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AN INTEGRATED BUSINESS MODELLING APPROACH FOR ERP SUPPORTED PROCESS DOCUMENTATION Nikolaos PANAYIOTOU1, STAVROS Ponis2, Sotiris GAYIALIS3 and Theodoros PANAYIOTOU4 1 National Technical University of Athens, Mechanical Engineering Department, Section of Industrial Management & Operational Research, 15780 Zografos, Athens, Greece. 2 National Technical University of Athens, Mechanical Engineering Department, Section of Industrial Management & Operational Research, 15780 Zografos, Athens, Greece.
Abstract: This paper presents a case study demonstrating the documentation of organisational business processes in a large Petroleum company operating in Greece. The introduction of an advanced Enterprise Resource Planning (ERP) system covering all the business processes reengineered the way the organisation operated and called for analytical documentation of the new processes and activities. An integrated business modeling approach was introduced, covering specific systemic views: organisational, process, information and Information Systems (IS). The ARIS architecture was used, providing the means for linking the different views and connecting them with information technology. Specific ARIS methods (Organisational Charts, Extended Event Process Chains (eEPCs), Extended Entity Relationship Diagrams (eERMs), Function Trees and Process Charts) were selected and combined with analytical process descriptions and ERP users’ manuals. The outcomes of the approach introduced were the provision of analytical documentation and specific guidelines for each employee taking into account both their organisational and ERP system roles and generating automatic job descriptions. The expected long-term outcome of the implemented approach is the achievement of a continuous improvement scheme, which will support the operation of the company and the maintenance of the ERP system. Keywords: Enterprise Modelling, ERP System, Continuous Improvement, ARIS Architecture, Case Study 1. Introduction Enterprise Resource Planning (ERP) systems are large commercial software packages that promise a seamless integration of information flow through an organization, by combining various sources of information into a single software application and a single database [1]. By integrating the various aspects of the organization and streamlining the data flows, they overcome the fragmentation problems of legacy systems [2]. The evolution of ERP came about originally in response to the increasingly pressing demands of global market competition, customer demands, and changes in business and IT imperatives [3]. It was not long before ERP applications dominated the market. According to Sprott [4], ERP systems were one of the fastest growing and most profitable areas of the software industry during the late 1990s while in 1998, approximately 40% of companies with annual revenues over $1 billion had undergone ERP implementations [5].
The adoption of ERP systems has been the focus of substantial research in recent years. Although early research has covered many aspects of ERP implementation, it has focused mainly on the earlier stages of the ERP lifecycle [1]. It is common, for companies, after running a marathon that could take up to four years from day one to go-live, to believe that the ERP project is finished. That is not the case though. The implementation of an ERP system does not follow a life cycle of having a beginning and an end; on the contrary it is a continual process. As Davenport [6] argues, an enterprise system is not a project, it’s a way of life. According to a recent survey (2000) by Deloitte Consulting only 53% of the company executives asked, realise that going live isn’t the end of their ERP program, but rather the end of the beginning. The ERP go-live phase initiates an ongoing process including numerous maintenance activities and issues that need to be resolved after an ERP system becomes operational. Examples of such activities include enhancements, user support, and system upgrades [1]. One of the most significant tasks a company has to undertake after going live is the management of the organizational change the ERP system has incurred to the company. According to Davenport, ERP implementation often results in a large-scale organizational change [2]. Mashari [7] argues that change management can be supported by some software tools which ease the training of staff and by helping them to take the appropriate steps within a process, automating communication activities within a project, ensuring that responsibilities are assigned to the proper people and groups, increasing flexibility and responsiveness, and providing more accountability by generating and maintaining audit trails [8]. A good example of change management, relative to the work done in this research paper, is changing roles and responsibilities [9], while another one can be seen in Schaaf’s study on after going live innovative training [10]. In this new emerging business process and technological environment enterprise modelling provides a semantic unification space at the corporate level where shared concepts (e.g. organizational and IT roles and their related activities) can be properly defined, mapped to one another and widely communicated in the forms of enterprise models [11]. Enterprise Modelling techniques and associated