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I attached the powerpoint about how to draw a processing map and the assignment instruction. Use the https://www.draw.io/ to draw the map.
MODERN ERP
SELECT, IMPLEMENT, & USE TODAY’S ADVANCED BUSINESS SYSTEMS
CHAPTER 4:
ERP and Process Mapping
3rd Edition
1
Objectives
Recognize the importance of process mapping
Understand the difference between “as is” and “to be” business processes
Become familiar with process map symbols
Distinguish among the various roles used in process mapping
Know the steps involved in mapping a business process
2
2
Systems Diagrams
Systems diagram (SD) – graphical representation of a system; system – a group of parts that are connected and work together
SD used in business to:
Describe business processes
Assess internal control procedures
Evaluate, design, or change information systems
3
3
The Process Map
Process map – a graphical technique that documents inputs, outputs, activities, and decision points to show step-by-step procedures for a specific business process (also known as cross-functional flowchart or swim lane diagram)
“As is” process map – shows how the process is currently operating; useful for developing requirements for ERP system
“To be” process map – a visual representation of the redesigned process; ERP vendors supply the map
Role – the party responsible for an activity in the process; can be an internal or external entity
4
Process Map Symbols and Descriptions
5
Benefits of Process Mapping
Defining the “as is” business process and clarifying the changes for the “to be” process; planning for ERP
Determining whether “as is” measures of performance are appropriate and potentially developing new performance measures for the “to be” process
Identifying responsible parties
Highlighting workflow inefficiencies, such as bottlenecks
Understanding where internal controls are or dictating where they should be
Orienting and training new employees or retraining
Serving as an integral part of the company’s policies and procedures documentation
6
Gathering Information for the Process Map
Self-generate method – used when the preparer personally knows the process
One-on-one interview method – each person involved in the process is interviewed separately and sequentially
Group interview method – everyone involved in the process is asked to participate as a group to generate the process map
Usually the most effective method
7
Process Mapping Roles
Process map facilitator – promotes and focuses the discussions and provides an unbiased, objective point of view
Process owner – responsible for the proper completion of process steps and has authority over the process, its interfaces, and changes that will take place to the process
Subject matter expert – knows the process intimately, providing knowledge and expertise
Process implementer – executes recommendations and implements changes (new procedures, systems)
Process evaluator – tests the “to be” process and implementation change. Helps determine new metrics for the evaluation of the “to be” process
8
Steps for Drawing Process Maps
Have a defined purpose for mapping a process and explain it to the group
Identify the scope of the process, without being too broad. Label the scope at the top of each page
Agree on the level of detail to be displayed
Determine the roles participating in the process. These roles are shown as bands across or down the page and are called swim lanes. Swim lanes organize activities into groups based on who is responsible for the steps
Identify the trigger activity – the event that denotes the start of the process. For horizontal maps, the trigger activity should be placed in the top swim lane all the way to the left
Organize the process map so that activities move either to the right, down, or up. Avoid connectors that move to the left
9
Steps for Drawing Process Maps
Use active verbs for activity descriptions such as “enter,” “inspect,” or “input.” Activities such as “send” and “receive” can generally be excluded because these activities are represented by the process flow lines
Do not combine steps in an activity using the word “and” to connect more than one verb or action
Write a description of the data or information flow on the process flow line. Sometimes the flow may be a physical flow
Ask questions within the decision points. Label the decision branches with outcomes (for example, “yes” or “no”). Put decision points in the swim lane of the role making the decision
Capture information concerning which information systems of ERP modules support the process
10
Tips for Drawing Professional Process Maps
11
Process Map Example – Electric City
12
Electric City Process Map – Extensions
Business processes can be expanded to show greater detail at lower levels
Greater detail is more likely to identify potential issues
13
Fit Gear Bi-Weekly Payroll Narrative
Fit Gear plant employees use a timecard machine to clock in and clock out during a two-week period. At the end of the second week, the receptionist collects the timecards from the plant and makes sure she has the correct number of cards (75 cards for 75 employees) and that they are complete (for example, did someone forget to clock out?).
If there appears to be a problem, she tries to resolve it with the employee. She then corrects the timecard for the employee and gives the timecard data to the plant supervisor. The plant supervisor signs off on hours for all plant employees and returns the cards to the receptionist. The receptionist then enters the time for each employee into an Excel spreadsheet, which is emailed to the payroll clerk.
The payroll clerk enters the bi-weekly time (including sick, vacation, and leave) into the TEMS Payroll System. The payroll clerk also enters any updates to the HR master data (for example, change in address, change in exemptions) into the system.
