Why is process optimization important?

Process optimization leads to increased efficiency and effectiveness of company processes. Therefore, it often provides a decisive competitive advantage: By collecting, controlling, and analyzing all operational processes, a modern and intelligent ERP system like Monitor G5 enables a targeted improvement of all workflows.

Advantages of process optimization

• Increase in data quality

• Better information flow internally and externally

• Better response to demanding customers

• Increased competitiveness

How does process optimization work?

Modern ERP systems support companies in process optimization on several levels. These can be divided into three categories: technical measures, organizational measures, and processes and procedures.

The latter starts with the identification of optimization potential: keyword process mining. With the help of a process mining tool, you can analyze not only the quality of the processes but also the process times. In many cases, these can be accelerated. This can be due, for example, to the fact that flanking processes are eliminated because they are no longer needed. Often, however, it is also a matter of time management: the 

ERP system can efficiently schedule resources so that, for example, operation times can be shortened as a result. In manufacturing, for example, this allows you to increase production capacity.

An ERP solution helps both technically, with the integration of different systems, and with the standardization and harmonization of processes – as well as with the increase in data quality and process automation.

Increasing efficiency with ERP:

The effects of increasing digitalization and networking are now visible in all areas of the economy. Every company that participates in national or international competition for markets has to worry about internal efficiency at some point. Companies that rely on advanced solutions to optimize work processes and increase efficiency at an early stage have a decisive competitive advantage.

Five steps to process optimization

Particularly with ERP systems that have been in use for a long time, it gradually becomes apparent 

that some work processes still need improvement. The process analysis can be carried out independently of the ERP system because the new software is not always necessary for process optimization.

The more complicated the process optimization, the more the company should think about a new system. In any case, the system should remain expandable after its adaptation. If this is not possible for the system, a change of solution should also be considered. In general, the amount of work and the difficulty of process optimization should not be underestimated, whether the system is new or old. Below we have outlined 

five points that you must consider for the optimization of your processes – especially in connection with the introduction of ERP software.

• Allow sufficient time

Optimizing business processes takes time. It often takes several years for a company to define its current processes and workflows as they currently are. Today's problem, however, is that the environment in some industries and competitive situations changes so quickly that a company hardly has time to adapt fast enough. For this very reason, it is an enormous challenge to translate future customer requirements into a company's own business processes quickly enough.

It may therefore be the case that a business process analysis and subsequent business process optimization takes longer than a technical configuration, or the implementation including testing of a new ERP software.

• Consider important business processes during ERP selection

Modern ERP software is so flexible that it has several options to execute even simple, rudimentary business processes intelligently and optimized. Now, if these business processes are not defined before implementation, they will only be defined during implementation. This inevitably leads to a discussion process and slows down the project, because cooperation within the organizational and process structure usually changes. However, changes in processes usually have a design and planning phase behind them before they can be implemented. Having to do this during an implementation increases the complexity of the process enormously. So consider your most important business processes already when selecting an ERP system.

• Optimize processes independently of ERP

Just as you should define the processes before selecting software, it is important to improve those processes that can be optimized without new software. In addition, use the time to check whether the organizational model is in line with your long-term corporate strategy. If you wait until implementation to optimize processes, it will usually fail, due to a lack of resources and time. Often, the only option is to the existing processes and postpone their optimization until later. However, this means giving away a competitive advantage that is associated with the term – speed. In parallel, duplicate efforts are necessary, because the configuration of an ERP system will then take place based on the existing processes, instead of the required ones.

• Get employees on board

If some of the processes can be automated, this leads to a noticeable reduction in the workload of employees. As a result, the resources in the company are distributed efficiently, so the entire company benefits. However, for optimization to succeed, it must be accepted by all employees. So involve your team in all processes right from the start, and create a joint project.

• Regularly analyze and improve

By no means should you sit back once the processes have been optimized, and a new ERP system has been introduced. Measure the process progress after a certain period of time, for example, half a year after the implementation of new ERP software and the associated new processes. To do this, compare the originally defined goals with the actual results. 

This can include lead times, a common master data pool, process flows, approval interfaces, and many other customer processes that are monitored as part of continuous measurement. In this way, you can make further optimizations step by step.

 

Conclusion: Optimal processes require a mixture of planning and flexibility.

With the help of the analysis and elaboration of the individual processes in the company, targeted process optimizations can be made and implemented with an ERP system. Plan enough time and go through the individual process steps with great diligence. In this way, you will receive an ERP system that fits perfectly and is ideal for you, which will support you effectively and efficiently.

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