Enterprise Resource Planning and Process Modeling

Enterprise Resource Planning

• Focuses on process modeling, improvement, and ERP implementation
• Aims to map business processes using flowcharting
• Uses Event Processing Chains (EPC) diagrams
• Evaluates value added by each process step
• Develops process improvement suggestions

Process Modeling

• Business processes are complex, requiring diverse skillsets and cooperative work
• Processes are inefficient and ineffective without clear definitions
• Proper training for individuals and understanding their roles within the overall process is critical
• Utilize flowcharting and process mapping to clarify for all involved

Flowcharting Process Models

• Flowcharts are the simplest process models, initially used by programmers and mathematicians
• Offer a graphical representation of a process, from start to end
• Applied to business processes since the 1960s
• Process mapping is a specialized application of flowcharting to specific existing processes

Flowcharting Symbols

• A limited number of symbols (only 5) are needed to map a process
• These include Boundaries (initial/final), Operations, Decisions, Direction of logic, and Connectors

Extensions of Process Mapping

• Hierarchical Modeling: Describes processes in varying levels of detail
• Useful for complicated processes, starting with general descriptions and then defining steps in greater detail
• Deployment Flowcharts/Swimlane Flowcharts: Visually demonstrate a business process by dividing it into sections, showing responsibility per department or individual role

Hierarchical Modelling

• A method where a single activity can represent an entire process
• Processes are defined as models in separate files and linked to activities
• A model linked to another model is known as a submodel

Hierarchical Modeling Advantages

• Focuses attention on manageable components
• Reduces risks of forgetting details and confusing interactions between modules
• Enables simultaneous work by multiple modelers on different submodels
• Simplifies changes and corrections
• Facilitates documentation

Swimlane Process Map

• Visual tool for communicating processes and their components, outlining a process from start to finish.
• Organizes all aspects, including functions/departments involved
• Divides a process into different sections, representing different parts and responsibilities within an organization

Deployment/Swimlane Diagram Example

• Shows a clear division of tasks among different roles (Human Resources, Employee, Manager, Payroll Vendor)
• Helps identify each person's responsibilities within a process

Why Use Swimlane?

• Project managers use them to detail complex projects, assign tasks, highlight objectives of different departments
• Enhances communication and facilitates team collaboration between departments.

Class Activity #1

• Revisiting previous tutorial material
• Creating a flowchart and swimlane diagram for the recruitment process at a fictional company (ABC Company)

Class Activity #2

• Streamlining the recruitment process using an Event-driven Process Chain (EPC) diagram
• Clearly illustrating each step within the process (Job Posting, Application, Screening, Interviews, etc.)
• Using XOR to represent decision points in the process (hire or reject)

Process Improvement

• Process Mapping uncovers opportunities for improvement
• Value Analysis: Evaluating the value added by each specific activity within a process
• Identifying Activities: Classified as Real value, Business value, or No value (activities to eliminate)

Sample Value Analysis

• Activities costing more than their value are targeted for improvement
• Fitter Snacker's expense report process isn't valuable to customers
• The process offers business value but incurs unnecessary cost
• Value analysis involves determining what customers are willing to pay for

Process Improvement Questions

• Companies ask questions to identify areas of improvement in business processes
• Examples: Unnecessary checks, signatures, copies, and written correspondence
• Organizational procedures impeding efficiency, multiple collections of the same information, duplicate databases

Business Process Engineering

• Dramatic, comprehensive changes to organizations, structures, job definitions, performance management
• Improvements facilitated by using Information Technology
• Aims at dramatic cost reductions, time efficiencies, improvements to customer services, and reinventing core business principles (like those in the airline industry)

BPR Objectives

• Cost reduction
• Time reduction
• Enhanced Customer service
• Business rule reinvention (e.g., airline industry)
• Customer satisfaction
• Organisational Learning

BPR Challenges

• Resistance from employees
• Traditional ways of working
• Time requirements
• Cost implications
• Possible job losses

Six Key Steps of Business Process Reengineering

• Define Business Processes (Map existing ones)
• Analyze Business Processes (Identify discrepancies)
• Identify and Analyze Improvement Opportunities
• Design Future State Processes (Develop new models)
• Develop Future State Changes (Implement new processes)
• Implement Future State Changes (Execute changes)