Input, Output, and Edge Cases: Processes For ERP

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One of the most important and time-consuming parts of implementing ERP is redesigning business processes to make them more efficient. This is at the heart of the benefits from ERP and it takes a good deal of the time of a successful implementation.

A process is defined as a business-related operation that takes inputs and transforms them to outputs, ready for the next process. Conceptually you can think of this as a chain of black boxes, all self-contained. In process documentation, your job is to map out the contents of those black boxes, showing how the inputs are translated into outputs. Process design involves looking at the documentation of a process and seeing how it can be improved. That usually means simplifying the process by eliminating and combining steps, or eliminating the process completely. Sometimes however it involves adding steps to a process.

input and output in ERP ProcessIn addition to inputs and outputs, the process designer has to be concerned with exceptions – edge cases where the work flow varies for some reason. The rule is that every possible condition needs to be covered. Taken together, these three define process redesign.

The first step, process documentation can’t be done in a vacuum. Its aim is to document processes as they are, not as you think they are or as they are shown in some manual. That means collecting information from the people that actually perform the process and possibly watching the process in action. The goal here is to record the existing process accurately.

It’s important not only to capture the usual flow, but also the variations. For instance what happens if an invoice is missing important information? Or if it doesn’t add up. The process should have a contingency for problems, a standard method of handling the situation.

The process description should include every variation and where it occurs in the process. The best way to record a process is with a flow chart that makes it easy to follow the flow of work, however it goes. Typically the chart will start at the top of the page and go through to the bottom. As much as possible, keep the chart on a single page and break it down into sub-processes if it is too long to fit. What is important here is that the chart accurately records the flow of work and the associated decisions. Everything is irrelevant.

Once you’ve charted the work as it is, you can start re-engineering the process to make it more efficient. Look over the process and check it for clarity. It should be obvious at a glance what the workflow is.

Now look at the steps. Are any of them redundant? Note that redundant isn’t the same as an accuracy check. Are any of the steps unnecessary? Quite often you will find pieces of the work flow left over from an older version of the process. Or perhaps a series of operations insisted on by a long-gone manager that are no longer necessary. All of this needs to be eliminated.

Note that this takes some thought and analysis. You have to make sure you don’t eliminate something that is necessary for another process. Run back through the related steps in the work flow to make sure you haven’t eliminated something important.

This takes a long time and a considerable. There are hundreds or thousands, or even tens of thousands, of processes in the average company and it’s important to apply this discipline to all of them.

What you will end up with physically is a large stack of paper. Operationally you will end up with a complete picture of your operations as they will exist under ERP.

You may find that the changed processes will differ radically from what you are doing now. In that case you may need to apply change management procedures to help the company acclimatize to the changes. This is an important step because there will be some natural resistance to making changes in the way you do things. You need to make sure that your employees understand and accept the changes.

To a large extent, the success of your ERP implementation will depend on your process redesign and your company’s acceptance of it. This isn’t easy, but the results are worth it.

Rick Cook

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