The payroll clerk prints a payroll register and reviews for correctness. If there are errors, he resolves them in the system. Next, the payroll register is reviewed by the HR manager for correctness. If she finds additional issues, the payroll clerk resolves them in the system as well. The payroll clerk then prints paychecks, and the receptionist distributes them to the plant employees.
14
Advanced Process Map Example –
Fit Gear
15
Advanced Process Map Example –
Fit Gear
16
Process Issues and Suggested Process Redesigns for Fit Gear
Cycle time could be improved by using self-service for HR master data updates
Payroll clerk should not enter HR master data updates. SoD violation.
It is inefficient to use a manual time card system and then re-enter the time into the TEMS system. Data should be captured once at its source.
Receptionist is performing manual steps and rework; Also there are handoffs
Printing and distributing manual paychecks can lead to internal control problems; old ways
The old way of processing payroll is inefficient.
The payroll clerk does not need an approval from the HR manager. This is SoD violation. This is a non-essential quality control step. Clerk should be empowered to make decisions.
17
Figure 4-1: Process Map Symbols and Descriptions
Activity Activities are depicted in process maps with rectangles.
Every process has a series of steps (both value-added and non-value-added)
that help transform inputs into outputs.
Decision point Decisions points are depicted with diamonds.
Processes may involve choices that result in different outcomes.
Process flow line Directional arrows connecting symbols show the flow of data, information,
or physical goods.
Start/Stop An oval should both designate the trigger to the process and any Phase Often, a process may involve multiple sub -processes that need to be visually On-page Off-page Figure 4-2: Tips for Drawing Professional Process Maps Make sure every area of the map contains approximately the same amount of detail. Figure 4-3: Electric City Order-to-Cash Process Figure 4-4: Detailed Documentation for Deliver Item to Sales Counter Figure 4-6: Fit Gear Bi-Weekly Payroll Process for Plant Employees (Page 2) JOURNAL OF EMERGING TECHNOLOGIES IN ACCOUNTING American Accounting Association 169 –188
Using Process Mapping to Reveal Process Marianne Bradford Gregory J. Gerard ABSTRACT: The objectives of the Elizor Case are to give students experience with Keywords: enterprise resource planning (ERP) systems; business process improve- INTRODUCTION
E located in North Carolina and South Carolina and more than 250,000 square feet of warehousing Elizor recently has experienced a great deal of growth and is in the process of expanding its Published Online: August 2015 Email: ggerard@business.fsu.edu
169 ensure their business processes are as effective and efficient as possible (e.g., non-value-added steps ! long cycle times for key business processes, including raw materials purchasing; Over time, Elizor’s processes have developed organically, with very little attention to Elizor’s top management has formed an ERP project team, which will play a critical role in the The ERP project leadership team is made up of Elizor’s most valuable and knowledgeable Joe and Martha will begin documenting current ‘‘as is’’ processes, engaging key business An ERP system implementation can bring radical, dramatic changes to processes, known as Joe and Martha also have experience with process mapping, but realize that it is important to 170 Bradford and Gerard
Journal of Emerging Technologies in Accounting negatively affected customer satisfaction. The longer it takes to get raw materials to the plant, the Below is the narrative that Joe and Martha compiled after a lengthy group interview session in Elizor’s Raw Materials Purchasing Process
The manufacturing supervisor in Durham enters purchase requisitions into the EPT system, which When the raw materials arrive, they are inspected for quality by the receiving department. If the Purchasing clerks receive supplier invoices in a variety of ways, but the process after receipt is Next, accounts payable clerks will assign GL account numbers (to show the increase in inventory REQUIRED
Requirement 1: ‘‘As Is’’ Process Map
Using standard process mapping symbols and referring to the example process map presented Using Process Mapping to Reveal Process Redesign Opportunities during ERP Planning 171
Journal of Emerging Technologies in Accounting mgarv mgarv mgarv draw the map by hand. Include phase symbol(s) to separate distinct phases in this process and label. mgarv mgarv dx.doi.org/10.1108/14637150510578719 dx.doi.org/10.2308/accr.2007.82.5.1119 dx.doi.org/10.1016/S0167-9236(02)00132-X Jacka, M. J., and P. J. Keller. 2011. Business Process Mapping: Improving Customer Satisfaction. 2nd dx.doi.org/10.1016/j.ijpe.2004.05.024 http://www.processmaps.com/mapping.html http://www.processmaps.com/mapping.html dx.doi.org/10.1016/S0272-6963(96)00100-3 dx.doi.org/10.1016/S0272-6963(96)00100-3 dx.doi.org/10.1108/14637150810915973 dx.doi.org/10.1108/01443570310467339 dx.doi.org/10.1108/01443570310467339 http://www.tradewindsgroupinc.com/Tradewinds_Business_Process_Improvement_White_Paper http://www.tradewindsgroupinc.com/Tradewinds_Business_Process_Improvement_White_Paper which do not, and where there may be non-value-added steps, costs, or control issues (Tradewinds package selection stage, it would be critical to know that an organization ships line items on a FIGURE 2 implementation, then there is a shift to a new way of thinking. Rather than focusing narrowly on Business Process Improvement of a process. The BPI team should also document the ‘‘as is’’ process so that everyone involved Table 2 lists common issues found in business processes that can result in non-value-added TABLE 3
termination points. There may be multiple termination points if decisions
exist in the process.
