CHAPTER 7
PROCESS MODELING,
PROCESS IMPROVEMENT,
AND ERP IMPLEMENTATION
LEARNING OBJECTIVES:
 Use basic flowcharting techniques to map a business process
 Develop an event process chain (EPC) diagram of a basic business process
 Evaluate the value added by each step in a business process
 Develop process-improvement suggestions
 Discuss the key issues in managing an ERP implementation project
 Describe some of the key tools used to manage an ERP implementation project
Objective 1
Objective 2
Objective 3
Objective 4
PROCESS MODELING
Process Model
 used to describe any abstract representation of a process.
 can be as simple as a diagram with boxes and arrows or as
complex as computer software that allows for process
simulation.
 can also be used to train employees who will support the
business process.
Objective 5
Objective 6
Ice Breaker
Flowcharting Process Model
 simplest of the process-modeling tools.
 any graphical representation of the movement or flow of
concrete or abstract items—materials, documents, logic, and
so on.
 uses basic flowcharting symbols.
Basic Flowcharting Symbols
Objective 1
Objective 2
Boundaries
(Beginning/End)
Direction of Logic
Operation
Or
Objective 3
1
Connector
Decision
Objective 4
Objective 5
Extensions of Process Mapping
Objective 6
 Hierarchical Modeling
• type of process mapping in which a business process can be described in
greater or
less detail, depending on the task at hand.
• Hierarchical modeling software provides the user with the flexibility to move easily from
higher-level, less detailed views to lower - level views with more details.
Ice Breaker
 Deployment / Swimlane Flowcharting
• depicts team members across the top, with each step aligned vertically under the
appropriate employee or team.
• has the advantage of clearly identifying each person’s tasks in the process.
Objective 1
Objective 2
Objective 3
Objective 4
Objective 5
Objective 6
Ice Breaker
Objective 1
Objective 2
EVENT PROCESS CHAIN
(EPC) DIAGRAMS
 The EPC format uses only two symbols to represent a business process.
 Two Structures used to represent business:
Objective 3
Objective 4
Objective 5
Events reflect a state or status in the process and are represented by an elongated
hexagon.
Functions reflect the part of the process where change occurs and are represented by
rectangles with rounded corners.
 Standardized naming convention for functions and events is used. The
convention for naming events is object—past participle.
Ex. Expense – incurred; Expense report – approved.
 For functions, the naming convention is verb—object.
Ice Breaker
Prepare – expense report; Review – expense report.
<
 EPC diagrams begin and end with events. Events must be followed by
functions, and functions must be followed by events.
 Three types of branching connectors: AND, OR, and Exclusive OR (XOR)
AND
OR
Exclusive OR (XOR)
<
Objective 6
 EPC with Splitting and consolidating path.
X
EPC with Splitting and
consolidating paths
Objective 1
Objective 2
Objective 3
Objective 4
Objective 5
Objective 6
Ice Breaker
Develop an event process chain (EPC)
diagram of a basic business process
Objective 1
Objective 2
Objective 3
Objective 4
EVALUATE THE VALUE
ADDED
PROCESS-MAPPING TOOLS
 provide the ability to describe business processes in a universally
understood format.
 the task of mapping a process requires a team consisting of key personnel
who are involved in the process.
Objective 5
In value analysis, each activity in the process is analyzed for the value it adds
to the product or service.
Objective 6
The value added is an increase in a product or service’s value, from the
perspective of the customer.
Ice Breaker
Simbulan, Catherine Rose C.
Value Added activities help in converting a product from a state of raw material
to a finished product in the least possible time, at minimum costs. It aims at
completing a business activity correctly the very first time and helping the
business to deliver the product or service while fully conforming to customer
requirements or specifications.
The activities involved in this process can add:
Objective 1
Objective 2
Objective 3
 Real value—Value for which the customer is willing to pay.
 Business value—Value that helps the company run its business.
 No value—An activity that should be eliminated.

The Fitter expense-reporting process does not provide real value, because
Fitter’s customers do not care whether sales employees receive prompt and
accurate reimbursement of their business expenses. However, the expensereporting process does add business value, and it should provide this value at a
minimum cost.

Evaluating the value of part of a business activity, however, is not an exact
science because parts of a process cannot be sold on the open market. Although
it is a challenging task, evaluating each activity on the basis of value provided
can highlight opportunities for improvement. Activities that cost more than their
value added should be improved.

