money on a selection exercise?" Our view is that zeroing in on the ERP platform, though highly critical, is only half the job done. ERP selection is a process that gets users together, brings out well-structured current and future requirements and builds consensus amongst users. This journey is more important than the end itself.
Orchestrating and managing an ERP implementation is in itself a capability and pedigree that is not in common. Either in-house or through a partner, implementation management needs to focus on delivering quality and effectiveness with confidence.

As in the case of ERP selection, a good start to implementation (business blueprinting) needs to be approached with a sense of discipline and rationality, adding immense worth to the solution and its processes. The process design in itself will give way to a course of thought on how a business/organization would like to integrate/communicate with its audience (internal and external). Though Customer/Supplier Relationship Management (CRM/SRM) are not considered as core ERP modules, the process design in ERP has the capability to drive strategy for integration/communication on both sides.

Solution architecture and implementation have become standard capabilities, but there is plenty of scope for things to go wrong if not approached in a structured manner. The aspects of governance, risk management and continuous alignment and monitoring need special mention here.

Even though ERP is driven by business, considerable effort and focus is required in taking the platform live and making business users adapt to it in a smooth and efficient manner. The initial cycles of roll-out usually concentrate on standard functionalities. However, with the correct vision and desire, there are lesser limitations on how the adaptation and usage of the platform can be evolved.

Having said that, it is equally important to point out the way ERP platforms are progressing, functionally and technologically. With technologies such as big data, cloud, predictive analytics, mobility and internet of things (IoT) disrupting the way businesses are run, should an organization in general and an IT leader in particular, be satisfied with a well-implemented ERP platform?

As an IT leader, one needs to understand, design and implement the platform not just to process and report data, but to consume and produce the right value, volume and variety of data at the velocity it is being produced. This is in itself a challenge and an opportunity, as it can enable the adaptation of several next generation technologies that can be significant to businesses and organizations. Truly, ERP implementation is no longer business process automation but business process transformation.