Modern ERP: Systems Diagramming & Process Mapping

Modern ERP: Systems Diagramming and Process Mapping

• Systems Documentation has three basic purposes: describing business processes, assessing internal control procedures, and evaluating/designing/changing information systems.
• Systems Diagrams graphically represent systems, including flowcharts, ER diagrams, and other techniques.
• Importance of systems diagramming: A recent study highlighted increased emphasis on reading and preparing systems documentation for 72% of private and 82% of public companies since the Sarbanes-Oxley Act of 2002. A 2006 study found that 77% considered the ability to read system diagrams "very important" or "somewhat important," and 66% felt likewise about the ability to prepare such diagrams.

Process Maps

• A process map, also called a cross-functional flowchart, documents, analyzes, streamlines, and redesigns business activities.
• Benefits:
  • Defines the "as is" process and clarifies changes needed for the "to be" process.
  • Determines if "as is" measures are appropriate.
  • Promotes awareness of employee responsibilities.
  • Shows the impact of a role's performance on upstream/downstream activities in the process.
  • Highlights workflow inefficiencies and opportunities for improvement.
  • Pinpoints internal controls needing audit testing.

Process Map Symbols

• Activities (events) transform inputs into outputs.
• Decision points represent yes/no outcomes, depicting alternatives.
• Process flow lines connect symbols, labeled to show information flow.
• Data stores support the process.
• Termination points mark the end of the process.
• On-page connectors reduce clutter, used when processes are on a single page.
• Off-page connectors manage processes spanning multiple pages.

Gathering Information for a Process Map

• Group interview method: All process participants are interviewed together using a skilled facilitator to promote unbiased discussions that question conventional wisdom.
• One-on-one interview method: Less effective than group interviews because each person is interviewed individually.
• Walkthrough: A physical review of the process scope to confirm if the documented process accurately reflects the current workflow.

Guidelines for Developing a Process Map

• Define the purpose and explain it to participants.
• Identify the process scope.
• Determine participating roles and assign them to swim lanes (horizontal bands).
• The trigger event initiates the process (first swim lane).
• Events move from left-to-right or top-to-bottom chronologically.
• Information exchange details are on the flow lines.
• Decision points end with a question mark, outcomes labeling flow lines emerging.
• The last swim lane accommodates information systems supporting the process.

Process Map Example

• Example of an electric city order fulfillment process map. (a diagram of the specific steps)

Hints for Constructing Process Maps

• Maintain consistent effort level across the map.
• Start with a high-level map and use detailed documentation for activities.
• Create glossary of process acronyms.
• Use humps where flow lines intersect.
• Maintain consistent role assignments (swim lanes) even across multiple pages.
• Terminate the process in the final swim lane.

Advanced Process Map Example

• Examples of Monster Furniture warehouse order-to-cash process maps (diagrams). (two pages)

Process Problems to Uncover

• Handoffs: Transferring responsibility can lead to mistakes, miscommunication, and delay.
• Bottlenecks: Multiple flows converging to a single activity can limit system performance and delay processes.
• Rework: Time spent fixing errors during processes.
• Role ambiguity: Lack of clarity on roles/responsibilities leads to confusion among participants.
• Data duplication: Excessive flows between information systems can mean unnecessary data exists in multiple places.
• Cycle time: measuring the time consumed during process flow from start to finish.
• Flow time: measures time between activities, identifies delays and underutilization.
• Non-value-added steps: customer workflow is examined. Unnecessary or repeated steps are often problematic.

Process Decision Issues to Uncover

• Authority ambiguity: Defining who has decision-making authority.
• Decision necessity: Avoid unnecessary decisions that lead to delays in the process.
• Decisions made too early/too late: potential errors.

Developing the "To-be" Process

• Identifying the customer, their needs, and willingness to pay.
• Determining performance expectations and satisfaction levels.
• Defining process start and end points (optimal).
• Identifying crucial/added-value process steps.
• Deciding/differentiating what can be changed (in scope) from what cannot (out of scope).