Process Modelling, Process Improvement & ERP Implementation PDF
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These lecture notes cover Enterprise Resource Planning (ERP). They discuss process modelling techniques, including flowcharts and swimlane diagrams. The document also explains value analysis and methods for process improvement. Including business process reengineering concepts.
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Enterprise Resource Planning Process Modelling, Process Improvement, and ERP Implementation 1 Objectives Use basic flowcharting techniques to map a business process Develop an Event Processing Chain (EPC) diagram of a basic business process Evaluate...
Enterprise Resource Planning Process Modelling, Process Improvement, and ERP Implementation 1 Objectives Use basic flowcharting techniques to map a business process Develop an Event Processing Chain (EPC) diagram of a basic business process Evaluate the value added by each step in a business process Develop process improvement suggestions 2 Process Modelling Business processes are complex, and require people with various skills and abilities to work in a cooperative fashion Processes will not be efficient and effective unless: They are clearly defined Individuals are adequately trained in their roles Individuals understand how their roles fit in the overall process Use tools such as flowcharting or process mapping to describe business processes so that everyone involved in the process can understand the process 3 Flowcharting process models Flowcharts are the simplest process models Originated with computer programmers and mathematicians A flowchart is a clear, graphical representation of a process from beginning to end Flowcharts have been applied to business processes since the 1960s Process mapping is flowcharting, applied specifically to an existing business process 4 Flowcharting process models A range of symbols can be used, but only 5 graphical elements are needed to map a process 5 Extensions of Process Mapping Hierarchical Modeling is a process of describing processes in greater or lesser detail With complicated processes, it is frequently desirable to start with a general description of the process, then define different steps in more detail Deployment flowcharting or swimlane flowcharts are useful in clearly displaying the business process 6 Hierarchical modelling a modeling approach in which one activity in a model represents entire process. These processes are defined themselves as models in separate chart files which are linked to the activities representing them. A model that is linked to an activity in another model is referred to as a submodel. 7 A hierarchical modeling methodology has the following advantages: focus attention on smaller, more manageable components of a process step. If a component is still too complicated, it can be further divided into smaller components until each module is of manageable size. reduces the risk of forgetting details of more complex modules, and confusing the interactions between modules. Provided interactions are carefully defined in advance, several modelers can work simultaneously on a modeling and simulation project, since they can each work on different submodels. It is easy to implement changes and corrections, as they should be made in one or a few simple submodels. The modularly developed model is extremely convenient for documentation purposes. 8 Swimlane process map used to visualize and communicate processes and their components. is a type of flowchart or process flow diagram that outlines a process from start to finish. Aka cross-functional flowcharts because they organize the relationships between functions or departments involved in all the process steps. Mirroring the lanes of a swimming pool, swimlane diagram uses horizontal or vertical lanes to divide a process into sections. This helps illustrate who is in charge of each set of steps or actions. enable team members to understand their roles and responsibilities more clearly and make way for better collaboration between departments. https://venngage.com/blog/swimlane-templates/ 9 Deployment, or swimlane process diagram has the advantage of clearly identifying each person’s tasks in the process 10 Why use Swimlane? Project managers can use a swimlane diagram to elaborate the steps of a complex project and assign the tasks required for its completion. Swimlane diagrams are typically used for projects that cover different departments in order to clearly distinguish the objectives of each department and the individuals within. By using a swimlane diagram, can promote better communication between departments and help teams work together more easily and efficiently. 11 Class activity #1 (30 mins) Lets revisit Tutorial 8 Draw a flowchart and swimlane diagram of the recruitment process for ABC Company 12 Class activity #1 (30 mins) Sarah, the manager of the Marketing Department at ABC Company, identifies a need for a Digital Marketing Specialist to support the team's growing workload. She submits a hiring request to the HR department, outlining the position requirements, such as proficiency in SEO, social media marketing, and Google Analytics. The HR team reviews Sarah's hiring request and conducts a job analysis to gain a comprehensive understanding of the Digital Marketing Specialist role. They identify the key responsibilities, required skills, and qualifications needed for the position. Based on the job analysis, HR creates a job posting that highlights the job description and desired qualifications. The posting is shared on the company's website, popular job boards, and relevant social media platforms to attract potential candidates. After a week of posting the job, the HR team receives numerous resumes from interested candidates. They begin the resume screening process and shortlist candidates who possess relevant experience, qualifications, and skills in digital marketing.The shortlisted candidates are invited for the first round of interviews. Sarah and the HR representative conduct face-to-face interviews to assess the candidates' technical knowledge, creativity, and cultural fit within the team. The interviews focus on understanding the candidates' experience in running successful digital marketing campaigns and their familiarity with the latest industry trends. Following the initial interviews, the top candidates are asked to complete a skills assessment. They are given a hypothetical digital marketing scenario and asked to develop a comprehensive strategy, including campaign objectives, target audience, and marketing channels. Impressed by the skills assessment results, Sarah and the HR team proceed with conducting reference checks for the final candidates. They reach out to their previous employers or professional contacts to verify their work ethic, performance, and overall suitability for the position. Additionally, background checks are conducted to ensure the candidates have a clean record. Sarah, together with HR and other relevant stakeholders, reviews the interview feedback, skills assessment results, and reference checks. After careful consideration, they select the most qualified candidate, Emily, who has a strong track record in digital marketing, excellent communication skills, and a proven ability to drive results. Sarah and the HR team extend a job offer to Emily, outlining the salary, benefits, and start date. 13 Event Process Chain (EPC) Diagrams EPC format uses only two symbols Events : represent a state or status in the process Functions SAP has developed EPC representations for many of the business processes its software supports Using ARIS: Architecture of Integrated Information System EPC software enforces an event-function-event structure. What is Event-Driven Process Chain (EPC)? (visual- paradigm.com) 14 EPC software enforces an event-function-event structure. Basic EPC Diagrams Solution | ConceptDraw.com EPC component 15 Simple EPC diagram EPC Diagrams follow an event-function- event structure EPC Diagrams must begin and end with events Branching is done with three types of connectors: AND OR XOR (exclusive OR) A simple EPC diagram for part of the Fitter Snacker expense report process. 