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"
Business process problems can be identified with rudimentary analysis, but
if there is no means of defining, capturing, measuring or monitoring those processes, you can’t determine
if you are benefitting."
Source : Exact Software North America
Working Together More Efficiently: Mapping Out the Company’s Business Processes
Business Process is also known as :
Business Process Analysis,
Business Process Architecture,
Business Process Automation,
Business Process Components,
Business Process Data,
Business Process Definition,
Business Process Development,
Business Process Engineering,
Business Process Flow,
Business Process Guide,
Business Process Identification,
Business Process Improvement,
Business Process Information,
Business Process Integration,
Business Process Lead,
Business Process Management,
Business Process Management Definition,
Business Process Management System,
Business Process Management Technology,
Business Process Management Tool,
Business Process Management Workflow,
Business Process Managment,
Business Process Manual,
Business Process Mapping,
Business Process Methodology,
Business Process Model,
Business Process Modeling Software,
Business Process Optimization,
Business Process Orientation,
Business Process Outsourcing,
Business Process Owners,
Business Process Plan,
Business Process Questions,
Business Process Redesign,
Business Process Reengineering,
Business Process Review,
Business Process Server,
Business Process Service,
Business Process Simulation,
Business Process Software,
Business Process Solution,
Business Process Specialist,
Business Process Tools,
Business Process Utility,
Business Process View.
Executive Overview
Collaborate or stagnate
The ways in which people in companies work together and the ways companies think
and do business are undergoing radical and unavoidable changes. What was once
a business approach based on guarded and proprietary information available only
to a select few people within an organization has become a business approach based
on the need to collaborate-both inside and outside the four walls of an enterprise.
As our global economy becomes more digital, businesses must drive down costs to
be competitive and to improve profits. Both the ability and frequency of collaboration
leads to improved organizational performance and, thus, profits. Indeed, to survive,
an enterprise must be flexible enough to collaborate externally with its suppliers and
partners while fostering that same environment among its employees. We must
collaborate or we will surely stagnate.
To embrace the collaborative enterprise, businesses will undergo a mind shift.
Traditional organizational structures will have to make way for an open attitude
towards every individual and every organization with which they work. This is the direct
result of the rapid acceptance of the Internet as the medium for information exchange
between employees, businesses and other organizations, customers and suppliers.
Exact Software believes the walls that previously existed between various departments
and organizations are tumbling down and in time will disappear altogether. They will
have to disappear if an organization wants to stand out among its competition.
Customers expect the best service regardless of the way they enter an organization.
This service should come without delays resulting from, "That's not my department,"
or "You'll have to speak to my colleague." Solutions providers need to provide tools
to increase an organization's effectiveness through collaboration.
Get your house in order
Those enterprises that want to make the transition to true collaboration successfully
will benefit from getting their own house in order. The organization should be transpar-
ent and efficient. The use of knowledge and resources has to be optimal. Through the
ability to set up secure Websites and manage content, extended ERP offers the means
necessary for the essential preparation: improving and streamlining the organization
and its communication.
Extend enterprise applications beyond the 80/20 rule
To improve collaboration, enterprises should be willing to extend their enterprise
applications to more than 20% of the organization. The 80/20 Rule that 80% of a
company's processing is completed by 20% of its resources (employees) no longer
applies. Enterprise applications contain enormous processing power, but that power
is limited to the few. New tools are being developed that provide the opportunity
for organizations to extend their ERP systems. To get an understanding of how the
80/20 Rule evolved, let's take a look at the evolution of enterprise systems.
Up to the beginning of the 1980s, automation was almost exclusively directed at
distinct subsystems such as financial administration, inventory control and personnel
administration. It was an approach that led to what we now call "islands of automa-
tion," a phenomenon still present in many businesses today.