visual languages are very important and useful to support new approaches to enterprise business transformation and improvement [12]. To support these efforts, a plethora of tools have appeared in the software market e.g. ARIS Toolset, FirstSTEP, METIS, Enterprise Modeller, KBSI tools, CimTool, MOOGO, IMAGIM [13], processing power has increased dramatically and modelling architectures have evolved and in some cases even matured [14]. According to Gartner and its BPA Magic Quadrant the market leader company in this field based on its vision and its ability to execute is IDS Scheer S.A. the developer of ARIS Collaborative Suite of business process modelling tools. IDS is a strategic partner of SAP AG the leading ERP software company [15] and ARIS software and its underlying architecture and semantics is used for all the process, organizational, functional and data modelling activities throughout SAP R/3 implementations. This paper presents the work done within the context of a project followed the “go live” phase of the implementation, aiming in elaborating a business process modelling tool
to support the change management process by providing accurate and easily accessible documentation for specific aspects of the enterprise these being the reengineered processes, the new organizational roles and activities, the system roles assigned to organizational units and the job descriptions per organizational and system roles. The application of the elaborated business process modelling tool resulted in elevating the new system acceptance by the employees, increased employee involvement and commitment, enhanced employees satisfaction and eventually contributed –especially combined with a thorough training programme- to the overall ERP implementation project success. 2. A Proposed Business Modelling Approach for ERP-Supported Organisations The introduction of an advanced and complicated Enterprise Resource Planning System (ERP) in an organization is frequently connected with Business Process Reengineering (BPR) initiatives. No matter what the approach of the reengineering will be, ERP-Driven BPR or pure BPR, a number of important changes will affect the future operation of the organization. Business Process Reengineering can result in one or more of the following alternatives: Organisational restructuring affecting the existing divisions and departments of the company. Business process redesign of existing processes, or even new business process creation for operations that did not exist in the past. Introduction of new Information Technology (IT) systems and changes in the interfaces between the applications of the existing IT infrastructure. As a result, the organisation is faced with a new reality, which affects both the everyday and strategic operation of the company. This reality has to be thoroughly documented and the employees have to be heavily trained and supported in order for the company to be able to fast and efficiently adapt to the changes the ERP system imposed. After the ERP system “goes live”, in other words, when the new system comes into operation and the old one is discontinued, the Top Management of the organisation needs analytical documentation consisting of the following elements: The new Organisational Charts. Analytical Process Descriptions of the new business processes (both the productive and the supporting ones). The Job Descriptions for each organisational role, under the light of the newly introduced organisational chart and the altered business processes. The IT authorization profiles for the users of the new ERP system and the Systemic Roles they have. Process Oriented ERP Manuals that can support the users in their everyday activities. It can be understood that the above elements are interrelated and affect each other. The coverage of these elements involves the elaboration of the following terms: Processes: A process is a set of activities, which are carried out towards a well-defined goal, usually with the participation of many different departments of the organisation. The total number of processes covers all the operations of the company.
Activities: An activity is the smallest operation that takes place in an organisation. A process consists of a number of specific activities. Events: The events are the triggers for an activity or a process. Organisational roles: A company consists of organisational units, such as divisions and departments. Each employee is included in an organisational unit and has at least one specific organisational role, which underlies his/ hers basic tasks (activities) in the organisation. IT Roles: All the employees that have access to the Information Systems of the Organisation must carry out specific systemic activities, which are part of specific IT roles. The determination of the users’ IT roles is very important for the organisation for Internal Audit purposes. Information: The information (as well as the material) can be the input or the output of an activity. It can have a formal (e.g. report or application form) or informal (e.g. verbal information) form. It is the most important form of interface between the different departments or divisions. Employees: The employees are the intellectual asset of the organisation and are responsible for its operations. They have one or more organisational roles but they can also have one or more IT roles.