separated to distinguish them.
connector
When the visual appeal of the map is marginalized, on-page connectors,
represented as circles, are used to reduce clutter. These circles are cross –
referenced using the same letters of the alphabet.
connector
When the process map spans multiple pages, a n off-page connector is
used. These connectors are cross-referenced using page numbers.
Take notes while mapping and create a glossary of acronyms so that information generated in the process
mapping session is not lost or later becomes ambiguous.
Ensure that swim lanes retain the same role(s) throughout the map even if the map spans multiple pages.
Terminate the process in the swim lane where the process ends.
Make similar shapes the same size.
Try to collocate those swim lanes that have the greatest number of interactions with each other.
Avoid using names of individuals in process maps as people can come and go. Roles remain more consistent.
Minimize space between symbols. Also, ensure that spaces between symbols are as uniform as possible.
Date August 25
Process Owner Warehouse
Customer Sales Clerk
Step Instructions
1 Retrieve picking ticket from sales clerk .
2 Using MTS900, enter item number into item number field; determine availability of item.
3
If item is not in stock, notify sales clerk. Otherwise, locate and retrieve item using bin
location in warehouse system.
4
Tape picking ticket to item and place on carousel “A” for heavy items, carousel “B” for light
items.
Dependencies Warehouse system
Inputs Picking Ticket
Outputs Item to Sales Clerk
Figure 4-5: Fit Gear Bi-Weekly Payroll Process for Plant Employees (Page 1)
Vol. 12 DOI: 10.2308/jeta-51253
2015
pp.
Redesign Opportunities during ERP Planning
North Carolina State University
Florida State University
business process analysis by requiring them to first document an ‘‘as is’’ raw materials
purchasing process during the planning for an enterprise resource planning (ERP)
system implementation and then to have students determine issues inherent in the
process that will necessitate process redesign. Students will learn the difference
between two types of process redesign—business process reengineering (BPR) and
business process improvement (BPI)—synthesize this knowledge in order to identify
process issues inherent in the case, and suggest process redesigns that an ERP system
will need to provide so that the purchasing process is more efficient, effective, and
controlled. The case has broad appeal for faculty teaching ERP systems and/or business
process management.
ment; business process reengineering; process mapping; purchasing
process; expenditure cycle; case study.
lizor Co. (‘‘Elizor’’) is a mid-sized manufacturer of modern office furniture, specializing in
chairs, desks, sofas, and cubicle spaces. The company was founded in 1970 and employs
375 people, primarily at its Durham, NC manufacturing facility. It also has six showrooms
and storage space. Elizor has also established a customer-facing web presence for business-to-
business (B2B) sales and is considering e-commerce solutions for its suppliers. Their mission is to
‘‘produce such amazing office furniture you’ll never want to leave work.’’
production and storage capacity and adding a new line of ergonomic office furniture. Because of
this, management is interested in obtaining an understanding of its current business processes and
existing functionality because they want to implement an enterprise resource planning (ERP)
system in the near future. They believe an ERP system will help them solve their current problems,
Corresponding author: Gregory J. Gerard
are minimized), and maintain better internal controls over operations. Current business issues Elizor
faces are:
! desire for growth, in particular the launch of a new product line;
! need for advanced functionality and technologies; and
! too many outdated business systems supporting business processes.
