Business Process Analysis

How to identify the current financial and operating structure for AS-IS study and conduct and document the current business baseline. It will further explore how to collect and analyze business volumes and metrics.

This is the first phase in ERP Implementation.

Identify Current Financial and Operating Structure 

Information about current and proposed organization structures may have been discussed during the applications acquisition cycle, and may have been one of the deciding factors in the selection of the application package.  Start the internal organization analysis by interviewing the highest-ranking financial official possible, since that position will likely have the most knowledge of the financial and operating structure of the organization. An organization’s operating structure drives the business and has a strong influence on the setup and use of the applications; however, the financial statements will reflect the operating structure to allow profitability, balance sheet and cash flow reporting, and analysis against that structure. Reporting and analysis begins by capturing and valuing operational transactions that occur at the specific event level. These events occur at a specific site that must be properly defined and ultimately set up at the correct organizational level and with the appropriate organizational attributes. 

Detailed Steps to document Financial and Operating Structure: 

• Interview organization management to obtain a clear understanding of current and proposed entity structure.
• Develop a chart showing the current organization structure
• Develop a business organization overview and listing.
• Define and chart the financial operating environment
• Define the financial and management reporting environment.

Conduct Current Business Baseline – Identify Cross Functional Processes 

Conduct base lining to develop a common understanding within the project team and across the organization of what cross-functional processes are in place to support the achievement of business objectives in the current environment. Awareness of current business requirements and unique processes today will educate team members and prepare them for the construction of future business processes. 

Because many current environments may not have been developed in an integrated fashion, and people have entered the organization at different times during the evolution of the current business systems, many people and departments may not fully understand the processes and requirements of other departments. An added benefit of base lining is the resulting cross-functional knowledge gained by team members. This information is invaluable during subsequent mapping of future business processes and requirements to new application functionality. 

Use structured process questionnaires to collect business and current system information during a business baseline interview for a given process. These questionnaires can be modified to help make sure that the team documents the following factors: 

• Business events — triggers for action (for example, receive invoice)
• Location, nature, and sequence of transactions — data added
• Magnitude and frequency of transactions
• Performance metrics core processes or critical transactions
• Key factors for success
• Key processes and process cost drivers
• Representative families or products and transactions
• Opportunities, constraints, risks, and issues
• Underlying structures of static data organization
• Bottlenecks to the flow of information and material
• The particular value of current business processes
• Data gathering methods that drive technology requirements
• Current system configuration options
• Schedule, confirm, and prepare for process definition sessions by business area.
• Identify the core business processes (level 1 if you are using Oracle Business Models) and write a Summary description of each process.
• Conduct interviews using the questionnaires and other sources of information to clarify questions you have identified.
• Gather any other current business materials that may enhance team understanding and documenting of Current business process requirements.
• Identify any issues regarding the current business analysis.

Gather Business Volumes and Metrics

The Business Volumes and Metrics documents the data volumes and processing frequency of the transactions on the new production system. To begin this task, examine all major business processes that transact moderate to high volumes of data (for example, customer orders, purchase orders, purchase requisitions, manufacturing orders, manufacturing receipts, invoices paid, and journal entries).

Concentrating on the resource-intensive areas allows you to assess when the new system will inherit the same volume and performance challenges. If you are working on a small, single-site implementation, it may seem that there are no performance risks. Do not minimize the importance of this task. The number of possible configurations can lead to performance problems, even for smaller implementations. 

Detailed Steps for Volume-Metrics Study: 

• Review the existing documentation
• Gather business process measurements.
• Extract business volumes from the current business and the Business Requirements Scenarios
• Summarize the business transaction volume statistics by functional area.
• Gather total data volume requirements.
• Total Data Volume Requirements
• Determine the critical processing period’s window.
• Gather system user counts by functional area.