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Enterprise Systems Configuration for Business

MIS 490

CHAPTER 7

Process Modeling, Process Improvement, and ERP Implementation

3 3

Objectives

After completing this chapter, you will be able to:

• Use basic flowcharting techniques to map a business process

• Develop an event process chain (EPC) diagram of a basic business process

• Evaluate the value added by each step in a business process

• Develop process improvement suggestions

• Discuss the key issues in managing an ERP implementation project

• Describe some of the key tools used in managing an ERP implementation project

Introduction (Ref. pg.183)

• Tools that can be used to describe business processes • Flowcharts, event process chains

• Not specific to ERP

• Can help managers identify process elements that can be improved

• Role of process-modeling tools in ERP implementation projects

Process Modeling (Ref. pg.184)

• Business processes can be quite complex

• Process model: any abstract representation of a process

• Process-modeling tools provide a way to describe a business process so that all participants can understand the process

Process Modeling (Ref. pg.184)

• Advantages of process models • Graphical representations are usually easier to understand than written

descriptions

• Provide a good starting point for analyzing a process • Participants can design and implement improvements

• Document the business process • Easier to train employees to support the business process

Flowcharting Process Models (Ref. pg.184)

• Flowchart • Any graphical representation of the movement or flow of concrete or abstract

items

• Clear, graphical representation of a process from beginning to end

• Uses a standardized set of symbols

• Process mapping • Often used interchangeably with flowcharting

• Specifically refers to activities occurring within an existing business process

Flowcharting Process Models (Ref. pg.185)

Figure 7-1 Basic flowcharting symbols

Fitter Snacker Expense Report Process (Ref. pg.185) • Maria, Fitter Snacker salesperson

• Completes a paper expense report after travel

• Makes a copy for her records

• Attaches receipts for any expenses over $25

• Mails it to her zone manager at the branch office

• Kevin, zone manager • Reviews expense report

• Approves report or mails it back to Maria asking for explanation, verification, or modification

• After approval, mails it to corporate office

Figure 7-2 Partial process

map for Fitter Snacker

expense-reporting process

(Ref. pg.186)

Fitter Snacker Expense Report Process (Ref. pg.187) • Process at corporate office

• Accounts payable (A/P) clerk

• Process boundaries define: • Which activities are to be included in the process

• Which activities are considered part of environment—external to process

• All processes should have only one beginning point and one ending point

• Decision diamond asks a question that can be answered with “yes” or “no”

Extensions of Process Mapping (Ref. pg.187)

• Hierarchical modeling: ability to flexibly describe a business process in greater or less detail, depending on the task at hand

• Modeling software that supports hierarchical modeling • Provides user the flexibility to move easily from higher-level, less detailed

views to the lower-level, more detailed views

Figure 7-3 Hierarchical modeling of Fitter’s expense-reporting process

(Ref. pg.188)

Extensions of Process Mapping (cont’d.)

• Deployment flowcharting • Swimlane flowchart

• Depicts team members across the top

• Each step is aligned vertically under the appropriate employee or team

• Clearly identifies each person’s tasks in the process

Figure 7-4 Deployment, or swimlane, flowcharting of the Fitter’s expense

report process (Ref. pg.189)

Event Process Chain (EPC) Diagrams

• Event process chain (EPC) format • Uses only two symbols to represent a business process

• Matches the logic and structure of SAP’s ERP software design

• Two structures: events and functions • Events: a state or status in the process

• Functions: part of the process where change occurs

Event Process Chain (EPC) Diagrams (Ref. pg.190)

Figure 7-5 EPC components

Event Process Chain (EPC) Diagrams (Ref. pg.191) • EPC software

• Enforces an event-function-event structure

• Standardized naming convention for functions and events

• Three types of branching connectors • AND

• OR

• Exclusive OR (XOR)

• Basic EPC diagram can be augmented with additional information

Figure 7-6 Basic EPC layout Figure 7-7 AND connector

(Ref. pg.191-192)

Event Process Chain (EPC) Diagrams (Ref. pg.192)

Figure 7-8 OR connector Figure 7-9 XOR connector

Figure 7-11 Possible connector and triggering combinations

(Ref. pg.194)

Figure 7-12 Splitting and consolidating paths (Ref. pg.195)

Figure 7-13 EPC diagram with organizational and data elements

(Ref. pg.196)

Process Improvement (Ref. pg.197)

• Value analysis • Each activity in the process is analyzed for the value it adds to the product or

service

• Value added is determined from the perspective of customer

• Real value: value for which the customer is willing to pay

• Business value: value that helps the company run its business

• No value: an activity that should be eliminated

Figure 7-13 EPC diagram with organizational and data elements

Evaluating Process Improvement (Ref. pg.197- 199) • Disrupting the current process to make changes can be costly and

time consuming

• Dynamic process modeling takes a basic process flowchart and puts it into motion

• Uses computer simulation techniques to facilitate the evaluation of proposed process changes

• Computer simulation • Uses repeated generation of random variables that interact with a logical

model of the process

• Predict performance of the actual system

ERP Workflow Tools (Ref. pg.200)

• Workflow tools • Software programs that automate the execution of business processes and

address all aspects of a process, including: • Process flow (logical steps in the business process)

• People involved (the organization)

• Effects (the process information)

• ERP software provides a workflow management system • Supports and speeds up business processes

ERP Workflow Tools (Ref. pg.201-203)

• Workflow provides a number of useful features • Employees can track progress of workflow tasks

• System can be programmed to send reminders to employee(s) responsible for a task

• For sporadic processes, workflow tools are a powerful way to improve process efficiency and effectiveness

Implementing ERP Systems (Ref. pg.203)

• Late 1990s: many firms rushed to implement ERP systems to avoid the Y2K problem

• Since 2000: pace of implementations has slowed considerably • Most Fortune 500 firms have implemented an ERP system

• Current growth is in the small to midsized business market

• Implementation of ERP is an ongoing process

Implementation and Change Management (Ref. pg.206) • Key challenge is not in managing technology, but in managing people

• ERP system changes how people work • To be effective, change may have to be dramatic

• Business processes that are more effective require fewer people

• Some employees may be eliminated from their current jobs

Implementation and Change Management (Ref. pg.206) • Organizational change management (OCM): managing the human

behavior aspects of organizational change

• People do not mind change, they mind being changed

• If ERP implementation is a project that is being forced on employees, they will resist it

• When employees have contributed to a process change, they have a sense of ownership and will likely support the change

Implementation Tools (Ref. pg.206)

• Many tools are available to help manage implementation projects • process mapping

• SAP provides Solution Manager tool • Helps companies manage implementation of SAP ERP

Implementation Tools (Ref. pg.207)

• In Solution Manager, ERP implementation project is presented in a five-phase Implementation Roadmap:

• Project Preparation (15 to 20 days)

• Business Blueprint (25 to 40 days)

• Realization (55 to 80 days)

• Final Preparation (35 to 55 days)

• Go Live and Support (20 to 24 days)

Figure 7-17 Implementation Roadmap in Solution Manager (Ref. pg.207)

System Landscape Concept (Ref. pg.210)

• SAP recommends a system landscape for implementation • Three completely separate SAP systems:

• Development (DEV)

• Quality Assurance (QAS)

• Production (PROD)

• Transport directory: special data file location on DEV server

System Landscape Concept (Ref. pg.210)

Figure 7-18 System landscape for SAP ERP implementation

Summary

• Business processes modeling

• Tools

• Process Improvement

• Workflow

• ERP implementation