Modern erp marianne bradford pdf

JOURNAL OF EMERGING TECHNOLOGIES IN ACCOUNTING American Accounting Association Vol. 12 DOI: 10.2308/jeta-51253 2015 pp. 169–188

Using Process Mapping to Reveal Process Redesign Opportunities during ERP Planning

Marianne Bradford North Carolina State University

Gregory J. Gerard Florida State University

ABSTRACT: The objectives of the Elizor Case are to give students experience with business process analysis by requiring them to first document an ‘‘as is’’ raw materials purchasing process during the planning for an enterprise resource planning (ERP) system implementation and then to have students determine issues inherent in the process that will necessitate process redesign. Students will learn the difference between two types of process redesign—business process reengineering (BPR) and business process improvement (BPI)—synthesize this knowledge in order to identify process issues inherent in the case, and suggest process redesigns that an ERP system will need to provide so that the purchasing process is more efficient, effective, and controlled. The case has broad appeal for faculty teaching ERP systems and/or business process management.

Keywords: enterprise resource planning (ERP) systems; business process improve- ment; business process reengineering; process mapping; purchasing process; expenditure cycle; case study.

INTRODUCTION

E lizor Co. (‘‘Elizor’’) is a mid-sized manufacturer of modern office furniture, specializing in chairs, desks, sofas, and cubicle spaces. The company was founded in 1970 and employs 375 people, primarily at its Durham, NC manufacturing facility. It also has six showrooms

located in North Carolina and South Carolina and more than 250,000 square feet of warehousing and storage space. Elizor has also established a customer-facing web presence for business-to- business (B2B) sales and is considering e-commerce solutions for its suppliers. Their mission is to ‘‘produce such amazing office furniture you’ll never want to leave work.’’

Elizor recently has experienced a great deal of growth and is in the process of expanding its production and storage capacity and adding a new line of ergonomic office furniture. Because of this, management is interested in obtaining an understanding of its current business processes and existing functionality because they want to implement an enterprise resource planning (ERP) system in the near future. They believe an ERP system will help them solve their current problems,

Published Online: August 2015 Corresponding author: Gregory J. Gerard

Email: ggerard@business.fsu.edu

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ensure their business processes are as effective and efficient as possible (e.g., non-value-added steps are minimized), and maintain better internal controls over operations. Current business issues Elizor faces are:

! long cycle times for key business processes, including raw materials purchasing; ! desire for growth, in particular the launch of a new product line; ! need for advanced functionality and technologies; and ! too many outdated business systems supporting business processes.

Over time, Elizor’s processes have developed organically, with very little attention to optimization. Additionally, since the early 1990s, Elizor has used various information systems to support its core business processes, such as the raw materials purchase-to-pay process. Two systems support this process: CODE, a financial accounting system that maintains the general ledger (GL), accounts payable/cash disbursements, accounts receivable/cash receipts, and produces the financial statements; and EPT, a procurement system that handles vendor management, inventory management, purchase requisitions, and purchase orders.

Elizor’s top management has formed an ERP project team, which will play a critical role in the success of the ERP project. This team includes process owners, end-users, managers, and IT staff, who span functional boundaries, locations, and organizational levels of the company. One of the first tasks in planning for an ERP system implementation is to document the ‘‘as is’’ processes to help determine requirements for a new ERP system and identify current process ‘‘pain points’’ that the ERP system should rectify or that could be rectified prior to implementation.

The ERP project leadership team is made up of Elizor’s most valuable and knowledgeable employees—the ‘‘best and brightest,’’ including Joe Wall from purchasing and Martha Long from accounting. Both of these individuals have ERP implementation experience at previous employers and are considered by management to be employees who will likely embrace organizational and procedural change, influence others in a positive way, and work well with others. These individuals were also chosen because management believes they have a clear understanding of the relationship between the operational requirements of the business, corporate strategy, and customer satisfaction.

Joe and Martha will begin documenting current ‘‘as is’’ processes, engaging key business process owners to brainstorm ways to improve key business processes, and incorporating these ideas into new ‘‘to be’’ processes that will be supported by the new ERP system. Thus, Joe and Martha will be responsible for planning, organizing, leading, and managing the business process documentation stage of the project.

An ERP system implementation can bring radical, dramatic changes to processes, known as business process reengineering (BPR), which involve major overhauls of processes to achieve breakthrough performance. Companies must reengineer to match the best practices programmed in the ERP software—the software dictates the way processes will be conducted. Other changes to the processes may be more incremental, depending on how closely current processes line up with the new ERP system. This type of change is known as business process improvement (BPI), which is a relatively minor change compared to BPR but still very effective. Elizor will likely experience massive changes to their business processes when implementing the ERP system (BPR), but will also tweak processes prior to the implementation (BPI). BPI is also something that is done throughout the operation and maintenance stage of an ERP system to further fine-tune business processes.

Joe and Martha also have experience with process mapping, but realize that it is important to determine process mapping standards so that there is consistency in how the process maps are drawn (see Appendix A for their process mapping standards and conventions). One of the first processes that Joe and Martha chose to map out is the raw materials purchasing process. This process has been fraught with inefficiencies for years, including a long cycle time, which has

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negatively affected customer satisfaction. The longer it takes to get raw materials to the plant, the longer it takes for customers to ultimately receive their orders. In addition, Elizor’s mission of producing ‘‘amazing office furniture’’ places utmost importance on purchasing high-quality raw materials. In the past, Elizor has received inferior materials from its suppliers.

Below is the narrative that Joe and Martha compiled after a lengthy group interview session in which manufacturing, purchasing, accounts payable, receiving, and warehouse employees were interviewed together in order to arrive at a consensus on the process steps. Joe and Martha chose the group interview method because it can be more accurate than other methods given that all stakeholders of the process steps have to simultaneously agree on how the process currently works. Additionally, the high degree of participation that this method requires generally increases the ownership that the group feels regarding the redesigned process map and, more importantly, the business process.

Elizor’s Raw Materials Purchasing Process

The manufacturing supervisor in Durham enters purchase requisitions into the EPT system, which triggers emails to the purchasing clerks. The purchasing clerks read the emails and decide whether the request is for a known or unknown part. If what is needed is a known part, and there is a preferred supplier for the material in the EPT system already, then a purchasing clerk emails a purchase order (PO) to the supplier for the item(s) requested. If what is needed is not a known part, then a purchasing clerk sets up a new part in the EPT system and performs traditional new vendor sourcing activities to determine an appropriate supplier for the material. Once these steps are complete, a purchasing clerk emails a PO to the chosen supplier. If no supplier exists for a known part, then a purchasing clerk must still perform sourcing activities and send the PO to the newly identified supplier.

When the raw materials arrive, they are inspected for quality by the receiving department. If the quality is deemed substandard, then the goods are immediately sent back to the supplier. The raw materials passing quality inspection are then sent to the warehouse employees who count them for accuracy and prepare a receiving report. Warehouse employees then decide where a good place to store the materials in the warehouse might be and send the receiving report to the manufacturing supervisor as proof the raw materials have been received. The manufacturing supervisor will then sign the receiving report as confirmation the material has been received.

Purchasing clerks receive supplier invoices in a variety of ways, but the process after receipt is always the same. First, they check each invoice for accuracy against the PO and make sure the appropriate pre-negotiated discounts and payment terms are included (e.g., 2/10 n 30). If there are any issues, they consult the supplier and make the corrections. The clerks then send the corrected invoice and PO to the accounts payable clerks in the accounting department. If there are no issues, then the supplier’s invoice is sent directly to the accounts payable clerks.

Next, accounts payable clerks will assign GL account numbers (to show the increase in inventory [debit] and the accounts payable [credit]) and the cost center number (e.g., what job the material should be charged to) for management accounting purposes. Accounts payable clerks will then enter the information into CODE and a voucher number will be automatically generated. Supporting documentation is printed and filed in the accounts payable file folders until payment is due.