The idea of automating internal business processes was first applied in large-scale
businesses in the manufacturing and processing industry. This laid the basis for MRP,
material requirements planning. First generation MRP systems had some limitations,
among which was the paradoxical fact that users saw their inventories increase instead
of decrease, as promised by software vendors. In the beginning of the 1970s this evolved
into its second generation, called MRP II, manufacturing resource planning. With MRP II,
products became feature-rich but at the same time became a bit more complex.
The next step in the evolution was to reach different parts of the business, beyond
the manufacturing process. Software vendors added payroll for salary administration,
Human Resource Management (HRM), project management, asset management and
even some electronic form of document management, thereby in theory covering the
entire range of activities within an enterprise.
A new market, however, evolved that quickly exceeded the original MRP market and
built upon the efforts of software vendors that added functionality beyond manufactur-
ing and distribution. The Gartner Group named it enterprise resource planning, or ERP.
Countless new software vendors offered their back-office products and services under
this new umbrella and several developed into giants. The message, based on the con-
cept of best practices, was of particular interest to large companies. But, for the small
and medium-sized business, the concept of best practices was very expensive to
acquire as well as to be trained and supported on. This gave rise to the ERP mid-market.
The problem in each stage of evolution remained constant: while functionality was very
robust and quite useable, how could users extend this functionality to others in the
enterprise? How could the information stored in an enterprise system be dynamically,
easily, yet securely accessible beyond a select group of internal managers and back-
office professionals? Other areas that directly contribute to a firm's revenues, like mar-
keting, sales and customer service, typically are not a part of this process-processes
that form the sphere of front-office employee activity. These employees should have
access to up-to-date business information any time, anywhere in the world so they can
make good and informed decisions faster. In today's highly competitive environment,
this is a requirement, not an option.The call for broad, easily accessible business infor-
mation has only become louder since the introduction of new, Internet-based commu-
nications. With easy to use standard software in the form of Web browsers that not
only work on every modern PC and notebook but also on more compact equipment
such as Personal Digital Assistants (PDA) and even cellular telephones, it is possible
to exchange information from any imaginable place, at any time. To extend the power
of enterprise applications beyond the few, enter extended ERP solutions.
Key Tenets
Organizations should be prepared to collaborate, organize and extend their business
systems. Some key tenets-intended to support those decisions:
- keeping everything in one central database guarantees that all relevant
information will be quickly available to employees at all times, thereby reducing
the amount of paper and the time needed to make key decisions
- providing secure, role based access by all in a single sign-on environment ensures
employees, customers, partners and others have secure access to
everything they need
- automating all business processes leads to streamlined requests and
workflow requiring less time to complete tasks
Keep everything in one central database
The idea that recording the same data on multiple occasions and in multiple places
is a waste of time, and adheres firmly to the principle that the information an organiza-
tion collects during the course of its existence should be recorded once and stored
in one location. That is the only way to guarantee that everyone in the organization
has access to the same information at all times.
This principle is not new in itself, but until recently it was financially unfeasible for
most businesses. Progress in the area of scalable database server technology, together
with the advantageous combination of increasing capacity and the lower prices of
processors and storage media, has changed this for good. Most businesses can
afford to continuously expand its wealth of information without having to discard
data or free up storage space.
Information will only start providing real returns when it is in digital form. While paper is
without question the most mobile data carrier, there are also some disadvantages. With
paper documents you run the genuine risk of having multiple versions of that document
at any given time. You also run a security risk when anyone can access a hardcopy document.
Paper documents also lack the ability to be linked to other information, making it difficult
to track them down.
Extended ERP systems provide the ability to digitize this information and store it once.
Solutions can structure and enrich recorded information by making hyperlinks between
data. This makes insight into data in a specific context possible anytime at any desired
level of detail, and allows for the retrieval of related information. Mandatory key words
and free text search options provide optimal access to all documents relevant to the
organization. Only digitizing everything will guarantee that, besides information creat-
ed within the system, all external information will be available for review and analysis
by employees and others involved in the organization.