optimization. Additionally, since the early 1990s, Elizor has used various information systems to
support its core business processes, such as the raw materials purchase-to-pay process. Two systems
support this process: CODE, a financial accounting system that maintains the general ledger (GL),
accounts payable/cash disbursements, accounts receivable/cash receipts, and produces the financial
statements; and EPT, a procurement system that handles vendor management, inventory
management, purchase requisitions, and purchase orders.
success of the ERP project. This team includes process owners, end-users, managers, and IT staff,
who span functional boundaries, locations, and organizational levels of the company. One of the
first tasks in planning for an ERP system implementation is to document the ‘‘as is’’ processes to
help determine requirements for a new ERP system and identify current process ‘‘pain points’’ that
the ERP system should rectify or that could be rectified prior to implementation.
employees—the ‘‘best and brightest,’’ including Joe Wall from purchasing and Martha Long from
accounting. Both of these individuals have ERP implementation experience at previous employers
and are considered by management to be employees who will likely embrace organizational and
procedural change, influence others in a positive way, and work well with others. These individuals
were also chosen because management believes they have a clear understanding of the relationship
between the operational requirements of the business, corporate strategy, and customer satisfaction.
process owners to brainstorm ways to improve key business processes, and incorporating these
ideas into new ‘‘to be’’ processes that will be supported by the new ERP system. Thus, Joe and
Martha will be responsible for planning, organizing, leading, and managing the business process
documentation stage of the project.
business process reengineering (BPR), which involve major overhauls of processes to achieve
breakthrough performance. Companies must reengineer to match the best practices programmed in
the ERP software—the software dictates the way processes will be conducted. Other changes to the
processes may be more incremental, depending on how closely current processes line up with the
new ERP system. This type of change is known as business process improvement (BPI), which is a
relatively minor change compared to BPR but still very effective. Elizor will likely experience
massive changes to their business processes when implementing the ERP system (BPR), but will
also tweak processes prior to the implementation (BPI). BPI is also something that is done
throughout the operation and maintenance stage of an ERP system to further fine-tune business
processes.
determine process mapping standards so that there is consistency in how the process maps are
drawn (see Appendix A for their process mapping standards and conventions). One of the first
processes that Joe and Martha chose to map out is the raw materials purchasing process. This
process has been fraught with inefficiencies for years, including a long cycle time, which has
Volume 12, 2015
longer it takes for customers to ultimately receive their orders. In addition, Elizor’s mission of
producing ‘‘amazing office furniture’’ places utmost importance on purchasing high-quality raw
materials. In the past, Elizor has received inferior materials from its suppliers.
which manufacturing, purchasing, accounts payable, receiving, and warehouse employees were
interviewed together in order to arrive at a consensus on the process steps. Joe and Martha chose the
group interview method because it can be more accurate than other methods given that all
stakeholders of the process steps have to simultaneously agree on how the process currently works.
Additionally, the high degree of participation that this method requires generally increases the
ownership that the group feels regarding the redesigned process map and, more importantly, the
business process.
triggers emails to the purchasing clerks. The purchasing clerks read the emails and decide whether the
request is for a known or unknown part. If what is needed is a known part, and there is a preferred
supplier for the material in the EPT system already, then a purchasing clerk emails a purchase order
(PO) to the supplier for the item(s) requested. If what is needed is not a known part, then a purchasing
clerk sets up a new part in the EPT system and performs traditional new vendor sourcing activities to
determine an appropriate supplier for the material. Once these steps are complete, a purchasing clerk
emails a PO to the chosen supplier. If no supplier exists for a known part, then a purchasing clerk must
still perform sourcing activities and send the PO to the newly identified supplier.
quality is deemed substandard, then the goods are immediately sent back to the supplier. The raw
materials passing quality inspection are then sent to the warehouse employees who count them for
accuracy and prepare a receiving report. Warehouse employees then decide where a good place to
store the materials in the warehouse might be and send the receiving report to the manufacturing
supervisor as proof the raw materials have been received. The manufacturing supervisor will then
sign the receiving report as confirmation the material has been received.
always the same. First, they check each invoice for accuracy against the PO and make sure the
appropriate pre-negotiated discounts and payment terms are included (e.g., 2/10 n 30). If there are
any issues, they consult the supplier and make the corrections. The clerks then send the corrected
invoice and PO to the accounts payable clerks in the accounting department. If there are no issues,
then the supplier’s invoice is sent directly to the accounts payable clerks.