REQUIRED

Requirement 1: ‘‘As Is’’ Process Map

Using standard process mapping symbols and referring to the example process map presented in Appendix A, draw a process map for Elizor’s raw materials purchasing process. Your instructor may require that you use a flowcharting package, such as Microsoft Visio, or may allow you to

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draw the map by hand. Include phase symbol(s) to separate distinct phases in this process and label. For simplicity, the supplier swim lane may be omitted.

Requirement 2: Business Process Reengineering (BPR) and Business Process Improvement (BPI)

Using the BPR and BPI information in Appendix B (in particular Tables 1 and 2) and the template below, list eight BPI process issues or BPR principles that need to be applied to the raw materials purchasing process. For each of these issues, describe a redesign that could be made to the raw materials purchasing process to improve efficiency, effectiveness, and/or internal control (two illustrative examples have been provided in the template to help you begin). Turn in the below template as the deliverable for this requirement.

BPR Principle or BPI Process Issue Elizor’s Process-Specific Issue

Example: BPI process issue: Paper records; non-value-added steps

The receiving report does not need to be sent to the manufacturing supervisor. He/she should be able to see inventory availability in a system without a paper report.

Example: BPI process issue: Manual steps; BPR principle: capture data once at its source

The cost center data should be entered once in the creation of the purchase requisition and automatically carried through to accounts payable without data rekeying.

1. 2. 3. 4. 5. 6. 7. 8.

REFERENCES

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Adesola, S., and T. Baines. 2005. Developing and evaluating a methodology for business process improvement. Business Process Management Journal 11 (1): 37–46.

Andrews, C. 2007. Drawing a map of the business. Internal Auditor 64 (1): 55–58. Bradford, M. 2015. Modern ERP: Select, Implement and Use Today’s Advanced Business Systems. 3rd

edition. Raleigh, NC: Lulu Press. Carpenter, T. D. 2007. Audit team brainstorming, fraud risk identification, and fraud risk assessment:

Implications of SAS No. 99. The Accounting Review 82 (5): 1119–1140. Damelio, R. 1996. The Basics of Process Mapping. New York, NY: Productivity Press. Dennis, A., T. Carte, and G. Kelly. 2003. Breaking the rules: Success and failure in groupware-supported

business process reengineering. Decision Support Systems 36: 31–47. Hammer, M. 1990. Reengineering work: Don’t automate, obliterate. Harvard Business Review 68 (4): 104–

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New York, NY: Harper Business. Harmon, P. 2007. Business Process Change: A Guide for Business Managers and BPM and Six Sigma

Professionals. 2nd edition. Burlington, MA: Morgan Kaufmann.

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http://www.isixsigma.com/tools-templates/process-mapping/practical-guide-creating-better-looking-process-maps/
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Mertins, K., and R. Jochem. 2005. Architectures, methods and tools for enterprise engineering. International Journal of Production Economics 98: 179–188.

O’Leary, D. 2000. Enterprise Resource Planning Systems. Cambridge, UK: Cambridge University Press. Page, S. 2010. The Power of Business Process Improvement: 10 Simple Steps to Increase Effectiveness,

Efficiency, and Adaptability. New York, NY: AMACOM. Paradiso, J., and J. Cruickshank. 2007. Process mapping for SOX and beyond. Strategic Finance 88 (9):

30–35. Porter, L. D. 2013. Process Mapping: Dissecting Processes for Optimal Performance. Presentation at the

2013 CUPA-HR Midwest Region Conference, May 20, Columbus, OH. Process Mapping Associates Inc. 2007. Process Mapping. Available at: http://www.processmaps.com/

mapping.html Rohleder, T., and E. Silver. 1997. A tutorial on business process improvement. Journal of Operations

Management 15: 139–154. Samia M., G. Siha, and H. Saad. 2008. Business process improvement: Empirical assessment and

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control and business process reengineering—Survey results. International Journal of Operations and Production Management 23 (4): 418–429.

