Lesson 8

Process Modeling, Process Improvement, and ERP Implementation

Process Modeling
A process model can be as simple as a diagram with boxes and arrows or as
complex as computer software that allows for process simulation. Graphical
representations are usually easier to understand than written descriptions, and process
modeling tools provide a way to describe a business process so anyone viewing the
model can easily understand the process. Frequently, process models are developed
by a team of employees involved in the process. The interaction required to develop a
process model often reveals misunderstandings and ensures that all team members are
“on the same page.” A well-developed process model provides a good starting point
for analyzing a process so participants can design and implement improvements.
Process models can also be used to train employees who will support the business
process.

Flowcharting Process Models

A flowchart is any graphical representation of the movement or flow of concrete or
abstract items—materials, documents, logic, and so on. Flowcharts originated with
mathematicians and computer programmers, who used them to trace the logical path
of an algorithm. A flowchart is a clear, graphical representation of a process from
beginning to end, regardless of whether that process is an algorithm or a
manufacturing procedure. Today the term process mapping is often used
interchangeably with flowcharting, the distinction being that process mapping refers
specifically to the activities occurring within an existing business process. Process
mapping develops an “as is” representation of a process, with a goal of exposing
weaknesses that need to be addressed. Once a company develops a process map, it
can perform a gap analysis, which is an assessment of disparities between how the
process currently works and how the organization wants it to work.

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Process Improvements
Using the simple technique of value analysis can also generate process-improvement
ideas. In value analysis, each activity in the process is analyzed for the value it adds to
the product or service. The value added is an increase in a products or services value,
from the perspective of the customer.
Activities can add:
• 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

Event Process Chain (EPC) Diagrams

SAP’s ERP software supports hundreds of business processes, and SAP has developed
graphical models for many of these business processes using the event process chain
(EPC) format. The EPC format uses only two symbols to represent a business process.
The advantage of the EPC format is that it matches the logic and structure of SAP’s ERP
software design. The EPC modeling technique is available as a software tool through
Software AG’s ARIS (Architecture of Integrated Information System) platform.
In EPC modeling, the two structures used to represent business processes are events
and functions.

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