[debit] and the accounts payable [credit]) and the cost center number (e.g., what job the material
should be charged to) for management accounting purposes. Accounts payable clerks will then enter
the information into CODE and a voucher number will be automatically generated. Supporting
documentation is printed and filed in the accounts payable file folders until payment is due.
in Appendix A, draw a process map for Elizor’s raw materials purchasing process. Your instructor
may require that you use a flowcharting package, such as Microsoft Visio, or may allow you to
Volume 12, 2015
For simplicity, the supplier swim lane may be omitted.
Requirement 2: Business Process Reengineering (BPR) and Business Process Improvement
(BPI)
Using the BPR and BPI information in Appendix B (in particular Tables 1 and 2) and the
template below, list eight BPI process issues or BPR principles that need to be applied to the raw
materials purchasing process. For each of these issues, describe a redesign that could be made to the
raw materials purchasing process to improve efficiency, effectiveness, and/or internal control (two
illustrative examples have been provided in the template to help you begin). Turn in the below
template as the deliverable for this requirement.
BPR Principle or BPI Process Issue Elizor’s Process-Specific Issue
Example: BPI process issue: Paper
records; non-value-added steps
The receiving report does not need to be sent to the
manufacturing supervisor. He/she should be able to see
inventory availability in a system without a paper report.
Example: BPI process issue: Manual
steps; BPR principle: capture data
once at its source
The cost center data should be entered once in the creation of
the purchase requisition and automatically carried through to
accounts payable without data rekeying.
1.
2.
3.
4.
5.
6.
7.
8.
REFERENCES
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Available at: http://www.isixsigma.com/tools-templates/process-mapping/practical-guide-creating-
better-looking-process-maps/
Adesola, S., and T. Baines. 2005. Developing and evaluating a methodology for business process
improvement. Business Process Management Journal 11 (1): 37–46.
Andrews, C. 2007. Drawing a map of the business. Internal Auditor 64 (1): 55–58.
Bradford, M. 2015. Modern ERP: Select, Implement and Use Today’s Advanced Business Systems. 3rd
edition. Raleigh, NC: Lulu Press.
Carpenter, T. D. 2007. Audit team brainstorming, fraud risk identification, and fraud risk assessment:
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Damelio, R. 1996. The Basics of Process Mapping. New York, NY: Productivity Press.
Dennis, A., T. Carte, and G. Kelly. 2003. Breaking the rules: Success and failure in groupware-supported
business process reengineering. Decision Support Systems 36: 31–47.
Hammer, M. 1990. Reengineering work: Don’t automate, obliterate. Harvard Business Review 68 (4): 104–
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Hammer, M., and J. Champy. 1993. Reengineering the Corporation: A Manifesto for Business Revolution.
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edition. Hoboken, NJ: Wiley.
Mertins, K., and R. Jochem. 2005. Architectures, methods and tools for enterprise engineering.
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O’Leary, D. 2000. Enterprise Resource Planning Systems. Cambridge, UK: Cambridge University Press.
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Paradiso, J., and J. Cruickshank. 2007. Process mapping for SOX and beyond. Strategic Finance 88 (9):
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tradewindsgroupinc.com/Tradewinds_Business_Process_Improvement_White_Paper
APPENDIX A
Process Mapping
Introduction to Process Mapping
A business process is a collection of activities that together add value to input and transform it
to output (Harmon 2007; Paradiso and Cruickshank 2007). Business processes span multiple
departments and in many cases traverse the boundaries of the organization, sharing information
with business partners, such as suppliers and customers.
Process maps are a system diagramming method that visually illustrates the essential details of
a business process (in a way that written procedures cannot) by replacing many pages of words with
boxes and arrows.1 They provide a visual rendering of a business process from beginning to end,
including the inputs and outputs of each activity, the sequence of activities, and the person or
persons performing each activity, allowing stakeholders to ‘‘see’’ the process from start to finish
(Damelio 1996). This visualization provides a powerful way to explore what activities work well,
1 This paper uses cross-functional process mapping symbols and terminology. We acknowledge that certain instructors
may prefer other diagramming methods such as business process modeling notation, which is conceptually similar to
process mapping. Instructors could feel free to substitute their preferred method for the diagramming method we use in
this case.
Using Process Mapping to Reveal Process Redesign Opportunities during ERP Planning 173
Journal of Emerging Technologies in Accounting
Volume 12, 2015
Group, Inc. 2004). Specifically, process maps indicate:
! What is happening?
! Where is it happening?
! When is it happening?
! Who is doing it?
! How are inputs and outputs handled and distributed? (Process Mapping Associates Inc.
2007).
Process Mapping Symbols
Figure 1 describes typical process mapping symbols (Bradford 2015; Damelio 1996).
