Lets get horizontal

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Lets get horizontal!

• Toward a process view of organizations

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objectives

• present the process view of organization
• describe business processes
• discuss business process reengineering

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reinventing organizations
old view
new view
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definition of business process
a specific ordering of work activities across
time and place, with a beginning, an end, and
clearly identified inputs and outputs
Davenport, 1993
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So, whats the difference?

• Function

Process
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typical business processes

• product development
• customer acquisition
• manufacturing
• order management
• human resource management
• planning resource allocation

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cross-functional processes product development
MARKETING
PRODUCTION
R D
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cross-functional processes order management
SALES
FINANCE
LOGISTICS
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examplesales logistics
sales order
delivery
payment
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SAP event process modelsales logistics
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value chain
support
infrastructure, hr, rd, procurement
primary
inbound logistics
operations
outbound logistics
marketing sales
service

• stream of activities
• part of larger value system
• applies to both products and services

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inter-organizational processes

• The 2000s will be about breaking down external
  walls integrating and redesigning
  inter-enterprise processes using the Internet
• -Michael Hammer

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real triviality quiz
Who is Michael Hammer?
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business process reengineering
Michael Hammer Father of Reengineering
Dont automate

• fundamental redesign of processes
• clean sheet of paper
• leveraging technology
• upgrading skill levels (aka fewer jobs)

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Hammers principles

• outcomes over tasks
• users of output do it yourself!
• process information at the source
• geography doesnt matter
• coordinate activities
• empower workers

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loan processingdesk-to-desk approach
credit reporting
origination of loan
pre- qualification
document generation
application processing
credit analysis underwriting
approval closing
servicing of loan
payment processing
escrow management
customer service
collections foreclosures
follow-up processing
valuation risk analysis
transfer to secondary mkt
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loan processingteam approach
loan origination team
regional production center
field rep laptop
loan servicing team
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BPR success stories

• Ford A/P
• eliminated invoices
• reduced headcount from 500 to 125
• Mutual Benefit Life
• revised application processing (from 30 steps,
  five departments, 19 people, 5 to 25 days to one
  person expert system, 4 hours)
• eliminated 100 positions

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summary

• presented the process view of organization
• described business processes
• discussed business process reengineering