Smith, M. L. 2010. BOLO (Be On The Lookout) List for Analyzing Process Mapping. Available at: http:// www.isixsigma.com/tools-templates/process-mapping/bolo-be-lookout-list-analyzing-process- mapping/

Tønnessen, T. 2014. Business process reengineering. In Managing Process Innovation Through Exploitation and Exploration: A Study on Combining TQM and BPR in the Norwegian Industry, 33. Wiesbaden, Germany: Springer Gabler.

Tradewinds Group, Inc. 2004. Business Process Reengineering and Improvement. Available at: http://www. tradewindsgroupinc.com/Tradewinds_Business_Process_Improvement_White_Paper.pdf

APPENDIX A

Process Mapping

Introduction to Process Mapping

A business process is a collection of activities that together add value to input and transform it

to output (Harmon 2007; Paradiso and Cruickshank 2007). Business processes span multiple

departments and in many cases traverse the boundaries of the organization, sharing information

with business partners, such as suppliers and customers.

Process maps are a system diagramming method that visually illustrates the essential details of

a business process (in a way that written procedures cannot) by replacing many pages of words with

boxes and arrows.1 They provide a visual rendering of a business process from beginning to end,

including the inputs and outputs of each activity, the sequence of activities, and the person or

persons performing each activity, allowing stakeholders to ‘‘see’’ the process from start to finish (Damelio 1996). This visualization provides a powerful way to explore what activities work well,

1 This paper uses cross-functional process mapping symbols and terminology. We acknowledge that certain instructors may prefer other diagramming methods such as business process modeling notation, which is conceptually similar to process mapping. Instructors could feel free to substitute their preferred method for the diagramming method we use in this case.

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dx.doi.org/10.1016/j.ijpe.2004.05.024
http://www.processmaps.com/mapping.html
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http://www.isixsigma.com/tools-templates/process-mapping/bolo-be-lookout-list-analyzing-process-mapping/
http://www.tradewindsgroupinc.com/Tradewinds_Business_Process_Improvement_White_Paper.pdf
http://www.tradewindsgroupinc.com/Tradewinds_Business_Process_Improvement_White_Paper.pdf
which do not, and where there may be non-value-added steps, costs, or control issues (Tradewinds

Group, Inc. 2004). Specifically, process maps indicate:

! What is happening? ! Where is it happening? ! When is it happening? ! Who is doing it? ! How are inputs and outputs handled and distributed? (Process Mapping Associates Inc.

2007).

Process Mapping Symbols

Figure 1 describes typical process mapping symbols (Bradford 2015; Damelio 1996).

The Role of Process Mapping in ERP System Implementations

Mapping out current ‘‘as is’’ business processes can help an ERP project team develop functional requirements for an ERP system (Andrews 2007). The ‘‘as is’’ process maps will also be compared to the ‘‘to be’’ ERP vendor-supplied process maps to see where change will occur as the organization reengineers to best practices in the ERP software. For example, during the ERP

FIGURE 1 Process Mapping Symbols

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package selection stage, it would be critical to know that an organization ships line items on a customer order from different plants. The ERP system must support this functionality, which might not be evident until processes are fully mapped out. Sometimes, this exercise will generate responses such as ‘‘Do we still do that?’’ ‘‘You mean, you guys don’t review that report after all?’’ or ‘‘Why are we doing it this way?’’ As the team reviews the ‘‘as is’’ maps, it will begin to question ‘‘why?’’ and will find many opportunities for change (Smith 2010).