The Role of Process Mapping in ERP System Implementations
Mapping out current ‘‘as is’’ business processes can help an ERP project team develop
functional requirements for an ERP system (Andrews 2007). The ‘‘as is’’ process maps will also be
compared to the ‘‘to be’’ ERP vendor-supplied process maps to see where change will occur as the
organization reengineers to best practices in the ERP software. For example, during the ERP
FIGURE 1
Process Mapping Symbols
174 Bradford and Gerard
Journal of Emerging Technologies in Accounting
Volume 12, 2015
customer order from different plants. The ERP system must support this functionality, which might
not be evident until processes are fully mapped out. Sometimes, this exercise will generate
responses such as ‘‘Do we still do that?’’ ‘‘You mean, you guys don’t review that report after all?’’
or ‘‘Why are we doing it this way?’’ As the team reviews the ‘‘as is’’ maps, it will begin to question
‘‘why?’’ and will find many opportunities for change (Smith 2010).
Guidelines for Drawing Process Maps
The following guidelines should be followed when drawing process maps:
! Have a clear purpose for mapping a process.
! Label the scope of the process at the top of the process map.
! Determine the roles that participate in the process. These become the ‘‘swim lanes’’ across
the page.
! Identify the trigger, which denotes the start of the process. For horizontal maps, the trigger,
designated with an oval, should be placed in the top swim lane left justified.
! The page shows the passage of time, so activities should generally move left to right and top
to bottom.
! Label activities with active verbs such as ‘‘input,’’ ‘‘correct,’’ ‘‘move,’’ and ‘‘order.’’
! Enter data, information, or physical goods flowing between activities directly on the process
flow lines.
! Label decisions in the form of questions. Label process flow lines that branch out of
decisions with the outcomes (e.g., yes/no).
! When activities are performed by multiple roles, the activity should span multiple swim
lanes. (Abubakker 2010; Jacka and Keller 2011).
As an example, Figure 2 shows a narrative and a process map of the current state ‘‘as is’’ bi-
weekly payroll process for Fit Gear, a manufacturer of ‘‘fit’’ apparel. This ‘‘as is’’ process map
reflects the way Fit Gear currently conducts this process. By reviewing the process map, process
designers can pinpoint redesigns that will make the process more efficient and effective.
APPENDIX B
Business Process Reengineering (BPR) and Business Process Improvement (BPI)
Business Process Reengineering
Many companies today use ERP and other technologies to reengineer their processes. This type
of reengineering is known as technology-enabled business process reengineering (BPR)—the ERP
system or other technology serves as the ‘‘road map’’ or ‘‘engine of process automation’’ for the
reengineering initiative (O’Leary 2000; Tradewinds Group, Inc. 2004). When BPR occurs, it causes
a fundamental, dramatic redesign in business processes. Companies embarking upon an ERP
implementation generally are not changing their core competencies—the capabilities critical to a
business in achieving competitive advantage—but instead are optimizing their business processes
in order to make them more efficient and customer-centric (Hammer 1990). These companies are
striving for business processes that are streamlined, standardized, and of superior quality in order to
better serve customers, increase employee morale, and improve the company’s ability to anticipate,
manage, and respond to changes in the marketplace (Hammer and Champy 1993).
ERP systems and the reengineering that ensues facilitate the transformation of businesses from
being functional-oriented to process-oriented. If a company succeeds with an ERP system
Using Process Mapping to Reveal Process Redesign Opportunities during ERP Planning 175
Journal of Emerging Technologies in Accounting
Volume 12, 2015
Example Narrative and Process Map
(Fit Gear Bi-Weekly Payroll Process for Plant Employees)
Panel A: Narrative Describing the Bi-Weekly Payroll Process for Plant Employees at Fit
Gear
Panel B: Fit Gear Process Map Page 1 of 2
(continued on next page)
176 Bradford and Gerard
Journal of Emerging Technologies in Accounting
Volume 12, 2015
activities within functional areas (such as accounting and purchasing), users are focused on cross-
functional processes (e.g., the entire purchase to pay process) (Tønnessen 2014). ERP systems and
BPR move the company from a silo mentality to a process-centric mentality, in the hopes of reducing
costs, improving customer satisfaction, and ultimately creating shareholder value (O’Leary 2000).