The value analysis concept can be expanded to an evaluation of both the time
and cost of each process step. For each step in the current process, you
estimate the actual time and cost. Then you estimate the value-added time and
cost—determining how much of the actual time is adding value and how much of
the cost is worth paying for.
Objective 4
Objective 5
Objective 6
Ice Breaker
Simbulan, Catherine Rose C.
PROCESS IMPROVEMENT
Objective 1
Questions to identify areas for improvement:
 Does the activity inspect or approve someone else’s work?
Objective 2
Objective 3
Objective 4
 Are copies sent to people who do not need the information?
 Are there people or agencies involved that impede the effectiveness and
efficiency of the process?
 Is someone approving something they already approved?
 Are duplicate databases being maintained?
Objective 5
Objective 6
Concepts to Improve Process
 Reduce interruptions.
Ice Breaker
 Avoid duplication or fragmentation of tasks.
 Avoid complex flows and bottlenecks.
 Reduce the amount of handling.
 Eliminate unused data and copies.
ISSUES IN MANAGING
Objective 1
Objective 2
 All kinds of software implementations can suffer from delays, cost overruns,
and performance problems—not just ERP projects.
Objective 3
 Many ERP implementation experts emphasize the importance of proper
education and training for both employees and managers
Objective 4
Objective 5
 ERP software is expensive to purchase and time consuming to implement,
and it requires significant employee training—but the payoffs can be
spectacular. For some companies, however, the ROI may not be immediate
or even calculable.
 The implementation of ERP is an ongoing process, not a one-time task.
Objective 6
Ice Breaker
 Costs of Implementing ERP
Objective 1
Objective 2
Objective 3
Objective 4
Objective 5
Objective 6
Ice Breaker

Software licensing fees

Consulting fees

Project team member time

Employee training

Productivity losses
 Managing the human behavior aspects of organizational change is called
Organizational Change Management (OCM).
 One of the keys to managing OCM is to realize that most people do not
mind change, they mind being changed.
 The best way to improve a business process is to have the people most
familiar with the process leverage their experience and creativity to develop
process-improvement ideas.
 Most challenges to ERP implementation involve managing personnel and
their reactions to the change, rather than managing technical issues.
Managing the human behavior aspects of organizational change is called
organizational change management (OCM).
Implementation Tools
Objective 1
Objective 2
Objective 3
Objective 4
Objective 5
Objective 6
ERP Implementation Project as presented in an Implementation Roadmap
1st phase Project Preparation (15 to 20 days)
 include organizing the technical team, defining the system landscape,
selecting the hardware and database vendors, and defining the project’s
scope—what the project is to accomplish.
2nd Phase Business Blueprint (25 to 40 days)
 technical team members determine the method of data transfer from the
firm’s existing computer systems/legacy systems, which may be replaced
by the ERP system or may continue to function with the ERP system
through an interface.
3rd phase Realization (55 to 80 days)
Ice Breaker
 The project team members work with consultants to configure the ERP
software in the development system. In SAP implementation,—a
development system for configuring the SAP software to match the
Business Blueprint, a test system for evaluating the software configuration,
and a production system, on which the company runs the final software.
4th phase Final Preparation (35 to 55 days)
Objective 1
Objective 2
Testing the system throughput for critical business processes (determining
whether it can handle the volume of transactions) in the quality assurance
system
 Setting up the help desk where end users can get support
Objective 3
Objective 4
Objective 5
Objective 6
Ice Breaker
 Setting up operation of the production system and transferring data from
legacy systems
 Conducting end-user training
 Setting the Go Live date
5th phase Go Live and Support (20 to 24 days)
 to set a completion date for the project. Any enhancements or extensions to
the system should be managed as separate projects, not as extensions of
the original implementation project.
Objective 1
Guess the word
Objective 2
Objective 3
Objective 4
+
Objective 5
Objective 6
Ice Breaker
SW
_ _I M L_ A_ N
N E_
Objective 1
Guess the word
Objective 2
Objective 3
Objective 4
+
Objective 5
Objective 6
Ice Breaker
PR
_R
OO
C _E _SSS_ MMO_ D_ EE LL
Objective 1
Objective 2
2 Truths, 1 Lie
1 Real value refers to the value that helps
the company run its business.
Objective 3
Objective 4
2 The Fitter expense-reporting process
does not provide real value.
Objective 5
Objective 6
Ice Breaker
3 The value added is an increase in a
product or service’s value, from the
perspective of the customer.
2 Truths, 1 Lie
Objective 1
Objective 2
1 EPC diagrams begin and end with
events.
Objective 3
Objective 4
Objective 5
Objective 6
Ice Breaker
2 The Fitter Expense-Reporting Process
is considered as the simplest processmodeling tool.
3 EPC format matches the logic and
structure of SAP’s ERP software design.
Objective 1
Word Hunt
Objective 2
Objective 3
Objective 4
Objective 5
Objective 6
Ice Breaker
Enterprise
Process Model
Value Analysis
Functions
Email
Real Value
Swimlane
Events
 ERP system supports the business process
 Process mapping / Process Modeling
 ERP Workflows
 Challenges in implementation of ERP
 Managing personnel reactions
 Technical issues