Principles of Process Flow in ERP Systemby Dennis Bortolus
ERP, which stands for Enterprise Resource Planning, is a methodology for integrating business applications such as finance, human resources, sales and supply chain management into a single system that shares information and processing standards.
Business processes often involve multiple steps that cross function or organize units, making a well designed and understood process flow highly important.
To qualify as a business process, it must take an input, which in the case of an ERP is information, and produce an output. That output can be a product or service or it can be information. It must represent a complete business transaction. Processes are defined as a singular complete action and should not be confused with individual steps within a process. "Make lemonade" is a process. "Squeeze Lemons" is a step within the process of making lemonade. Alone, squeezing lemons does not produce the desired result.
Process flows break the business process into logical steps. A process step may or may not add to or update the information but the step must add value to the process even if it is only to review and approve a transaction. The steps must be placed in logical order so that a step is not dependent on information that is added to the system in a subsequent step.
Each step within the process should add information that is passed to subsequent steps. If the step is designed to review and approve or reject the transaction, the information added indicates the status, reasons and who performed the step.
A role is a person or group that performs a step in the process such as Originator, Approver, Budget Administrator or Supervisor. Roles may not always match the person's job title--the role should be named by what role the person plays in the specific business transaction.The system itself can play a role if the step is completely automated and that step adds value to the overall process.
Process flows take place over time. Flow diagrams should reflect a time-line in which the sequence of events or steps occur. Specific dates may be more important to some process flows than others, but they should all reflect that not all steps happen simultaneously.
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