16 OR connector 17 AND CONNECTOR 18 XOR CONNECTOR 19 OR with two triggering events 20 Possible connector and triggering combinations 21 Splitting and consolidating process paths 22 EPC diagram with organizational and data elements 23 Class Activity #2 (30 mins) As part of the Human Resources department in your organization, you are tasked with streamlining the recruitment process using an Event-driven Process Chain (EPC). The recruitment process involves the following key steps: 1. Job Posting 2. Application Submission 3. Initial Screening 4. Scheduling Interviews 5. Conducting Interviews 6. Final Decision (Hire or Reject) 7. Job Offer and Acceptance (if hired) By using the concept of XOR (exclusive OR) from process chains, please design an EPC that clearly shows the flow of events, functions, and decision points for this recruitment process. Instructions: Be sure to use XOR to represent decision points, especially where only one path (either hire or reject) can be taken. Include at least one event, function, and connector symbol (such as XOR) in your process chain. Submit your process diagram along with a brief explanation of each step involved. 24 Process Improvement Task of completing a process map requires a team of key personnel and frequently uncovers process improvement opportunities Value Analysis is a technique that evaluates the value added by each activity in the process Activities can added: Real value: something the customer will pay for Business value: helps the company run its business No value: an activity that should be eliminated 25 Sample value analysis Activities that cost more than their value added should be improved. The Fitter Snacker expense report process DOES NOT provide real value, because Fitter Snacker’s customers do not care whether sales employees receive prompt and accurate reimbursement of their business expenses. The expense report process DOES provide business value, and it should provide this value at a minimum cost (helps the company to run the business/reduce cost etc) Determining the value of a good or service is easy—it’s what someone is willing to pay for it. Applying this idea to a part of a business process is more challenging, because parts of a process can’t be “sold” on the open market. evaluating each activity on the basis of value provided can highlight opportunities for improvement. 26 Process improvement companies ask the following questions about their business processes to identify areas for improvement: - Are there unnecessary checks and balances? - Does the activity inspect or approve someone else’s work? - Does it require more than one signature? - Are multiple copies required? - Are copies stored for no apparent reason? - Are copies sent to people who do not need the information? - Is there unnecessary written correspondence? H. James Harrington, Business Process Improvement 27 Process improvement (cont) companies ask the following questions about their business processes to identify areas for improvement: - Are there people or agencies involved that impede the effectiveness and efficiency of the process? - Do existing organizational procedures regularly impede the efficient, effective, and timely performance of duties? - Is someone approving something they already approved (for example, approving capital expenditures that were approved as part of a budget)? -Is the same information being collected at more than one time or location? H. James Harrington, Business Process Improvement - Are duplicate databases being maintained? 28 Concepts that can be used to improve processes Perform activities in parallel, for example, approvals. Change the sequence of activities. Reduce interruptions. Avoid duplication or fragmentation of tasks. Avoid complex flows and bottlenecks. Combine similar activities. Reduce the amount of handling. Eliminate unused data. Eliminate copies H. James Harrington, Business Process Improvement 29 Business Process Engineering is a dramatic change and dramatic improvements. can only be achieved through overhaul the organization structures, job descriptions, performance management, training and the most importantly, the use of Information Technology. 30 Objectives of BPR 1.To dramatically reduce cost. 2.To reduce time requirements. 3.To improve customer services dramatically. 4.To reinvent the basic rules of the business e.g. The airline industry. 5.Customer satisfaction. 6.Organizational learning. 31 Challenges faced by BPR process The companies that have start the use of BPR projects face many of the following challenges : 1.Resistance 2.Tradition 3.Time requirements 4.Cost 5.Job losses 32 The Six Key Steps of Business Process Reengineering 1. Define Business Processes. Map the current state (work activities, workflows, roles and reporting relationships, supporting technology, business rules, etc.). 33 The Six Key Steps of Business Process Reengineering 2. Analyze Business Processes. Identify gaps, root causes, strategic disconnects in the context of improving organizational effectiveness, operational efficiency and in achieving organizational strategic objectives. 34 The Six Key Steps of Business Process Reengineering 3. Identify and Analyze Improvement Opportunities. Identify, analyze and validate opportunities to address the gaps and root causes identified during analysis. This step also includes identifying and validating improvement opportunities that are forward facing – often strategic transformational opportunities that are not tethered to current state process. 35 The Six Key Steps of Business Process Reengineering 4. Design Future State Processes. Select the improvement opportunities identified above that have the most impact on organizational effectiveness, operational efficiency, and that will achieve organizational strategic objectives. Make sure to select opportunities for which the organization has the budget, time, talent to implement in the project timeframe. Create a forward-facing future-state map that comprehends the selected opportunities. 36 The Six Key Steps of Business Process Reengineering 5. Develop Future State Changes. Frequently overlooked (and a key root cause in failed BPR initiatives), this is where the above opportunities are operationalized before implementation. New workflows and procedures need to be designed and communicated, new/enhanced functionality is developed and tested, etc. Changes and opportunities cannot be implemented until they are operationalized. 37 The Six Key Steps of Business Process Reengineering 6. Implement Future State Changes. Classic implementation based on dependencies among changes/opportunities, change management, project management, performance monitoring 38 Thank you 39