How to Integrate ECM with ERP for Accounts Payable (Part 2)

This post also available in KMWorld Magazine.

 

If you recall, last time I gave you the run-down on the benefits of integrating enterprise content management (ECM) with enterprise resource planning (ERP), using accounts payable (AP) as an example. This time, I’m providing the steps to get you to a successful ECM-ERP integration and an ECM-ERP AP reference model that will help you conceptualize the target future state.

For those of you in the peanut gallery, I’ve chosen the back-office process of AP processing because it’s a good indicator when we look at how ECM will fit an organization. It's well-trodden ground, presenting relatively low risk, and a good place to start with ECM before tackling any line-of-business processes.

Tackling ECM for SAP AP in Multiple Incremental Phases

We recommend that you implement SAP AP in the approximate incremental phases:

Phase 1: Select a manageable set of staff using ERP (which may be a subset or everyone), and for them, focus on digitizing the documents, managing them with the ECM system and providing fast, reliable, easy access to AP clerks from within the ERP user interface (UI). In this phase:

  • Focus on capturing and digitizing invoices and related documents.
  • Look for good recognition technology candidates-evaluate the documents for classes that will be amenable to optical character recognition (OCR) and possibly intelligent document recognition (IDR). Those will be documents that have the appropriate physical characteristics, and are also worth it because they represent a significant volume or value. Implement where appropriate.
  • Focus on implementing the ECM system for managing the documents, and integrate the repository with ERP to provide AP clerks access from the SAP UI.
  • Look for processes that can be easily implemented with workflow, either using ERP or the ECM system.

Phase 2: Roll out the Phase 1 capabilities to most or possibly all staff who will be using ERP. (This is unnecessary if you got everyone in Phase 1 but is recommended if you have a large or complex set of ERP processes or user base.)

Phase 3: Enhance the implementation with more complex recognition, automation, workflows, records management and tuning. In this phase:

  • Expand the use of recognition technology and document automation to more challenging document classes.
  • Implement more complex workflows in ERP and the ECM system.
  • Implement full records management.
  • Use the reporting and analysis capabilities to tune the system and processes.
  • This enhancement may focus on a smaller subset of the users implemented in Phase 2 (in which case Phase 3 should be followed by a Phase 4 which, like Phase 2, rolls out the new capabilities to most or possibly all users). Alternatively, the new capabilities could be introduced to all users addressed in Phase 2, where appropriate.

Using the ECM-ERP AP Reference Model

The following reference model is specifically for AP, but it can apply to many similar processes. It breaks the process down into nine different activities, requiring different ECM capabilities. The different colors (green, red, yellow, blue) show which types of ECM systems are best suited for each of the nine different activities:

KMWorld-ECM-ERP-AP-Ref-Model

  • Granted, blue isn't a type of ECM system but rather the ERP system itself—such as SAP; PeopleSoft, Oracle and JD Edwards (now all oracle.com); Microsoft Dynamics, etc.
  • Green stands for the activities that are the core strengths of capture-centric solutions—such as ABBYY, Hyland/AnyDoc,EMC/Captiva, IBM/Datacap, Kofax, Parascript, ReadSoft, etc.
  • Purple stands for the activities that are the core strengths of ECM-centric solutions—such as EMC Documentum, IBM FileNet, Hyland, Metafile, OpenText, Microsoft SharePoint, etc.
  • Yellow stands for the activities that are adequately provided by advanced solutions in both the capture-centric and ECM-centric categories.

The purpose of a reference model is to help explain a complex situation-like how a complex business process (such as AP) can be decomposed into different activities, which in turn can be made more efficient by applying different ECM capabilities, which in turn can be addressed by the products of different vendors.

But it can also be used to explain the strengths and weaknesses of all the capture and ECM vendors mentioned above. And you can use it when you're figuring out your own ECM-enabled ERP strategy. Here are some simple examples:

  • If your primary requirement is advanced ERP integration, then you can pursue either a capture-centric or ECM-centric approach. Why? Because ERP integration is yellow.
  • If your primary requirement is advanced capture (with advanced document and character recognition for the invoices), then you should go with a capture-centric approach or supplement your ECM system with a third-party capture partner-unless your ECM vendor has acquired an advanced capture vendor. Why? Because the two capture activities are green.
  • If your primary requirement is just to digitize the invoices and other documents, without fancy OCR or IDR, and get them into a managed repository that staff can access from the ERP user interface, then you can go with an ECM-centric approach. Why? Because the repository-related activities are purple.

Questions? Comments? Send them my way – I will be happy to discuss them.

Rich Medina
Rich Medina
I’m a Principal Consultant and co-founder of Doculabs, and the resident expert in using ECM for information lifecycle management.