Undertaking an ERP implementation and the resulting BPR is generally a complex and difficult
task, and in the past has been met with a high failure rate. Thus, organizations should not implement
ERP without a careful examination of all activities and phases of a current ‘‘as is’’ process (Dennis,
Carte, and Kelly 2003; Schniederjans and Kim 2003). These should include the process activities,
people’s jobs and reward system, the management system, and tools and technologies (Tønnessen
2014). Last, it is necessary to investigate the underlying corporate culture that holds the beliefs and
values that influence everyone’s behavior and expectations when embarking upon a BPR project
(Mertins and Jochem 2005). Hammer’s (1990) BPR principles are presented in Table 1.2
FIGURE 2 (continued)
Panel C: Fit Gear Process Map Page 2 of 2
Bradford (2015) used with permission of author.
2 Hammer’s (1990) BPR principles refer to clean-slate techniques, which does not predispose what the end solution
(technology or system) for redesigning and automating processes will be. However, these principles are relevant to
how an ERP system can benefit companies. The principles still allow for current-day technologies such as mobile
computing and cloud computing.
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Another method companies use to redesign processes to prepare for ERP (or after ERP
implementation to tweak new processes to make them even more effective and efficient) is known
as business process improvement (BPI), which is the gradual improvement to business processes
over time. Whereas BPR is radical and revolutionary, BPI is incremental and evolutionary. While
BPR is necessary for a successful ERP implementation, BPI is simply not enough. The scope and
intensity are much smaller for BPI than BPR, but the goals are very similar: strive for business
processes that are streamlined, standardized, and of superior quality in order to better serve
customers, increase employee morale, and improve the company’s ability to anticipate, manage,
and respond to changes in the marketplace (Page 2010). A general rule is that if an existing process
is somewhat close to expectations, then maybe it can be improved. If not, then maybe the current
process is fundamentally broken and radical change is necessary (Rohleder and Silver 1997).
Figure 3 presents a model for BPI. First, goals and objectives of the process improvement plan
must be identified and the appropriate organizational support must be obtained. A process
improvement team should also be assembled. The next step is to compile a process inventory,
identifying key processes, including their sub-processes and activities. A process inventory is a list
of business processes that a department or area owns. Processes can be identified by reviewing the
work done by a department, analyzing job descriptions, or talking to colleagues to ascertain their
roles and responsibilities (Adesola and Baines 2005).
From this process inventory, a list of processes in need of change can be determined and
prioritized. Those processes that have a big impact on the business and will net the largest return if
improved should be ranked first. The feasibility of making the change should also be considered.
Benchmarking with competitors can often help determine processes in need of improvement. As a
result of these steps, the first process will be selected for improvement (Samia, Siha, and Saad 2008;
Rohleder and Silver 1997).
Next, information must be obtained about the process from process owners and experts. It is
usually necessary to include knowledgeable sources from various departments for a complete view
TABLE 1
Business Process Reengineering Principles
(Hammer 1990)
1. Have those who use the output of the process perform the process (reduce or eliminate handoffs).
2. Empower workers (give employees information and they can make decisions).
3. Treat geographically dispersed resources as though they were centralized (centralize data through a
common database).
4. Link parallel activities instead of integrating their results (do not wait until the end of a process to
merge the results).
5. Organize around processes, not tasks or functional area (use ERP systems, technology, and best
practices).
6. Self-service; move cost and accountability for work to the beneficiary of a process (responsibility for
information accuracy also transfers with self-service).
7. Put the decision point where the work is performed and build controls into the process (use
automated controls in the process and transfer the responsibility for checking from management to
the worker).
8. Capture information once at its source (data should be entered one time where it originates and then
dispersed to those who need it).
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understands how the process currently works. The process documentation should be verified with
stakeholders to make sure it correctly reflects the existing process (Page 2010; Rohleder and Silver
1997).
The next step is to analyze the process to pinpoint any problems. The BPI team should also
attempt to take measurements of the process, such as costs and cycle times. It will be useful to elicit
feedback from users to make sure all problem areas are noted. Additionally, the potential benefits
from improving the process should be carefully considered (Rohleder and Silver 1997).
Once the current process has been analyzed and measured, it is time to improve the process.
The team should use brainstorming techniques (Carpenter 2007) while challenging everything. New
prototypes of process flows, policies and procedures, and reporting requirements should be
developed. The team should also consider where errors and other risks can occur in the new
process, and design internal controls, such as segregation of duties (Page 2010).
The team should also use technologies and tools to automate steps where appropriate and
create new metrics to show if the process works as planned. When implementing changes, the team
should effectively communicate with all key stakeholders about why the new process is needed,
what it is, how things will be different and better, and what will happen when the new process is in
operation. Performing a ‘‘walkthrough’’ of the new process is one way to build a detailed
understanding of the process and see how it will work (Porter 2013).
