New Business Process versus New Enterprise System: Should One Be Implemented First Before the Other?

 

Improving a company’s business process is an essential factor in assuring the growth and success of an enterprise. Proper delivery of a business process is vital in accomplishing organizational goals.

On the other hand, companies also need to have an efficient enterprise system to ensure proper facilitation of business and management needs, particularly those that pertain to operations.

While it is a fact that both aspects are important for a company’s success, many industry insiders are still trying to decide which one holds more value and should, therefore, come first in the hierarchy of tasks.

Some companies put more value on the business process, so they choose to redesign theirs before moving on finding and implementing new enterprise systems. Other companies look for software vendors first, study the new system and redesign their business process afterwards. For enterprises that choose to go with the business process first, the most important thing is being able to map their system into their new processes. The other group, on the other hand, prefers the assurance that their new business processes fit the new system they are currently using.

As technology is ever evolving, it would be difficult to immediately point out a right or wrong procedure. Business processes have continually evolved along with the advancements in technology, or even with enterprise systems. So, one cannot say that technology is of more value because it is highly advanced; business processes keep improving, too.

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Business Process and the Enterprise System Defined

When a company adopts a business process, it is ensuring proper delivery of products and services. A business process refers to a set of linked tasks or activities that help accomplish the organization’s goal. These tasks need to be completed, of course. This is achieved by a series of actions that are based on a number of steps or systems.

Business processes achieve greater results when integrated with a good enterprise system. This system refers to software packages that allow companies to integrate different applications, formats and protocols, and therefore enables integration of various business processes. An enterprise system significantly reduces the need for multiple independent systems. It also lessens the need for manual input of information or data.

The three major types of enterprise systems are

  1. Customer Relationship Management (CRM) System,
  2. Supply Chain Management System and
  3. Enterprise Resource Planning (ERP) System.

New Business Process First

Today’s highly modern world has allowed businesses (and their leaders) to view technology as an end-all and be-all of many things. There are people who believe that most of the problems surfacing nowadays can be addressed and solved by technology. Even the younger generation wants to believe this. For example, when they face a setback or dilemma like how to prepare a budget for a school project, most of them will say, “No problem. There’s an app we can use for that!”.

In business, however, when something fails to function properly; or when organizational goals aren’t met, one cannot just say, “Let’s leave the solution to this and that app!”. It’s a far more complicated matter.

While it is true that a company’s IT department can systematize and simplify business processes, this won’t work out well if the enterprise is inefficient and untested. A flawed business process will not help a company achieve its goals no matter how advanced its enterprise system is.

For instance, your company already has a new enterprise system in place, one that allows better processing of invoices, payment and late payments. If a client is late in payments, the system can identify this client and put the name in the late payments list. But, if the employee assigned to do follow-up calls on late payments is not performing the task efficiently, the process will backfire.

In a situation like this, what needs to be done before anything else is the proper implementation of a business process that would systematize a flawed one.

Aside from this, it is also important to note that business leaders have to fully understand their business processes to avoid two things: non-completion of company goals and choosing the wrong enterprise system.

New Enterprise System First

For some companies, the most effective procedure is to choose a new enterprise system before redesigning their business processes. Those who follow this standard believe that this is the best way to make sure that the process a company maps out will not only be in line with the best business practices, but will likewise ensure lesser chances if the processes do not match the new system.

A good illustration of the importance of establishing a new enterprise system first is when a company decides to shell out money and create a team to redesign existing business processes for the purpose of achieving the best business practices. What will happen is that the organization will group its best people, pull them off other projects perhaps, and then let them come up with precise and detailed business processes.

This should be all right, except that when a new process is too defined and too detailed, there is a big possibility that the company will have a difficult time finding a new system to match it. As a result, the project won’t succeed and time, effort and finances would be wasted.

Therefore, having a new enterprise system in place before redesigning a business process seems to be the most practical thing for enterprises.

The Solution?

If you examine both situations closely, you will realize that both procedures actually involve a lot of time, effort and finances. Both involve risks. So, the best thing to do to avoid loopholes like the ones stated in the situations given, is to follow a 5-step process for the parallel implementation of the new business processes and new enterprise system.

  1. Step number one is to do an initial assessment of all business processes before approaching software vendors and considering new enterprise systems. Each process should be scrutinized in detail.
  2. Step number two is to carry out improvements for processes that will not be affected by the new system. Some examples are documentation and data clean up.
  3. Step number three is to make sure that all the essential requirements have been identified so that a new system can be chosen. Additionally, more detailed evaluation of business processes should be set in place. The best business practices should be applied so all the necessary business process improvements can be addressed before the actual implementation of the new system.
  4. Step number four is to work on the required business process improvements that surface during the implementation of the system.
  5. Step number five is to be open to the possibility that business process improvements can still be done even when the new system has been installed. For bigger improvements that can be disruptive, work should be done after the new enterprise system has been stabilized.

Conclusion

Before implementing new business processes and a new enterprise system, it is crucial for enterprises to identify, analyze and understand its capabilities. Once this is achieved, reengineering or redesigning of the business process and finding a new enterprise system will be easier.

Likewise, it is essential for businesses – and its leaders – to understand that new processes and new systems work together. They are a team; one will not survive without the other. Therefore, it is wrong to say that one is more important and should be implemented first before the other. They work and function in parallel and should be treated and valued as such if the goal is to encourage the company’s growth and success.

Photo courtesy of blese.

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