Cost Estimate and Accounting in ERP
February 12, 2025
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Enterprise Resource Planning (ERP) and Business Process Re-engineering (BPR) evolved almost at the same time i.e. 1st half of 1990. Both relates to radical redesign of an organization at a relatively short period. Both are having the primary intend to optimize workflow and improve productivity. But, the chicken and egg question remained, whether an organization reengineer business process before implementing ERP or directly implement ERP and reengineer by adopting standard business process, included in the ERP package.
BPR means not only change but radical change within a short period. This change is achieved by complete revamp of organizational structure, business process workflow, job description, performance measurement and adoption of information technology. Some of Basic characteristics of BPR are:
A successful BPR implementation brings significant improvement to productivity, customer service and bottom-line. There are pain and difficulties during implementation and instances where BPR efforts did not achieve desired result. Notwithstanding, the risk is worth taking. Otherwise, there will be grater risk of being overtaken by competitors who develop and progress rapidly through BPR.
BPR or ERP: For successful of BPR implementation, Information Technology plays the role of a key enabler. Therefore, a question is raised whether it is logical to directly implement ERP and re-engineer business processes by adopting world class practices, contained in ERP packages. This approach would avoid embarking on BPR which is expensive, time consuming and often risky. Also reengineered process arising out of BPR exercise may not be best of class. On the other hand, there is a grave risk in this approach if a proper ERP package is not chosen. Process orientation and ownership will be lacking from employees which may lead to major implementation difficulties.
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