Guidelines for Drawing Process Maps

The following guidelines should be followed when drawing process maps:

! Have a clear purpose for mapping a process. ! Label the scope of the process at the top of the process map. ! Determine the roles that participate in the process. These become the ‘‘swim lanes’’ across

the page. ! Identify the trigger, which denotes the start of the process. For horizontal maps, the trigger,

designated with an oval, should be placed in the top swim lane left justified. ! The page shows the passage of time, so activities should generally move left to right and top

to bottom. ! Label activities with active verbs such as ‘‘input,’’ ‘‘correct,’’ ‘‘move,’’ and ‘‘order.’’ ! Enter data, information, or physical goods flowing between activities directly on the process

flow lines. ! Label decisions in the form of questions. Label process flow lines that branch out of

decisions with the outcomes (e.g., yes/no). ! When activities are performed by multiple roles, the activity should span multiple swim

lanes. (Abubakker 2010; Jacka and Keller 2011).

As an example, Figure 2 shows a narrative and a process map of the current state ‘‘as is’’ bi- weekly payroll process for Fit Gear, a manufacturer of ‘‘fit’’ apparel. This ‘‘as is’’ process map reflects the way Fit Gear currently conducts this process. By reviewing the process map, process designers can pinpoint redesigns that will make the process more efficient and effective.

APPENDIX B Business Process Reengineering (BPR) and Business Process Improvement (BPI)

Business Process Reengineering

Many companies today use ERP and other technologies to reengineer their processes. This type of reengineering is known as technology-enabled business process reengineering (BPR)—the ERP system or other technology serves as the ‘‘road map’’ or ‘‘engine of process automation’’ for the reengineering initiative (O’Leary 2000; Tradewinds Group, Inc. 2004). When BPR occurs, it causes a fundamental, dramatic redesign in business processes. Companies embarking upon an ERP implementation generally are not changing their core competencies—the capabilities critical to a business in achieving competitive advantage—but instead are optimizing their business processes in order to make them more efficient and customer-centric (Hammer 1990). These companies are striving for business processes that are streamlined, standardized, and of superior quality in order to better serve customers, increase employee morale, and improve the company’s ability to anticipate, manage, and respond to changes in the marketplace (Hammer and Champy 1993).

ERP systems and the reengineering that ensues facilitate the transformation of businesses from being functional-oriented to process-oriented. If a company succeeds with an ERP system

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FIGURE 2 Example Narrative and Process Map

(Fit Gear Bi-Weekly Payroll Process for Plant Employees)

Panel A: Narrative Describing the Bi-Weekly Payroll Process for Plant Employees at Fit Gear

Panel B: Fit Gear Process Map Page 1 of 2

(continued on next page)

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implementation, then there is a shift to a new way of thinking. Rather than focusing narrowly on

activities within functional areas (such as accounting and purchasing), users are focused on cross-

functional processes (e.g., the entire purchase to pay process) (Tønnessen 2014). ERP systems and

BPR move the company from a silo mentality to a process-centric mentality, in the hopes of reducing

costs, improving customer satisfaction, and ultimately creating shareholder value (O’Leary 2000).

Undertaking an ERP implementation and the resulting BPR is generally a complex and difficult

task, and in the past has been met with a high failure rate. Thus, organizations should not implement

ERP without a careful examination of all activities and phases of a current ‘‘as is’’ process (Dennis,

Carte, and Kelly 2003; Schniederjans and Kim 2003). These should include the process activities,

people’s jobs and reward system, the management system, and tools and technologies (Tønnessen

2014). Last, it is necessary to investigate the underlying corporate culture that holds the beliefs and

values that influence everyone’s behavior and expectations when embarking upon a BPR project

(Mertins and Jochem 2005). Hammer’s (1990) BPR principles are presented in Table 1.2

FIGURE 2 (continued)

Panel C: Fit Gear Process Map Page 2 of 2

Bradford (2015) used with permission of author.

2 Hammer’s (1990) BPR principles refer to clean-slate techniques, which does not predispose what the end solution (technology or system) for redesigning and automating processes will be. However, these principles are relevant to how an ERP system can benefit companies. The principles still allow for current-day technologies such as mobile computing and cloud computing.

