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Chapter: Business Science - Enterprise Resource Planning - Solutions And Functional Modules

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Business Process Reengineering

In the first option of reengineering business processes, before implementing ERP, the organization needs to analyze current processes, identify non-value adding activities and redesign the process to create value for the customer, and then develop in-house applications or modify an ERP system package to suit the organizations requirements.

Business Process Reengineering:

 

In the first option of reengineering business processes, before implementing ERP, the organization needs to analyze current processes, identify non-value adding activities and redesign the process to create value for the customer, and then develop in-house applications or modify an ERP system package to suit the organizations requirements. In this case, employees will develop a good sense of process orientation and ownership.

 

This would also be a customized solution keeping with line of the organization's structure, culture, existing IT resources, employee needs and disruption to routine work during the change programmer likely to be the least. It could have a high probability of implementation. The drawback of this option is that the reengineered process may not be the best in the class, as the organization may not have access to world-class release and best practices. Moreover, this may be the only chance to radically improve in the near future and most attention should be paid while choosing the right ERP. Also, developing an in-house application or implementing a modified ERP is not advisable.

 

The second option of implementing ERP package is to adopt ERP with minimum deviation from the standard settings. All the processes in a company should conform to the ERP model and the organization has to change its current work practices and switch over to what the ERP system offers. This approach of implementation offers a world-class efficient and effective process with built-in measures and controls, and is likely to be quickly installed.

 

But if the employees do not have good understanding of their internal customer needs or current processes, or if these processes are not well defined and documented, then it is quite possible that while selecting the standard process from the ERP package, employees may not be able to perceive the difficulties likely to be encountered during the implementation stage. Employees would lack process ownership and orientation. Other than technical issues, issues like organization structure, culture, lack of involvement of people etc. can lead to major implementation difficulties, and full benefits of standard ERP package may not be achieved. It may lead to a situation where the organization may have to again reengineer its processes. This could be a very costly mistake.

 

There is also a third option of reengineering business process during implementation of ERP. But it does not considered to be a practical option and is likely to cause maximum disruption to existing work. It should not be forgotten that during BPR and ERP initiatives, routine work is still to be carried out and customers need to be served.

 

Enterprise resource planning (ERP) is a software platform that helps business owners determine how to best use their available resources. Business process re-engineering (BPR) involves observing and analyzing how the business works to determine changes that may streamline operation at the business. ERP and BPR can go hand-in-hand. An organization's management might use BPR as a means of looking at the current operations of a business to determine how to best proceed when designing or choosing a new ERP.

 

The goal of business process re-engineering is to determine what changes can be made in the way the business operates to improve aspects of a business. Often, BPR will focus on a specific part of the business, like costs, customer service or marketing and advertising. Using BPR does not necessarily lead to ERP. Though ERP and BPR are related, a well-conducted BPR may find that there is no need for an ERP platform in the business. A business conducting BPR may determine to drop an ERP method for reasons including cost, effectiveness, or maintenance.

 

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