Business processes are dynamic in nature. Such a dynamic behavior suggests that documentation cannot realize its full benefits in case it is managed just like a snapshot. It has to be easily updateable and directly accessible to every employee of the company. It can be concluded that the determination of the appropriate software tool affects the success of the documentation system and the implementation of the continuous process improvement in the organisation. Based on the concepts described in the previous paragraphs and trying to cover the specific needs for documentation of organisations after the implementation of large ERP systems, a proposed business modelling approach was developed, based on the ARIS architecture and the ARIS IT software consisting of the methods (business modelling tools) presented in Figure 1. Organisation
Organisational Charts
Requirements Definition Design Specification E
Extended Entity Relationship Diagrams (eERM)
Data
Implementation Description
F D O
Process Chain Diagrams(PCD)
Extended Event Process Chains (eEPC)
Control
Function Tree
Process
Function
Figure 1. Proposed Business Modelling Tools
The methods used in the four views supported by the ARIS architecture are the following: Data View: Extended Entity Relationship Models (eERM) are used for the representation of the exchanged information in the new system. Function View: The function tree method is used for the hierarchical representation of functions in order to minimise their complexity. The static view of the function tree is complemented by the process diagrams, which include positional relationships represented by arrows. Organisational View: The organisational charts are used in order to designate the chain of command within the organisation. The analysis reaches the representation level of the employee. Control View: Extended Event Process Chain (eEPC) diagrams are used for the representation of the control view, which combined the data, function and organisational views. PCD diagrams are used for the representation of additional information such as the automated functions in the new system. The EPCs are accompanied by analytical verbal descriptions for each activity. The selected methods in the four views of the ARIS Architecture enable the generation of the following reports, which cover the specific organisational needs for analytical documentation after the implementation of an ERP system: Analytical organisational charts reaching the representation level of employees (covering the need for up-to-date organisational charts). List of organisational roles per employee (covering the need for analytical and easy to use organisational charts). Activities carried out by each employee, organisational role, department and division (covering the need for job descriptions for each organisational role). Activities carried out by each IT role (covering the need for efficient IT authorizations design). List of IT roles per employee (covering the need for IT authorizations monitoring). Process descriptions for each process based on the verbal description of each activity (covering the need for process documentation). List of references (transactions) to ERP Users’ Manuals material for the operation of the systemic activities (covering the need for meaningful support of the system’s users). 3. A Case Study of a Large Organisation Operating in the Petroleum Industry The company in which the proposed business process modelling approach was applied is the largest industrial and commercial enterprise in its country operating as a fully integrated oil enterprise whose activities range from refining of crude oil and trading/ marketing of petroleum products to production, trading and marketing of all other forms of energy. It employs about 4,500 people worldwide, while revenues in year 2000 totalled €4,3 million. The company’s main activities are in the area of refining, petrochemicals and upstream. The efficiency of the group is further enhanced by the integrated administrative scheme, which encompasses most of the subsidiaries and affiliates. Following the corporate
restructuring and the high cash flows of the 1998-2000 period, the group now has the liquidity and borrowing capacity to finance its business expansion. In the context of this expansion, the company decided to integrate its business process by the acquisition and implementation of an ERP system, provided by the market leading company on the enterprise resource planning software market. The size of the company under study and the wide scope of the ERP system implementation were expected to impose a large amount of organizational distortion thus calling for the reception of certain measures to support the change management process. The work presented in this paper concerns the after going live phase of the ERP project. The main goal of the project was the elaboration of a business process modelling tool, for the mapping of the whole enterprise under the prism of the newly implemented ERP system in the four views provided by the ARIS architecture (this includes reengineered processes, new organizational roles that execute the activities in which the processes are decomposed, system roles assigned to organizational units, job descriptions per organizational and system roles). To achieve this goal, a set of ARIS diagrams (organizational charts, eEPC’s and role diagrams) were elaborated creating an analytical business model, covering the needs of the FI (Finance), CO (Controlling), PP (Production Planning), MM (Material Management), PM (Plant Maintenance) and QM (Quality Management) software modules. The business model included database information for 4500 employees, 73 business processes, 814 activities, 190 system roles and 560 system transactions. More specifically, the steps followed for the implementation of the business process modelling approach, were the following: Interviews with the key users of each module in order to obtain a perfect understanding of the new business process. Thorough study of the business blueprints developed during the implementation phase, as well as the ERP’s user manuals. Construction of the new organizational chart after the ERP-driven BPR took place (ARIS organizational view). An example of an organizational chart for the General Maintenance & Construction department is presented in Figure 2. General Maintenance & Construction Head of Department
Kotidis
Engineer
Supervisor
Foreman
Bouklas
Tomatsidis
Agiptatdis
Noidis G.
