With studies showing post-implementation cost savings of as much as 20%, the benefits of Enterprise Resource Planning (ERP) are well established.
Improved efficiencies, streamlined processes, increased productivity, lowered costs—these benefits have a big impact on any company’s bottom line. Businesses with an existing but relatively old ERP system can experience these same benefits by upgrading to an up-to-date version.
There is no denying that an ERP migration is a large task and can be a challenging process. But it’s nothing to be intimidated by, provided the building blocks for success are in place.
Here we’re going to look at what those are and how process mining technology can be used to obtain them.
Migration is a journey which requires a roadmap. The route and landmarks of that roadmap are contained in a company’s data, which means a thorough inventory of your company processes is the essential first step.
This will probably be the most detailed look at your entire operational ecosystem you have undertaken for quite some time—possibly ever. It’s a great opportunity to find and unlock opportunities for improvement.
This undertaking can be done manually, but it’s an enormous task and relies on human assessment of the gathered data, creating margins for error in the overall evaluation.
Many ERP consultants will also recommend one or more workshops as part of the project. Here, team exercises and discussion are used to identify and analyze the various processes that make up the business operation, with the results then used to shape a template for the new ERP system.
But workshops are also a manual process. That means they engage considerable human resources—with added costs if the workshop is off-site—as well as introducing factors such as human error and subjective opinion.
An environment of face-to-face discussion often also encourages participants to seek consensus and avoid conflict. Ideally this is a scientific, fact-based process of analysis, which means the effort to achieve accord may be at the expense of truth and ultimately compromises workshop conclusions and any resultant template.
It is here in particular that process mining technology excels. Data downloaded from company systems can be analyzed rapidly, thoroughly and accurately in real time to provide an unparalleled level of insight into your operation, without being subject to accidental oversight or human biases.
Documenting your company processes is an opportunity to identify best practices across the entire company workflow. The goal is to use the identified best practices as a template for your new ERP system and emerge with a plan for “One ERP” in which processes are entirely consistent across the operation.
Entities with operations spread across various locations might find that there are differing processes and workflows across those locations. Such variations, unless necessary because of regional requirements, are best replaced with a uniform system.
By utilizing the kind of forensic insight which process mining technology provides, processes at each location be examined. The optimal processes can then be identified and rolled out across your entire company as part of the One ERP template.
Use your data to answer questions and make assessments such as:
Does this process work well?
Is this particular process the best it can be? If not, why not? Any gap between as-is and ideal should be used to shape your ERP template.
Are these items ready for immediate migration?
It may be that an item needs to stay in place during the migration to minimize disruption to the business operation, or it may be that some items are not ready to be moved as-is. Have this in mind as you examine your processes.
Can this process be improved?
During your examination, be on the lookout for processes which can be refined or improved prior to being migrated, and/or improvements which can be fed into the brief for your new ERP template.
Does this need to be ported over at all?
Especially in the case of data, there can be a temptation to port things over wholesale. Give a critical eye to everything you are thinking of moving to the new ERP. Just because it’s on your current system doesn’t mean it’s still relevant or useful.
Via process mining technology, your proposed ERP template can be simulated across your as-is systems and compared against your ideal to see if any gaps exist and highlight areas most likely to be affected by the upcoming changes to process.
Once these gaps and areas have been identified, you may wish to adjust your template or address some issue of process management in order to achieve your ideal outcome.
Being able to do this in advance, before entering the ERP migration proper, is a huge advantage. Problems are pre-identified and pre-solved, disruption to your post-migration disruption is minimized.
The alternative—discovering errors, gaps and stresses after your ERP migration—is almost inevitably going to result in significant costs, whether due to operational disruption or the hiring of outside resources to address the issues.
There can be few worse surprises, for example, than undertaking a wholesale ERP migration only to find out that there are now bandwidth issues and/or a lack of cooperation between your servers, networks and applications.
Imagine the satisfaction, on the other hand, from having so thoroughly analyzed your data and modeled your transformation that you’re able to navigate through your migration knowing that any issues arising will be minor.
Once your migration has been completed, your operation moves to the post-migration stage. At this point you will be closely monitoring activity to determine how effective consolidation has been.
Having properly researched and prepared for your ERP migration, you are unlikely to encounter any major issues, but small adjustments will almost certainly be necessary. The same process mining technology that you used to prepare now comes into play as a means of measuring consolidation and maximizing benefits.
Your new template will be in operation. Using real-time data analysis, you can monitor its performance and compare the as-is to the should-be. Any areas for further improvement will quickly become apparent. Whether it is unanticipated process loops, incorrect user hand-offs or simply the need for more employee training, opportunities for refinement can be instantly identified and addressed.
True transformation is not a discrete event. To continue refining your operation and maximizing your future agility, monitor and analyze your operations on an ongoing basis. The ERP migration may be done, but the drive towards greater efficiency never ends!
Southard Jones is Celonis’ VP, Product Marketing. Prior to Celonis, Southard held various executive product and marketing roles at enterprise software companies in the Business Intelligence, Analytics, and Data Science market, including Domino Data Lab, Birst, Right 90, and Siebel Analytics.