Last, the company should embrace the new mindset and drive continuous improvement. Rather
than thinking of process improvement as a project that has a beginning, middle, and an end, it
should be envisioned as an ongoing activity that is tied to all technology and business activities
critical to enterprise operations. At regular time intervals, the team should gather data on the
performance of the new process to measure its success (Porter 2013; Rohleder and Silver 1997).
Note that BPR might be necessary at two points in Figure 3. When defining and understanding
the process, it may surface that the process is persistently and profoundly broken. At this point,
BPR might be necessary. Additionally, if BPI techniques are applied and the process continues to
be of key concern, then BPR is generally the next step (Rohleder and Silver 1997).
FIGURE 3
Business Process Improvement Model
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costs and long cycle times. As an illustration, Table 3 contains an explanation of the business
process issues evident in the Fit Gear example introduced in Appendix A.
TABLE 2
Business Process Improvement
Process Issues
(Smith 2010)
Authority ambiguity When two or more people are providing approval, this may be unnecessary as it
reeks of bureaucracy and increases cycle time of the process.
Bottlenecks When a number of information flows lead to a single activity, the process may
be hindered by insufficient resources dedicated to the roles and events
downstream. Bottlenecks can limit the performance or capacity of the entire
system, delaying or completely stopping the process.
Cycle time The time consumed during the entire process flow should be at the heart of
performance measurement, providing focus on the length of time it takes from
start to finish.
Data duplication Occurs when multiple groups involved in the process begin maintaining their
own separate information systems. Consequently, the same data are then kept
in multiple places.
Handoffs Involve the transfer of responsibility from one role to another, providing the
opportunity for mistakes, miscommunication, and delay.
Intermediaries Words such as ‘‘pass it by me’’ include an intermediary step. Consider if this
step is value-added.
Manual steps Technology and systems could be implemented to take the place of manual steps,
which are labor-intensive and add to cycle time and errors.
Old ways Technology and systems are available but not used because employees have not
been trained (or have been trained and do not want to use them). Employees
revert to ‘‘old ways of doing things.’’
Quality control Quality control is when someone else checks work, not when someone checks
his/her own work. Is the quality control really needed? Can the work be
mistake-proofed to make it impossible for the defect to pass on? Prevention is
better than detection.
Paper records Question whether the current process is adding, maintaining, or eliminating paper
records. Storing data in electronic form is optimal as the data then become
easier to share.
Rework This refers to people spending time fixing errors or remediating problems. The
source of the errors should be investigated and modification to the process
made to eliminate the potential for errors.
Role ambiguity Denotes lack of clarity about the expectations, norms, and behaviors associated
with a particular job. Ambiguity can lead to inefficiencies in processes.
Segregation of
duties violations
Employee should not be in the position to perpetrate and to conceal fraud. In
general, duties to be segregated among employees are: (1) custody of assets;
(2) authorization or approval of related transactions affecting those assets; (3)
recording or reporting of related transactions.
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Redesign Opportunities in the Fit Gear Bi-Weekly Payroll Process
BPR Principle
Not Followed/BPI Issue Explanation
1. Capture data once at its
source; Data duplication;
Non-value-added work
Data are collected on timecards, entered into Excel, and then
entered again into TEMS. Data should be collected just once and
entered into the system. A time and attendance module that
integrates with TEMS so time card machine is not used.
2. Self-service; Those that use
the output of the process
perform the process
Instead of the payroll clerk entering master data updates, we should
consider using self-service for this function by allowing
employees access into the system to update their master data.
3. Segregation of duties;
Authority ambiguity;
Intermediaries
Payroll clerk should not be entering employee master data updates.
HR manager or someone in HR should be doing this. Also, HR
manager should not be approving payroll.
4. Handoffs For such a simple process, there are too many handoffs. A question
might be why the receptionist is involved in this process.
5. Bottlenecks The receptionist is a bottleneck with the ability to hold up or
completely stop the payroll process.
6. Rework; Quality control There appears to be a lot of time spent on fixing errors and
remediating problems.
7. Paper records Use direct deposit instead of paper checks; this will also help with
internal control. Use electronic time cards not paper time cards.
8. Manual steps Payroll is one process that is outsourced in many companies. Fit
Gear should perform a cost/benefit on whether they should
outsource this function. Payroll is not their core competence.
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