ERP CRM and HCM Business Process Management [How To Do Business Process Improvement]

Summary

In this insightful video, Eric Kimberling, CEO of Third Stage Consulting, explores the critical debate surrounding business process management (BPM) during digital transformation and ERP implementation. He discusses the ideal timing for BPM—during software selection or design—and emphasizes the importance of defining core competencies versus commodity processes. Kimberling highlights how prioritizing these processes can enhance organizational efficiency and competitiveness. He also addresses the significance of change management in aligning software capabilities with business needs. Ultimately, he advocates for a strategic approach that leverages best practices while ensuring core competencies are preserved throughout the transformation journey.

Takeaways

• 😀 The debate in digital transformation revolves around whether to let software dictate business processes or to shape software based on existing processes.
• 🛠️ Organizations often struggle with business process management due to budget and resource constraints, leading to challenges in defining processes upfront.
• 📊 A typical digital transformation project consists of three phases: software selection, design, and implementation, with significant value in defining business processes early.
• 💡 Core competencies should be prioritized in business process management as they differentiate an organization and contribute to its competitive advantage.
• 📋 Commodity processes are essential but less critical than core competencies and can often be aligned with off-the-shelf software solutions.
• 🔍 Understanding different levels of business process mapping is crucial, ranging from high-level macro processes to detailed transactional steps.
• ⚙️ Technology plays a significant role in determining how processes are executed, especially at detailed levels of business process mapping.
• 📝 It's beneficial to define business processes in a technology-agnostic manner before selecting software, particularly for core competencies.
• 🚀 Effective business process mapping is intertwined with change management, impacting individual roles and the overall organization.
• 📥 Additional resources, such as annual ERP reports, can provide valuable insights and best practices for organizations undergoing digital transformation.

Q & A

What is the main debate regarding business process management in digital transformation?

The main debate is whether organizations should allow the software to dictate their business processes or ensure that their existing processes drive the software design.

Why is it important to define business processes during the software selection phase?

Defining business processes during the software selection phase helps create a clearer vision for the desired future state, leading to better software solutions aligned with the organization's needs.

What are the three major phases of an ERP project discussed in the video?

The three major phases are: 1) Software selection, 2) Design phase, and 3) Implementation phase.

What are core competencies in the context of business processes?

Core competencies are the unique processes that differentiate an organization from its competitors and are critical for its success.

What are commodity processes, and how should they be handled?

Commodity processes are standardized processes that are essential for operation but do not provide a competitive advantage. Organizations can typically use off-the-shelf software for these processes without extensive customization.

What levels of business process mapping are discussed, and how should they be applied?

The video discusses levels 0 to 5 of business process mapping, where levels 0 to 1 are high-level macro processes, and levels 4 to 5 are detailed transactional processes. Core competencies should be detailed to a lower level, while commodity processes can remain high-level.

How does the timing of business process management affect change management?

Conducting BPM early helps identify potential change impacts on employees, enabling organizations to develop change management strategies that facilitate smoother transitions.

What role does APQC play in business process management?

APQC provides industry-specific best practices for business process management, which organizations can use as a baseline to define and refine their own processes.

What is the relationship between core competencies and software customization?

Organizations are more likely to customize software to fit their core competencies to preserve their unique processes and competitive advantage, while they generally defer to standardized software for commodity processes.

What should organizations do if the software cannot support their core competencies?

If the software cannot support core competencies, organizations should either change the software or seek new technology that can better align with their essential processes.