Customer needs are constantly growing. In order to maintain customer satisfaction, organizations’ internal needs for IT systems are also building up. One of the causes for this phenomenon is that the competition is getting more global with small startups challenging huge industry giants. As organizations want to be efficient and effective, they have large IT systems, such as ERP systems, to keep operations running in a systemic way. However, many of these are legacy systems that do not respond to the latest business requirements of scalability, data availability, reporting, mobility, or overall performance.
The need for new ERP implementation
In order to meet the growing needs and stay profitable, organizations are moving towards new ERP systems which are commonly offered as cloud services. This transition from on-premise to cloud services has not been as sudden as it was predicted by industry analysts, but it is happening right now.
Microsoft Dynamics 365 ERP is one of these latest ERP systems for large enterprises that support cloud functionality. The figure below shows how Dynamics 365 is very scalable and closely connected to other systems in the Microsoft ecosystem, like Office 365 and Azure, while providing operational information through Power BI reporting application.
Common ERP implementation risks and challenges
However, on a general level, EPR implementation projects are massive and difficult to successfully execute. Moreover, these projects are notorious about their failures as multiple case studies show relatively low success rates. One of the main reasons for this is that the configuration is not done correctly on the new ERP system and explanations for this are many folded.
Importance of having as-is businesss process understanding.
To give an example, an organization not understanding its existing business processes and then designing processes inefficiently to the new ERP system is a common cause for failure.
It feels silly even to think about configuring something new without first having an understanding about the current state. The very basic idea beneath improving is to first understand the current state, then design and configure the wanted change, and deploy it. Finally, there must also be a follow-up phase to monitor whether the change produced the wanted outcome, and what should be done in the future.
Still, many of the ERP implementation projects are missing this important knowledge. To provide this knowledge, QPR Software has a process mining solution for Microsoft Dynamics 365. This solution supports the understanding of the current ERP system like Microsoft AX or Microsoft NAV. It then proceeds further with the ERP migration project to discover insights of the new ERP system, like Microsoft Dynamics 365. Moreover, the solution supports a creation of a continuous improvement setting to maintain the process knowledge within the organization.
5 Steps to successful ERP implementation with process mining
1. Understand existing processes.
Understanding is a crucial step because without an understanding of current processes and operational situation, it is difficult to apply any effective improvements.
2. Harmonize processes to have a good understanding.
Need of harmonizing is something to think about with care. Many organizations do not want to use any resources on an old ERP system or existing processes if there is already a decision of moving forward. However, if the current process understanding is on a low level, process harmonization and doing first process iteration on existing ERP system is still worth doing, since it will significantly help setting up the new ERP system.
3. Configure and implement new ERP system.
Actual ERP system implementation project. All the test and pilot data should be analyzed from a process point of view to guarantee that the ERP implementation is done correctly and the large volumes after deployment would not cause any operational issues.
4. Understand new data structures and support deployment.
During ERP system deployment, the visibility to data structures and data itself is very important as the system is totally new for users. With the visibility to data, the correctness of the usage can be tracked and personnel training resources can be directed to correct pain points.
5. Set visualized KPIs for continuous development.
Finally, but preferably as soon as possible and already before the first ERP testing, there should be visual KPIs set up to follow process status and operations.
Traditional BPM vs Process Mining in ERP implementation
Our customers have recognized these 5 steps being highly valuable with the help of process mining leading to successful ERP implementation. The vital knowledge of current process state before new ERP implementation can be obtained to same extent through dozens of traditional workshops, but using an objective data-driven method, such as process mining, is much more effective. Moreover, it shows the actual as-is process reality while being highly economical, as process mining saves tons of valuable internal working time of which today’s lean organizations have already allocated for more urgent tasks.
If you would like to learn more about how process mining supports the set up of an ERP implementation, check out our webinar below.