Secure, role-based access by all in a single sign-on
Centrally stored information should be accessible anytime, anywhere. Not long ago the
idea of universal access seemed impossible. But the emergence of the Internet,
intranet and extranet applications has removed the last obstacles.
Every individual user should have access to the information he or she needs, but no
more. This requirement has been fulfilled in extended ERP through the use of security
levels. You have the ability to assign specific security levels for customers, resellers,
employees and the public as you see fit. These security levels form a stepped security
system, in which security level 0 represents "The World" and applies to everyone who
visits the company's public Website from the outside. Security level 1 represents
"Customer" and offers access to the company's customer portal, the part of the Website
reserved exclusively for customers. Level 10 is the security level for employees in gen-
eral; level 18 is for middle management, etc. Every user logs in on his or her level with
a combination of a user name and a password. This provides access to all parts of the
system for which he/she has rights. For security at the highest management levels, for
example financial information, a user name and password can be supplemented with
other security mechanisms such as hardware keys or biometric identification methods.
An employee can and often does have multiple roles. For example, a support employee
can answer a customer's questions and be responsible for assessing technical tips for
accuracy before they appear on the customer Website. Every role has a specific set of
tasks and responsibilities associated with it. It is also possible to give more than one
person the same role, thus creating teams of employees with the same rights. This
plays an important role in the possibilities extended ERP offers for workflow manage-
ment and assignment of tasks. Establishing employees' roles simplifies transferring,
delegating and assuming tasks.
Extended ERP should be developed as one system, with one interface for every user
in the form of his/her Web browser. The rights assigned to a user are established once.
Logging in once provides users with access to all the information and functions to
which they are entitled. Having to remember multiple user name/password combina-
tions is now a thing of the past. For the organization, the fact that every user has
only one user name/password combination means a significant simplification of the
management of user rights. This translates directly into a lower cost of ownership
of the system as a whole.
Automate everything you can
Business processes, and the tasks surrounding them, should be automated as much
as possible. To do so, extended ERP should use a collection of advanced algorithms
to ensure that tasks and requests are allocated to and completed by the appropriate
person or group. A request can be the direct result of a transaction (for example a
request for product information from the Website), but can also be created explicitly by
one employee for another (for example, someone who requests a day off from his/her
manager).
Virtually all activities within a company have a common structure for request, approval
and completion. This assumption is the basis for the request concept that plays a
major role in workflow management, but which remains largely hidden from the user
in his or her day-to-day work. A request can be a task for you, a follow-up phone call,
a support question or a note on the customer account.
Architecture
The above-mentioned tenets form what is referred to as three-tier architecture: a
database layer, an application layer and a presentation layer. You may view system
architecture as something for technocrats, but this gives extended ERP a number of
essential advantages.
The most important advantage is that, like the data storage, the entire system can be
managed and maintained centrally. The time-consuming and costly management and
maintenance on the part of the users can be reduced to practically nothing. All a user
requires is a Web browser, a user name and a password.
A second advantage is that the management, maintenance and security of the system
can be outsourced easily, eliminating expensive investments in infrastructure. The
advantages of outsourcing include a better insight into costs, clear agreements as to
the performance and availability of the system (in the form of Service Level Agreements),
and the fact that the company no longer has to hire its own IT personnel. These factors
make outsourcing an attractive alternative for small and medium-sized businesses.
Extended ERP: the functional components
There are seven functional elements that comprise extended ERP. Each offers its own
broad range of functions and redefines collaboration.
HRM: it's all about people
In addition to traditional human resources management functions, the HRM functional
component offers your employees Web-based access to their personal information.
With HRM, every employee has access to the products, customers, documents and
workflows with internal or external requests, to which they are linked.
Through the use of security levels and roles, HRM allows you to establish the
combination of rights and tasks an employee has and to which information he or
she has access. Each change is recorded immediately by HRM, including the identity
of whoever makes the change, so that anonymous actions are impossible.
