By:  Donald Clark CFPIM, CSCP
Companies around the world implement ERP systems for a wide variety of reasons:  some to eliminate manual efforts, some to run their businesses in an integrated environment, some for regulatory reasons, and on and on.  I think that if you ask many people why they undertake an ERP implementation, you might get an answer like “So we can improve”.
True as it is that an integrated ERP system can help a company gain efficiencies, it seems like that improvement sought is not always clearly understood or realized.
There is an old saying that goes something like this:   “When you automate a bad process, you can now produce junk at the speed of light”.  I do not remember who originally said it and the first time I heard it, it was stated more colorfully.  The point needs to be well taken though.
Does implementing an ERP system necessarily mean that the business is going to run better and more efficiently?  Will it be more profitable?  Will the customers be happier?  Will cycle times be quicker?  Will the company be more agile?
Maybe yes, maybe no.  Without fundamental process improvement, no real change occurs.
Hand-in-hand with a new system implementation should be an aggressive effort to analyze and improve the business processes the new system is to support.  Too many times, we see companies who deploy a new system with the expectation that it will simply be used to duplicate the current or legacy processes.
It is only through the relentless process of continually analyzing the current business processes, identifying the waste and inefficiency in those processes and then working diligently to re-structure them that real improvement occurs.
There is much to say about how process improvement can be achieved and sustained.  Believe me – much more and you will see more on this topic in our blog.  For now, though, keep in mind that the system by itself, does not necessarily make for improved practices.
I leave you with a quote by W. Edwards Deming who said, “Improvement is not mandatory but neither is survival”.
Thanks and have a great day.