ERP: Systems Diagramming and the Process Map PDF

# MODERN ERP ## Select, Implement & Use Today's Advanced Business Systems ### Second Edition #### Chapter 4: ERP: Systems Diagramming and the Process Map # Systems Documentation - Basic Purposes for Systems Documentation 1. Describing business processes 2. Assessing internal control proce...

# MODERN ERP ## Select, Implement & Use Today's Advanced Business Systems ### Second Edition #### Chapter 4: ERP: Systems Diagramming and the Process Map # Systems Documentation - Basic Purposes for Systems Documentation 1. Describing business processes 2. Assessing internal control procedures 3. Evaluating, designing, or changing information systems - Systems Diagram - a graphical representation of systems - Flowcharts - ER Diagrams - Other techniques # Importance of Systems Diagramming - A recent study found that 72% of private and 82% of public companies have increased emphasis on reading or preparing systems documentation since the passage of the Sarbanes-Oxley Act of 2002. - A 2006 research study found that: - The ability to read systems diagrams was "very important" or "somewhat important" - 77% - The ability to prepare systems diagrams was "very important" or "somewhat important" - 66% # Process Maps - A process map, also known as a cross-functional flowchart, is used by many organizations seeking to document, analyze, streamline, and redesign business activities. - Benefits: - Defining the "as is" business process and clarifying the changes necessary to transform the present process into the "to be" process - Determining whether "as is" measures are appropriate - Promoting awareness of employees' responsibilities - Showing the impact a certain role's performance has on upstream and downstream activities in the process - Highlighting workflow inefficiencies - Identifying opportunities to streamline and improve processes - Pinpointing internal controls that need to be tested during an audit # Process Map Symbols - Activities (or events): transform inputs into outputs - Decision points: yes/no (positive/negative) outcome that depicts the alternatives - Process flow lines: connect symbols and are labeled with the type of information flowing into or out of the activities - Data stores: support the process - Termination: points at which the process ends - On-page connector: reduce clutter on a page - Off-page connector: when processes span multiple pages # Gathering Information for a Process Map - Group interview method - all people involved in the process are interviewed as a group - Employs a skilled facilitator to promote and focus the discussions, questioning conventional wisdom and providing an unbiased, objective point of view - One-on-one interview method - each person involved in the process is interviewed separately - Less effective than the group interview method - Walkthrough - physically reviewing a process in scope - To confirm if a documented process is accurately reflecting current workflow # Guidelines to Developing a Process Map - Have a defined purpose for mapping a process and explain it to those participating - Identify the scope of the process - Determine the roles participating in the process - Roles become horizontal bands called **swim lanes** - Determine the **trigger**, the event that must occur to get the process started - The trigger should be in the first swim lane - Events should move left to right/top to bottom to indicate the passage of time - The information being exchanged is entered on the process flow lines - Decision descriptors should end with a question mark, and the process flow lines coming out of the decision are labeled with outcomes - The last swim lane is reserved for the information systems that support the process # Process Map Example - The image shows an example of a process map for "Electric City Order Fulfillment" and includes the following roles: Customer, Sales clerk, Stockperson, and MTS900. - It shows an example of a flow for a customer who wants to purchase an item and includes details like order form, item inspection, cash or credit, and more. # Hints for Constructing Process Maps - Make sure every area of the map contains approximately the same amount of effort - Start with a high-level process map, then use a detailed documentation worksheet to back up activities - Take notes while mapping and create a glossary of acronyms - Use humps when flow lines intersect on the process map - Allow swim lanes to retain the same role throughout the map even if the map spans multiple pages - Terminate the process in the swim lane where the process ends # Advanced Process Map Example - The image shows an example of a process map for "Monster Furniture Warehouse Order to Cash Process," but only includes a part of the full map. - It shows the process map with multiple roles involved, like customer, salesperson, shipping, cashier, and more. - The map shows multiple activities for each role and demonstrates their relationships with each other and how they interact. - It includes information about order entry, inventory, financial, and other modules. ## Process Problems to Uncover - Handoffs - (Transferring of responsibility from one role to another) - Provides the opportunity for mistakes, miscommunications, and delay - Bottlenecks - (A number of process flows lead to a single activity) - Limit the performance or capacity of the entire system, delaying or completely stopping the process - Rework - (People spending time fixing errors or remediating problems) - Role ambiguity - (People not knowing what they are responsible for and others do) - Eliminating confusion among the participants in the process - Data duplication - (Flows that point to and from information systems can be analyzed, to identify the extent to which the necessary data and the activities that create or use the data can be shared among the organization's many processes) ## Process Problems to Uncover Issues - Cycle time - (The time consumed during process flow from start to finish...how long is it and how long should it be?) - Should be at the heart of performance measurement - Flow time - (Time between activities can be measured to identify substantial contributors to delay and underutilization) - Non value-added steps - (Looking at processes from the customer's point of view provides focus on roles or activities that add little or no value) - Unnecessary or repetitive steps - (Process flows that dead end with suboptimal results or wind back around to the same event or role a number of times) ## Process Decision Issues to Uncover - Authority ambiguity - (Clearly defines who owns the decision) - Eliminate a potential source of confusion - Decision necessity - (When decision point output flows lead toward the same or similar events, the process may include unnecessary decisions that may generated unwarranted delays) - Decisions too early - (When decision point output flows continue for a long time before encountering subsequent events, the decision point may, in fact, be made too early) - Leads to unnecessary downstream complications - Decisions too late - (When decision point output flows lead to errors or rework, decision points might need to be moved to earlier to provide quality assurance or confirmation of customer satisfaction and eliminate costly remediation) # Developing the "To-be" Process - Who is the customer? What is the customer willing to pay for? What does the customer receive? - What level of performance does the customer expect? How well are we satisfying the customer? How can we increase customer satisfaction? - What is our first interaction with the customer that starts the process? Where do our processes end and which endings are optimal? - What are the most important value-added steps? - What activities are in scope that we can change and what activities are out of scope that we cannot change?