Inventory Supervisor
Alexander
Primary Inventory Clerk
Inventory Clerk
Sgouras
Thanos
Tsigos
Inventory Assistant Clerk
Goutzelis
Avlonitis
Figure 2. General Maintenance & Construction Organisational Chart
Identification of the systemic roles for each user of the ERP system and their representation with the use of role diagrams. Design of the systemic roles for each ERP user using the ARIS toolset. An example of a role diagram is presented in Figure 3. Goutzelis
MM Fuel Stock Report
MM Inventory Clerk
MM Inventory Controller
MM Inventory Supervisor
MM Physical Inventory Clerk
MM Physical Inventory Count Clerk
MM Physical Inventory Supervisor
MM Maintenance Req. Approv.
Figure 3. Employee’s System Roles
Definition of analysed business processes and their representation with process diagrams and hierarchical functional trees (function view). Development of analytical process chain diagrams (decomposition of the processes included in the process diagrams, representing all the activities taking place, automated or not). These diagrams integrate all the discrete ARIS views using elements from the organizational charts, the data models and the role diagrams. An example of an eEPC diagram for the Maintenance Notification process is presented in Figure 4. Decision for Maintenance Task Notification
Maintenance Task Notification
Maintenance Task Notification Completed
Entry of Maintenance Team & Date
PM Maintenance Req. Clerk
On Site Inspection
PM Maintenance Req. Approv.
Inventory Assistant Clerk PM Maintenance Req. Clerk
Entry Completed
Notification Checking
Notification Checking Completed
Inventory Assistant Clerk
Notification Denied
Status Change (Deletion)
PM Maintenance Req. Approv.
Status Change (Deletion) Completed
Notification Approved
PM Maintenance Req. Approv
Status Change (Accepted)
PM Maintenance Req. Approv
Status Change (Accepted) Completed
Figure 4. eEPC Diagram for Maintenance Notification
Identification of important information exchanged between the activities and representation of their relationships with the use of extended entity relationship diagrams (ARIS Data View). Generation of all the reports presented in Chapter 2. Validation of the results and presentation to the top management.
4. Conclusions and Further Research The proposed business modelling approach was applied in one of the largest companies in Greece. All business processes and activities of the company were modeled in the ARIS software using the suggested methods described in the paper. All three thousands and five hundred employees were included in the analytical organisational charts and their organisational and IT roles were identified in the models. This analytical representation enabled the appropriate reporting generation requested by the Top Management. This reporting helped the organisation to manage change realized due to the ERP implementation by providing the following benefits: Representation of the new organisational structure in the “after live” era. Identification of the new process models, as transactional activities traditionally operated by specific departments were transferred to the departments where they occurred. Analytical process and activity mapping and clear explanation of the participating organisational and IT roles. Identification of employees that could undertake specific activities (either manual or systemic) or could replace absent employees Control of the authorization profiles and roles of the employees having access to the IT systems and capability for improvement in their future design. Generation of helpful material for the employees and the activities in which they participate. Connection of the users’ manuals with the activities that each employee has to undertake, making the study of the support material easier and more focused (as each employee could identify the parts of the manuals that were of interest to him/ her). The ARIS software capability and the database support it offers, enabled the easy update and alteration of the business models, making the available documentation up-todate for every company employee. The real-time, standardized and exact representation of the organisational business models encouraged the initiatives for continuous process improvement and the participation of all the employees who could easier make suggestions for improved process operations. One of the identified areas that could further improve was the easier reporting generation and the need for employees’ computer literacy (outside the IT department) in order to be able to easily use the available documentation on-line. Moreover, the effort needed for the generation of the models raised questions concerning the successful applicability of the approach in smaller organisations. The proposed approach is now implemented in an enterprise of one thousand employees and further research conclusions are expected by the end of the year.
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