Business Process / Enterprise (Process Oriented)

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• Business Process / Enterprise (Process
  Oriented) Systems

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Information, Organizations, Processes and Control

• Hierarchical organizations of past years
• Today
• Process-oriented, Learning, Team-based, and
  Fast-cycle organizational models
• Flat, flexible, focused on core competence
• Inside, empowered, interfunctional teams of
  knowledge workers are reengineering and
  continually improving core business processes.
• Think globally and act locally

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Flattening the Organizational Structure
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Information, Organizations, Processes and Control

• To accomplish the organizations of the year 2000
  and beyond firms must change the way they are
  organized, and employees at all levels must
  become information literate - not just computer
  literate.

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Creating the Information Age Organization

• Transforming an Organization Requires more than
  just Changing the Structure.
• True change occurs deep within the organization
  as individuals and work teams redefine the way
  they work and the values that guide decision
  making and action.
• Managers need to rethink the nature of control
  and authority
• Smashing together the features of the hierarchy
  with features of an entrepreneurial firm will not
  work.
• Work must change and people must change
• New knowledge and skills are needed

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Business Process / Enterprise (Process
Oriented) Systems

• Business process systems are cross-functional
• that is, the system boundaries are not within a
  singlefunction but actually go across boundary
  lines

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BPR

• Business Process Redesign
• The fundamental rethinking and radically redesign
  of business processes to achieve dramatic
  improvement in critical, contemporary measures of
  performance such as cost, quality, service and
  speed.
• The implementation of deliberate and fundamental
  change in business processes to achieve
  breakthrough improvements in performance.
• Enabled by IT

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BPR

• Business Process Redesign
• Also known as Reengineering or Process
  Innovation is offered as an enabler of
  organizational transformation.
• Organization embrace a BPR approach when they
  believe that a radical improvement can be
  achieved by marring business process,
  organization structure, and IT change.

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BPR

• Hammer and Champy
• It is an all-or-nothing proposition that produces
  dramatically impressive results. Most companies
  have no choice but to muster the courage to do
  it. For many, reengineering is the only hope for
  breaking away from the ineffective, antiquated
  ways of conducting business that will otherwise
  destroy them.

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BPR

• BPR Objectives
• To dramatically reduce cost
• Reduce time
• To dramatically improve customer services or to
  improve employee quality of life
• To reinvent the basic rules of the business e.g.
• the airline industry
• taco bell from Mexican food to fast food to
  feeding people anywhere, anyhow.
• Customer satisfaction
• Organizational learning

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BPR

• