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Business Process Reengineering.  BPR. Change management. Management change is a must before automation.  No point in automating wrong or obsolete business process.

Managers can unleash the real ‘power’ and immense capabilities of computers by challenging ‘centuries–old’ notions about work. Business Process re-design.

 

  • If you automate a procedure with ERP,  it will speed up the results.  But, what if the legacy procedure itself was ‘incorrect’?  After ERP, now the ‘incorrect’ procedure will do wrong things  faster.  Is that what you wanted to achieve by deploying ERP?  Correct method to implement ERP is first to identify a process, second improve.  Third, automate with ERP.  Here is a short story that exemplifies need for change.  Some companies keep on changing ERP instead of changing their legacy procedures.

  • Crow story: Once there was a Koel sitting on a branch.  She saw a crow running away.  She asked him, why are you running?  Crow said, ‘I am fed up with people around here, I am going to a new place’.  She asked ‘Why’?  Crow said, ‘they are  not good, they do not allow me to seat at one place, they always shoo me away by throwing stone and all that, and so I am going to a new place.’  She asked him, ‘Oh, OK, but did you change the old habit of screaming Ka  Ka  Ka and disturbing people’.  He said ‘No’.  Then she said. ‘in new place also perhaps people will drive you away and you will not benefit by running away from this place’.

Moral of the story:  Change before you automate.  No point in just changing ERP, try to change users.

Let us consider few examples:

  • In one small company, the purchase officer was in habit of ordering material on phone.  In ERP that is not allowed.  If PO is not made, stores cannot enter data about material received.  For about three months, everyone tried his or her best to resist change.  Then the MD came to our rescue.  He instructed security that if the truck comes without bill, or without our Purchase Order reference number: “Do not allow the material to come inside the factory”.  After a couple of incidents where the material was returned, all the suppliers understood that the company was serious.  They started writing the PO reference number on their challan-cum-invoice.  Challans alone is not accepted.  Vendors and third-party insisted on getting the PO or JO from the purchase officer.  In other words, change was enforced by the top boss.  Benefit: Return on investment realized.

  • Classic example: “In DNS ERP software, we gave a link in the Purchase Order (PO), to pickup rate from the Purchase quotation.  User’s reaction: “I do not have time to prepare purchase quotations in ERP”.

  • Then, how ERP will help you with the pre-purchase module?  You have to change.  As a top person with authority, you should put your foot down and say, ‘nothing doing, we have invested in ERP to improve our business processes and not mimic old way of working in new ERP business logic.’

  • Another example: In one project, the user insisted on making challan to give materials to customer.  Our team said this is wrong and that you have to make CCI – Challan cum Invoice.  He did not budge.  He made our programmer change.  Now after six months he realized the mistake and again requested for the change back to the way it was.  He was charged Rs. 50,000/- for making changes.

  • This is a good example (of sticking to bullock-cart): In one company accountant was using an old fashion account-centric program, where she was allowed to change / edit / delete a transaction.  She expected ERP to do the same.  Without realizing, the very benefit of ERP is lost.  ERP is multi-user software.  Now we are planning to give access to branch offices.  The edit facility is a serious problem because user will ‘misuse’.  If you have a motor bullocks are not required, it is that simple (see picture above).

  • Ask yourself a question: What are the opportunities for improvement?  Please write down for each function, say in accounts, in purchase, and so on.  Resistance to change is natural but we are intelligent human being, we have the reasoning mind.  Take ERP implementation as opportunity to carry out changes.

  • Why change? Conventionally, the legacy system that organizations use today, captures only transactional data like ‘what is bought’, at what price and when. The RFID technology enables capturing the event data through wireless sensor (reader) on each item and communicates to the ERP server on ‘Real-Time’ basis. We should “change” our businesses; Use the power of I. T. to radically redesign our business processes in order to achieve dramatic improvements in their performance.

  • Old rule: “we pay when we get the invoice”.  New rule: “we pay when we get the goods”.   In many growing companies in developing countries like India, they receive material with a ‘Challan’ (piece of paper that just mentions quantity) and later the supplier gives the invoice. The material is accepted, by stores based on Challan; and may be even issued to production. While account section is not making any entry because ‘invoice’ was not received at that time. It is necessary to persuade vendors to give the bill along with the material. That is, insist on Challan-cum-Invoice (CCI).  Only if the vendor is under excise rule, stores will receive material with Challan-cum-Invoice. If vendor is not under excise he may send bill with Challan.

  • What to do? Now these vendors need to be educated for sending the bill so that accounts entry in ERP and that in stores will always match. One of our DNS users understood the significance and importance and took initiative to send some 400 mail merge letters to all suppliers to ensure that they send the bill as per the Purchase Order Schedule (which was prepared in ERP) citing the PO number on the bill. Even the security (security guard) was told not to allow any material to enter if not accompanied by a bill. It took sometime for all concerned to understand the ‘reengineering’ but after sometime everybody said it was a change for better!

  • Re-engineering while implementing ERP triggers changes of many kinds, not just of the business process itself.   Job designs, organizational structures, management systems, and most importantly ‘Attitude changes’ – anything associated with the process – must be refashioned in an integrated way. In other words, re-engineering is a tremendous effort that mandates change in many areas of the organization .  ”Don’t be afraid to give your best to what seemingly are small jobs. Every time you conquer one, it makes you that much stronger. If you do the little jobs well, the big ones will tend to take care of themselves”.  (by Dale Carnegie).

  • In ERP, we try to coordinate parallel function during the process – and not after it is completed. Considering the inertia of old processes and structures, the strain of implementing re-engineering plan can hardly be overestimated. But by the same token, it is hard to overestimate the opportunities, especially for established companies.

  • Before implementing DNS ERP software one must do quite a bit of BPR. In fact, BPR and ERP implementation goes hand-in-hand. On one extreme, we change the software to suit current business processes – known as customization. On the other extreme, user is ready to change the current business processes and does BPR. The sensible way is to strike a balance somewhere in-between. Please instruct the ERP implementation team to carry out only ‘essential customization’. At the same time, identify old inefficient processes for revamp, and tell the users to adapt to new business processes in view of ERP, since some of the tasks that they were doing would now no longer be required.

  • Example of top management strictness: In one ERP project, we observed that they took the following approach:  After GO-LIVE, everyone was asked to join ‘new’ company. They are working in a new company, in a new role, and if they could not take on the new processes and working with ERP menus, they should leave after the 3 months probationary period was up. While effective, not always possible, and also an extreme example.

 


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