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Business Process Improvement

Another method companies use to redesign processes to prepare for ERP (or after ERP implementation to tweak new processes to make them even more effective and efficient) is known as business process improvement (BPI), which is the gradual improvement to business processes over time. Whereas BPR is radical and revolutionary, BPI is incremental and evolutionary. While BPR is necessary for a successful ERP implementation, BPI is simply not enough. The scope and intensity are much smaller for BPI than BPR, but the goals are very similar: strive for business processes that are streamlined, standardized, and of superior quality in order to better serve customers, increase employee morale, and improve the company’s ability to anticipate, manage, and respond to changes in the marketplace (Page 2010). A general rule is that if an existing process is somewhat close to expectations, then maybe it can be improved. If not, then maybe the current process is fundamentally broken and radical change is necessary (Rohleder and Silver 1997).

Figure 3 presents a model for BPI. First, goals and objectives of the process improvement plan must be identified and the appropriate organizational support must be obtained. A process improvement team should also be assembled. The next step is to compile a process inventory, identifying key processes, including their sub-processes and activities. A process inventory is a list of business processes that a department or area owns. Processes can be identified by reviewing the work done by a department, analyzing job descriptions, or talking to colleagues to ascertain their roles and responsibilities (Adesola and Baines 2005).

From this process inventory, a list of processes in need of change can be determined and prioritized. Those processes that have a big impact on the business and will net the largest return if improved should be ranked first. The feasibility of making the change should also be considered. Benchmarking with competitors can often help determine processes in need of improvement. As a result of these steps, the first process will be selected for improvement (Samia, Siha, and Saad 2008; Rohleder and Silver 1997).

Next, information must be obtained about the process from process owners and experts. It is usually necessary to include knowledgeable sources from various departments for a complete view

TABLE 1

Business Process Reengineering Principles (Hammer 1990)

1. Have those who use the output of the process perform the process (reduce or eliminate handoffs).

2. Empower workers (give employees information and they can make decisions).

3. Treat geographically dispersed resources as though they were centralized (centralize data through a common database).

4. Link parallel activities instead of integrating their results (do not wait until the end of a process to merge the results).

5. Organize around processes, not tasks or functional area (use ERP systems, technology, and best practices).

6. Self-service; move cost and accountability for work to the beneficiary of a process (responsibility for information accuracy also transfers with self-service).

7. Put the decision point where the work is performed and build controls into the process (use automated controls in the process and transfer the responsibility for checking from management to the worker).

8. Capture information once at its source (data should be entered one time where it originates and then dispersed to those who need it).

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of a process. The BPI team should also document the ‘‘as is’’ process so that everyone involved understands how the process currently works. The process documentation should be verified with

stakeholders to make sure it correctly reflects the existing process (Page 2010; Rohleder and Silver

1997).

The next step is to analyze the process to pinpoint any problems. The BPI team should also

attempt to take measurements of the process, such as costs and cycle times. It will be useful to elicit

feedback from users to make sure all problem areas are noted. Additionally, the potential benefits

from improving the process should be carefully considered (Rohleder and Silver 1997).

Once the current process has been analyzed and measured, it is time to improve the process.

The team should use brainstorming techniques (Carpenter 2007) while challenging everything. New

prototypes of process flows, policies and procedures, and reporting requirements should be developed. The team should also consider where errors and other risks can occur in the new

process, and design internal controls, such as segregation of duties (Page 2010).

The team should also use technologies and tools to automate steps where appropriate and

create new metrics to show if the process works as planned. When implementing changes, the team

should effectively communicate with all key stakeholders about why the new process is needed,

what it is, how things will be different and better, and what will happen when the new process is in

operation. Performing a ‘‘walkthrough’’ of the new process is one way to build a detailed understanding of the process and see how it will work (Porter 2013).

Last, the company should embrace the new mindset and drive continuous improvement. Rather

than thinking of process improvement as a project that has a beginning, middle, and an end, it should be envisioned as an ongoing activity that is tied to all technology and business activities

critical to enterprise operations. At regular time intervals, the team should gather data on the

performance of the new process to measure its success (Porter 2013; Rohleder and Silver 1997).

