Focus on Business Process Improvements | SOFTWARE IMPLEMENTATION

We have all heard the horror stories where a company has spent $50 million on implementing new software and only realized $10 million in benefits. As stated previously, most of the implementation costs are typically in the deployment, not the technology. Similarly, you realize 75 percent of the benefits in the deployment, not the technology as shown in Figure 1. In implementing new software, many companies focus on the software and hardware when focus should be on the business process improvement and redesign, as that is where you realize the true benefits. Companies that have focused on the process and people benefits have realized exponential payback from software implementations. For example, when implementing new software, one company initiated a vendor certification program whereby vendors who achieve exceptional levels of reliability, timeliness, completeness, and quality begin managing the product's inventory levels at the distribution center and the stores. Eventually the inventory is all vendor consigned and paid without a vendor invoice based on the store sell-through reports, which results in tremendous cost savings for the business.

 

Figure 1: Sample implementation benefits

The following are examples of ways that companies have redesigned business processes to realize true cost savings:

• Faster cycle times
• Fewer handoffs
• Fewer steps in the process
• Fewer decisions
• Less duplication
• Minimize delays
• Minimize discrepancies
• Allow fewer exceptions
• Automate manual forms and activities
• Automate workflows by using conditional rules to drive different processes
• Capture data at the source
• Take advantage of real-time processing and information
• Centralize control, effort, responsibilities for speed, and efficiency

When you are finished implementing new software, you are never really done, as the business process improvement must continue. Always raise the bar for cost improvements.