April 10, 2013
Most major systems projects will force a change to business process. One of the keys to the implementation is to make sure the business process changes for the better—the process should become more efficient, more accurate, or provide additional value for the pension organization.
We have seen business process improvement initiatives take place during different points in the projects: some clients attempt to create a future state process at the beginning of the project. Others wait until the software vendor is selected, and then try to create new processes during the course of the implementations. Finally, some clients wait until the software is implemented, and modify the business processes to best utilize the new system.
When is the right time to perform this work? The answer is that it depends. The decision will have ramifications for the entire project, however, so it must be made carefully. By committing to creating an improved process prior to selecting the software vendor (meaning the new process is included as a requirement of the new system), the organization is dictating to a great extent the type of solution selected.
Some software solutions may be well designed for the new processes. Some may not. The organization is essentially locking in a solution and a price tag by committing to a new process early in the project. The upside of this approach is that the pension system has contractual security that they will receive the new process as part of the implementation.
Implementing business process improvement as part of the design phase of the project has the advantage of flexibility, to a great extent. The software vendor’s analysts will be available to help guide the solution design, and may offer solutions that the organization may not have thought of. The vendor can also help explain what type of process works well in their solution versus those that do not. The disadvantage of this approach is that the best process may not be considered “in scope” for the contract, and therefore could result in additional cost. It is also possible that the software’s limitations may end up reducing the ability of the system to improve the process. Finally, software implementations are resource heavy even without attempting process improvement. It is possible the retirement system does not have sufficient staff resources to support this effort.
Performing process improvement post-implementation has several advantages:
- the retirement system’s team will be very familiar with the new system
- they will better understand how to use the system efficiently.
- the project staff will also be freed up to work on this activity.
However, there are disadvantages to this sequence as well: once the system is in place, it may not be simple to make changes to it. Depending on the system, making process changes could result in costly change orders, which many executives are reluctant to accept once a long implementation has finished. Organizations in many cases have project fatigue at the end, and lack the energy to take on a significant process improvement project.
In our view, properly planned, any time could be made to work for this activity. We strongly believe the activity is worthwhile, regardless of when it is performed. Process improvement is a way of squeezing much more value out of an implementation for a relatively small percentage of the overall budget.