Systems Thinking Part 1: Why Your Process Issues Keep Repeating

In our work as an ERP services firm, we get to see businesses up close.

We work with companies during ERP implementation, help them get their people and processes on board, and continue working with them through adoption and ongoing support.

Naturally, issues come with the territory. Some are technical. Others are related to processes, user practices, or the way different parts of the business work together.

Our job is to understand what went wrong and resolve issues as quickly as possible.

But after handling hundreds of cases and issues across different engagements, we began noticing something interesting.

Some of the issues we had already addressed would eventually come back. Sometimes in the same department, sometimes somewhere else, and occasionally in a slightly different form.

Most were not technical problems. They were process-related or user-related.

We could fix the immediate issue, explain the correct procedure, provide additional training, or make adjustments to the system. Yet, some problems kept finding their way back.

That got me thinking.

Perhaps we’re looking at the problem the wrong way.

There had been occasions where clients specifically requested that I join their meetings to help them work through recurring operational issues. Of course, I am always happy to help!

Coming from a background in management systems consulting, where much of my work involved business processes and operations, I naturally tend to look beyond the immediate problem.

I look at the system.

Not the ERP system alone, but the bigger business system in which the problem exists.

These meetings would often turn into informal workshops. Instead of jumping straight into solutions, I would help the team break down what was happening, identify the different parts involved, understand how they connected, and revisit what the process was actually supposed to accomplish.

This always changed the conversation.

There’s a feeling of excitement (and fulfilment) when people start seeing things they hadn’t considered before. What initially appeared to be an individual or departmental problem turned out to involve several other activities, decisions, or dependencies.

We were no longer just discussing what went wrong. We were beginning to understand why it kept happening.

This is where systems thinking comes in.

So, what is a system?

We use the word system quite loosely. We associate it with software (e.g. ERP, CRM, etc.), technology, procedures, or a collection of things organized to perform a function.

But there is a simpler and more useful way to understand it.

A system is a collection of interconnected parts working together to achieve a purpose.

There are three basic things to understand about any system:

1. Its parts or components

Every system is made up of different parts. In a business, these could be people, processes, technology, information, resources, and rules.

Each has a role to play.

2. The connections between them

The parts don’t operate independently. They interact, exchange information, depend on one another, and influence each other’s performance.

What happens in one part can affect the others.

3. Its purpose or function

Every system exists to accomplish something. Its components and their interactions should work together to produce a desired outcome.

Take purchasing, for example.

Its purpose isn’t simply to generate purchase orders. It is to ensure that the business gets what it needs, when it needs it, at the right cost, and with the appropriate controls.

The people, approval procedures, supplier information, inventory requirements, and ERP functions all contribute to achieving that purpose.

If one or more of these parts aren’t working properly, the purchasing process may not deliver the results expected of it.

And that’s the point.

A system is not just a collection of parts. It’s how those parts work together that matters.

Unfortunately, sometimes a system generates a result that the organization that set it up did not intend to produce. In this case, the system’s purpose is really (unintentionally on the part of the organization) to produce an undesired result. More on this in the succeeding posts.

Looking at the bigger picture

Let’s bring this back to ERP.

An ERP connects different business functions through shared information and integrated processes. A transaction in one area can trigger activities in another. What happens in sales can affect inventory, purchasing, warehouse operations, accounting, and ultimately customer service.

This is why looking at a problem in isolation can be misleading.

A delayed customer order, for instance, might appear to be a warehouse problem. But the warehouse may simply be waiting for replenishment. Purchasing may be working with inaccurate demand information, while sales may be committing to delivery dates without checking actual stock availability.

The delay becomes visible in the warehouse, but the reasons behind it may involve several other parts of the business.

The ERP helps connect these activities, but having an integrated system doesn’t automatically mean the business is operating as an integrated system.

People still make decisions. Processes still need to work. Information still needs to be accurate and available. Responsibilities still need to be clear.

When these things don’t come together, the business experiences the consequences.

From fixing issues to understanding problems

One of the things systems thinking teaches us is to resist the temptation to jump straight into solutions.

It’s easy to focus on the person who made the mistake, the department that missed a deadline, or the process that didn’t work.

But before deciding what to fix, we need to understand what is happening around the problem.

A few simple questions can help:

• What are the different parts involved?

• Who is involved, and what are their respective responsibilities?

• How do these parts interact or depend on one another?

• What information, resources, or decisions do they need?

• What is the process actually supposed to accomplish?

• Where does the actual outcome differ from the intended outcome?

These questions may seem simple and straightforward, but they can reveal things that are not immediately obvious.

They help us distinguish between the symptoms we see and the underlying conditions producing them.

And that is an important distinction.

A quick fix or corrective action may resolve an issue today. Understanding the system gives us a better chance of preventing it from happening again (preventive action).

It also helps ensure that correcting one part does not unintentionally create another problem somewhere else.

After all, what good is fixing a problem in one department if it creates a bigger problem in another?

The bigger opportunity

For businesses investing in ERP, this perspective is particularly important.

An ERP implementation is an opportunity to examine how the business works, not just how software should be configured.

It gives us an opportunity to revisit processes, clarify responsibilities, improve information flows, and make sure the different parts of the organization are working toward the same objectives.

But technology alone cannot make this happen.

The business still needs to understand how its people, processes, technology, information, and management practices work together.

That is what makes systems thinking such a useful approach. It helps us see the business as a whole, understand the relationships between its parts, and make better decisions about what needs to change.

And perhaps, more importantly, it helps us stop treating recurring problems as isolated incidents.

Because sometimes, the problem is not that people are not doing their jobs or that the ERP is not working. The problem is that the system they are working in is not working as it should.

This is the first in a series of articles on Systems Thinking, its practical approaches, and tools that businesses can use to better understand their operations and solve problems.

In the coming articles, we will explore some of these ideas further and look at how they can be applied to business processes, management, and digital transformation.

The objective is simple: to help businesses think beyond individual problems and start seeing the bigger picture.

Because better solutions begin with a better understanding of the system.