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SAP Workflow use spreading beyond financials to compliance, utilities, HR

An old standby in SAP ERP, SAP Workflow, is seeing wider adoption as companies seek help with compliance and auditing trails.

SAP Workflow continues to be a mainstay for SAP shops looking to find business process efficiencies, but it’s being applied to more than just financial processes and is increasingly becoming a tool to tackle compliance issues.

SAP Workflow’s bread and butter has been in managing financial processes. The tool set is used to manage and grant permissions for who can see and grant approvals. It’s increasingly being applied to human resources and supply chain processes as well.

In turn, compliance mandates are driving Workflow use cases, especially in the utilities, pharmaceuticals and financial industries, several Workflow consultants said. In Europe, for example, rules and regulations for billing between different companies in the utilities sector have changed in the last few years, and Workflow is being used to manage those relationships.

“You always need a trail of who has touched a product or assets that go through a workflow,” said Pete Lagana, an SAP consultant with Excellis, who helped put Wyeth’s supply chain workflows in place. “When using Workflow in a highly regulated environment, auditing is one of the biggest drivers.”

Workflow certainly isn’t new; it has been in use for years at large SAP shops to manage and improve complex processes. The core of the workflow engine is quite stable, said Irineo Salazar, a longtime Workflow consultant. There haven’t been many “revolutionary changes” over the years -- more evolutionary improvements, including some better APIs and more sophisticated interfaces.

There is a clear and strong business case for invoice processing, often in connection with purchase requisition approval, Salazar said. There’s money saved or earned by avoiding late-payment fines and taking advantage of early payment discounts, better relationship with suppliers resulting from prompt payment, and transparent status of invoice processing, as well as proactive clarification of matching issues between purchase order, goods receipt and invoice, which can result in better terms and conditions.

“All of this adds up to an extremely quick return on investment,” Salazar said.

Using Workflow for incoming document processing is also becoming popular for customer service-oriented corporations ranging from banks and insurance to telecommunications firms, he said. It helps quickly process documents from new business -- such as applications for new accounts, credit cards, insurance policies, requests for change of information, and even complaints.

“In combination with records management and retrieval solutions such as customer folders and claims management folders, not only are documents processed more efficiently, customer service personnel are able to retrieve all information and documents relevant to a customer in real time, whenever needed,” Salazar said. “Increased responsiveness to customers is an important competitive advantage.”

At Wyeth, Lagana said the company used Workflow to improve processes in the manufacturing plant. It allowed the company to see data down to the time a product went through each supply chain step. If a product stayed in one building too long, it was easier to identify where the inefficiencies were by looking at factors like lead and lag time.

“It’s a highly regulated environment,” Lagana said. For businesses that run on SAP, traditional workflow is the best way to put checks and balances in place.“Workflow is worth its weight in gold.”

In Europe, Salazar is seeing a lot of SAP Workflow projects in the utilities industries. Organizations are looking to Workflow for processes needing a high degree of coordination among different groups within a corporation.

Workflow is also widespread in human resources (HR)-related processes, such as travel and expense approval, forms and payroll-related processes.

Workflow can be used to improve almost any process. Higher education organizations are also seeing the benefits of Workflow. Organizational structures at universities are different from those of a private company, said Steve Bogner, a longtime SAP HR consultant and managing partner with Insight Consulting Partners.

For example, Workflows are created to manage all of the necessary steps of awarding a grant. When a professor is awarded a grant, his records need to be updated, so that his salary gets charged to that grant. Someone has to start a cost assignment workflow. Someone in the accounting department starts that, it goes to the Dean’s office for approval, and from there it goes into the HR system to be updated.

Advice on extending the use of SAP Workflow

Many SAP shops still perceive Workflow as complex, and a lot of smaller organizations are scared of it, Salazar said. Companies view Workflows as being expensive, and hard to maintain.

But there are Workflow best practices for successful projects.

SAP Workflow is a very powerful tool, which is the first thing that should be clarified before beginning a new project, Salazar said.

Start with simple, quick-win solutions, he said. Avoid going in at the deep end of the pool and building complex, expensive solutions at once without knowing how much of the functionality will really be used or will really provide benefits to the company.

“Take an object-oriented approach using BOR objects or ABAP objects, avoid using too many container variables in Workflow implementation, as they can make maintenance difficult,” he said.

In addition, Salazar said, don’t overdo the loops, and don’t hard-code.

“If you don’t hard-code them, you’ve already won,” he said. “A lot of problems arise from Workflow templates being made in a non-flexible way.”

Many users tend to have a lot of fantasies -- having queries for everything, having lots of questions.

Do the core process first and then extend Workflow’s use. Use Workflow where it’s useful, where there is bulk, where there is large volume. If there are 100,000 invoices a year and certain exception five times a year, the ROI of creating a Workflow there is very doubtful.

“In my experience, it turns out that more than half of the stuff is not really used,” Salazar said. “The trick is to manage expectations, keep things simple from the beginning, and let it grow with time, with user experience.”

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