HRM is also the functional component that handles online management and planning
of employees, task delegation, management of workflows, absence tracking, and deal-
ing with matters such as expenses and special compensation. The functional compo-
nent also allows you to construct an internal "yellow pages" where your employees
can look up information about their colleagues, like location, skills, presence/absence,
and other colleagues in the same room or vicinity. All employee-related financial
transactions can be traced and reported down to the level of the individual employee.
HRM also offers a wide range of functions for generating reports and statistical infor-
mation that provide up-to-date insight into the performance of your most important
asset and means of production: your employees. These reports can be configured in
any desired format, from organizational chart and absence statistics by department
or function, to turnover information and more. HRM also has a direct link to the payroll
system.
HRM is also an essential tool for asset management. You can track requests for assets
and report on the requests. HRM tracks which assets individual employees in your
company have been given access to, such as computers or cellular telephones.
Logistics: accurate and consistent information
The extended ERP functional component for catalog, item and price management
and product configuration is logistics. Entering and storing information once ensures
that this information is always up-to-date and consistent. The functional component
provides the ability to adjust price information per customer or group of customers
and also lets you define different price policies for different countries if necessary.
Logistics not only keeps information up-to-date concerning products and services you
have sold to your customers and related information such as brochures, manuals and
guarantees, but also facilitates the management of products that are used internally
such as equipment, furniture and office supplies. On an individual basis, items that
employees may or may not acquire can be established.
Internal product information can also be made available for suppliers, so that they can
take timely initiative to replenish stocks. Logistics is prepared for information exchange
via the XML protocol.
CRM: everything about relationships
The CRM (customer relationship management) functional component is the meeting
point for all information concerning customers and prospects. The information on
the customer card is linked to all the relevant documents and information, such as
contracts, invoices, financial transactions, sales sheets, meeting and visit reports,
customer questions and complaints including the status of the responses, and reseller
or distributor information. CRM ensures that the information that is spread out across
various sub-products can be approached and managed from one location.
CRM compiles customer information and makes it accessible to all interested parties,
including the customer. Just like other users, the customer can access the system
using a Web browser to monitor the status of an existing order or to check the answer
to a question posed via the Web. CRM also offers customers the ability to update
information in the system, such as entering a change of address or a different contact
person, thereby allowing the person that knows the most about this information to
keep it accurate. Thanks to the one-time, central data entry principle on which extend-
ed ERP is based, the updated information is available to every user immediately and
in a guaranteed consistent format. Back-office users also benefit from this. By sharing
a central database, the above change is reflected in the back-office as well. CRM also
offers extensive possibilities for generating ad-hoc reports, statistics and analyses.
CRM is an essential tool for effective, goal-oriented account management and sales
automation, including the planning of activities per account, recording hours spent
on an account, managing marketing campaigns, managing your sales pipeline, as
well as publishing online product information and catalogs.
Workflow: streamlined business processes
Workflow helps you process, streamline and monitor the requests within your company.
Electronic processes defined in workflow ensure that requests are routed to the per-
son's workflow who is responsible for completing that type of request. Through the
use of this functional component, the rules and procedures formulated for every type
of request are managed. Uniform and efficient processing of requests is thus guaran-
teed. e-Workflow offers your employees, customers and partners the ability to view
the current status of requests, without having to call, write or e-mail.
With workflow's built-in reporting and analysis capabilities, you can ascertain which
types of requests are most common, how many requests a given employee has
processed in a given period of time, how long their average requests remained open,
and what is the average processing time of a particular type of request. This allows you
to streamline your business processes, while continuously evaluating and improving
those processes. In addition to the predefined request types in workflow, you can
define as many new, company-specific requests as you like.
Documents: complete information and knowledge
management
Document management is the functional component responsible for information and
knowledge management. Organizations require a user-friendly, flexible and definable
document creation and management system that allows them to streamline their
internal and external communication.
Creating, storing and managing documents centrally forms the basis of document
management. You can link documents to customers, employees, products, projects
and other documents any way you like. Document management offers you simple
ways to set up and manage Websites for target groups that can be defined within
an extended ERP solution.
With advanced publication and search possibilities, a document management system
is the medium for information exchange. Whereas e-mail messages are only visible
for the sender and the receiver(s), message traffic can now become part of the system.
The information exchanged is also available and visible for other interested parties.
The information stored remains permanently accessible and is constantly enriched,
creating transparency in your organization. Users of particular information, for example
the minutes of a meeting with links to other relevant documents, always have access
to the same version of the information.
Document management is the most universal functional component in an extended
ERP system, and is used intensively by the other functional components for the storage
and exchange of information. Pharmaceutical companies, for example, with complex
process documentation or businesses seeking ISO 9000 compliance will find that
document/knowledge management provides a robust platform for these business
requirements.
Project Management: all relevant information at your fingertips
The project management functional component takes advantage of permanent,
anytime, anywhere access to information stored in an extended ERP solution. With a
project management component, the employees involved have access to all relevant
project information at any point in the project cycle, such as the availability of people
and assets, contract information, requests and their status, time input and budgets.
Project management is suitable for both the management of internal and external
projects. Such solutions offer powerful tools for managing projects based on work-
flows, creating cost and revenue forecasts and generating project reports. You can also
define who has access to what project information. Additionally, project management
functions as a knowledge base for storage of all information related to completed
projects. This includes information from the original project proposal and the project
agreement through the invoicing and project evaluation. The information is also
accessible for later use as a template for a new project.
Financial Management: insight into your finances
Financial management component acts as your company's financial control room.
This functional component is as powerful as it is multi-faceted, providing you with the
instruments necessary for the consolidation and analysis of financial information, and
comparisons of budgets and analysis against actuals. Every financial transaction within
the organization is recorded in an extended ERP solution's central database and is
directly available for online reporting and analyses.
The standard interface is the organizational chart. Here the user can specify which
performance indicators should be shown and at what level of detail. The drill-down
capability makes it possible to view performance indicators like profit and loss figures
at any level. You can then trace them back to individual transactions. You can also gain
immediate integration with your existing ERP back-office product. Where relevant, a
financial management component can automatically convert local currencies to the
centrally used currency.
Such components make it possible to work with different but related budgets simulta-
neously. Additionally, workflows can be defined for the approval of budgets.
Seven functional elements, one database
Together, the seven functional components comprising extended ERP offer you all
the instruments necessary for monitoring and managing the processes and activities
within your organization and between your organization and the outside world. This
is all made possible through the use of one central database that is accessible any
time, anywhere.
Because all the information is entered only once, the consistency of the information
used by each functional component is guaranteed. The central database also contains
the links between the information for which every individual functional component is
responsible. This gives you a 100% up-to-date and accurate overview of your business.
Summary
Extended ERP: greater than the sum of its parts
As we discussed, extended ERP emerged from three basic principles:
- keeping everything in one database guarantees that all relevant information
will be quickly available to employees at all times, thereby reducing the amount
of paper and the time needed to make key decisions
- providing secure, role based access by all in a single sign-on environment ensures
employees, customers, partners and others have the information they need
- automating all business processes leads to streamlined workflow requiring
less time to complete tasks
The result is an integrated package so multi-faceted that it is difficult to categorize.
Is it a workflow package? A tool for sales force automation? A tool to manage your help
desk? For automation of professional services delivered by, for example, consultants?
An HRM package? An item management package? A tool for document management?
For financial consolidation? A Web publishing tool? A corporate portal? An e-business
package?
As unbelievable as it sounds, the response to each of these questions should be
"Yes". By integrating these functional components into one application, organizations
of all sizes in all industries can increase collaboration, create organizational transparency
and efficiency, and extend the power of business systems like never before.
The key to implementing this system is to map out the company's business processes
beforehand.