Note that BPR might be necessary at two points in Figure 3. When defining and understanding

the process, it may surface that the process is persistently and profoundly broken. At this point,

BPR might be necessary. Additionally, if BPI techniques are applied and the process continues to

be of key concern, then BPR is generally the next step (Rohleder and Silver 1997).

FIGURE 3 Business Process Improvement Model

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Table 2 lists common issues found in business processes that can result in non-value-added

costs and long cycle times. As an illustration, Table 3 contains an explanation of the business

process issues evident in the Fit Gear example introduced in Appendix A.

TABLE 2

Business Process Improvement Process Issues (Smith 2010)

Authority ambiguity When two or more people are providing approval, this may be unnecessary as it reeks of bureaucracy and increases cycle time of the process.

Bottlenecks When a number of information flows lead to a single activity, the process may be hindered by insufficient resources dedicated to the roles and events downstream. Bottlenecks can limit the performance or capacity of the entire system, delaying or completely stopping the process.

Cycle time The time consumed during the entire process flow should be at the heart of performance measurement, providing focus on the length of time it takes from start to finish.

Data duplication Occurs when multiple groups involved in the process begin maintaining their own separate information systems. Consequently, the same data are then kept in multiple places.

Handoffs Involve the transfer of responsibility from one role to another, providing the opportunity for mistakes, miscommunication, and delay.

Intermediaries Words such as ‘‘pass it by me’’ include an intermediary step. Consider if this step is value-added.

Manual steps Technology and systems could be implemented to take the place of manual steps, which are labor-intensive and add to cycle time and errors.

Old ways Technology and systems are available but not used because employees have not been trained (or have been trained and do not want to use them). Employees revert to ‘‘old ways of doing things.’’

Quality control Quality control is when someone else checks work, not when someone checks his/her own work. Is the quality control really needed? Can the work be mistake-proofed to make it impossible for the defect to pass on? Prevention is better than detection.

Paper records Question whether the current process is adding, maintaining, or eliminating paper records. Storing data in electronic form is optimal as the data then become easier to share.

Rework This refers to people spending time fixing errors or remediating problems. The source of the errors should be investigated and modification to the process made to eliminate the potential for errors.

Role ambiguity Denotes lack of clarity about the expectations, norms, and behaviors associated with a particular job. Ambiguity can lead to inefficiencies in processes.

Segregation of duties violations

Employee should not be in the position to perpetrate and to conceal fraud. In general, duties to be segregated among employees are: (1) custody of assets; (2) authorization or approval of related transactions affecting those assets; (3) recording or reporting of related transactions.

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TABLE 3

Redesign Opportunities in the Fit Gear Bi-Weekly Payroll Process

BPR Principle Not Followed/BPI Issue Explanation

1. Capture data once at its source; Data duplication; Non-value-added work

Data are collected on timecards, entered into Excel, and then entered again into TEMS. Data should be collected just once and entered into the system. A time and attendance module that integrates with TEMS so time card machine is not used.

2. Self-service; Those that use the output of the process perform the process

Instead of the payroll clerk entering master data updates, we should consider using self-service for this function by allowing employees access into the system to update their master data.

3. Segregation of duties; Authority ambiguity; Intermediaries

Payroll clerk should not be entering employee master data updates. HR manager or someone in HR should be doing this. Also, HR manager should not be approving payroll.

4. Handoffs For such a simple process, there are too many handoffs. A question might be why the receptionist is involved in this process.

5. Bottlenecks The receptionist is a bottleneck with the ability to hold up or completely stop the payroll process.

6. Rework; Quality control There appears to be a lot of time spent on fixing errors and remediating problems.

7. Paper records Use direct deposit instead of paper checks; this will also help with internal control. Use electronic time cards not paper time cards.

8. Manual steps Payroll is one process that is outsourced in many companies. Fit Gear should perform a cost/benefit on whether they should outsource this function. Payroll is not their core competence.

Using Process Mapping to Reveal Process Redesign Opportunities during ERP Planning 181

Journal of Emerging Technologies in Accounting Volume 12, 2015