Once the goals of the project are clear, and when the company knows what they want to accomplish with their brand new ERP, it's time to go into details and write down, one by one, all the company processes that will have to be done or supported by Microsoft Dynamics NAV.
When you think about your processes, don't just expose what they should theoretically be. Ask the people who are actually carrying out those processes about what they really do. Also ask about the exceptions to the processes, as handling exceptions usually requires more time. So, you probably also want to manage those and try to reduce the required time. Finally, ask whether the process may change in the future and how.
For instance, you have probably been told that Dynamics NAV handles sales orders, sales shipments, and sales invoices documents. Of course, that is true but those three documents can be created, revised, accepted, executed, and posted in several different ways. You have to find the way (with the aid of the Dynamics NAV partner providing the implementation services) in which you want your Dynamics NAV to work, and for that, you need to know what you require.
For each process, at least the following questions have to be answered:
- What is the desired outcome of the process?
- What are the start and end points?
- What activities are performed?
- What is the order of the activities?
- Who performs the activities?
- What information is required (documents)?
- How often is this process done?
- What is the importance of the process?
What is the start point for your sales orders? Customers pick up the phone, call you and tell you exactly which items they want in what quantities. Or maybe you receive the orders by e-mail, or customers submit them in a website, or maybe your salesperson visits your customers and gets the sales order, or customers asks you for sales quotes which finally get accepted (and thus converted into a sales order) or rejected, or you have blanket sales orders for a certain period of time and you do not receive any further sales orders.
In reality, it is a combination of all of this and many other ways to get sales orders that have not been exposed here as an example. Anyway, you have to think of all (and all means all!) the ways in which you receive sales orders and write them down.
After sales orders are received, you probably check them for the following: do you have a minimum sales order amount, do you sell your items per unit or per box, if you sell per box, you probably have to check whether the quantities asked by customers are multiple of quantities per box, and do you establish a credit limit for your customers? If so, before serving the order you may want to check if the credit limit has been exceeded. You may also want to check the requested delivery date. Is it possible to serve the customer in time or should you talk to them and negotiate a different delivery date?
Once the sales order has been revised and accepted, it has to be executed. What does that mean? How do you prepare your shipments? Do you group orders per customer so that multiple orders get prepared and served together? Do you pick up items of all the orders of the day together and then pack them separately per order or per customer in the preparation area? Do you attach the sales shipment document to the pack?
And finally in the sales invoice document, how do you do your invoices, do you do an invoice per sales shipment at the same time the sales shipment is done, a sales invoice per sales order, or a single sales invoice per customer, at the end of the month, including all sales orders served in the current month?
Now that we have a bunch of questions and their answers, it is time to write it all down. While writing down your processes, you may find new questions that have to be asked and answered. For example, you may know that your process has two sequential activities, but you may not have a clear picture of what triggers the beginning of the second activity. That is probably a good question to ask to the people involved in the process.
Writing your processes in a structured way—preferably using any kind of business process modeling diagrams or workflows—will help you and other people to understand them, and will also allow you to rapidly measure how simple or complex a process is, identify bottlenecks, redundant work and, basically, where the weakness of the process lies so that it can be improved.
Let's go back to our example of getting a report of costs for a specific service. This process was done in the company before the implementation of Microsoft Dynamics NAV. It wasn't done monthly, though, as it took too long and it was done manually. By asking the people involved in the process, we found out the following:
- Desired outcome – The cost amount of a specific service in a specific year.
- Start point – The service contract has reached its end.
- End point – The cost amount of a specific service in a specific year.
- Activities and their order – The following is the list of activities performed:
- Prepare a list of the vendors that provide goods to this service.
- Go through all the purchase invoices of the vendors in the list prepared in the first activity.
- Determine whether the purchase invoice is complete or in a high percentage, attributable to the service that is being analyzed.
- If it is attributable to the service that is being analyzed, write down the purchase invoice amount in a spreadsheet.
- Ask the head of the department providing the service, who and in what percentage of their time, works for the service.
- Calculate the costs of human resources attributable to the service. Write down the calculated amount in a spreadsheet.
- Get the total purchase invoice amount corresponding to general supplies or costs (water supply, energy supply, phone, general insurances, and so on). Because of the actual accounting practices, this amount can be found in a specific general ledger account.
- Attribute to the service being analyzed a percentage of the total amount obtained in previous activity. The percentage attributable to the service will be calculated based on the human resources that work on it and the surface the service uses from the whole company's surface.
- Sum up all the amounts on the spreadsheet.
- People who perform the activities – All the activities are performed by a person in the administration department.
- How often is it done – It is done four or five times per year, each time for a different service.
- Importance – It is a very important process, as this report will be used when negotiating with the public authorities the income that the company will receive to perform this public service for the following years.
We can write down the activities, their order, and the relations with other activities using a flow chart. It will look similar to the following diagram:
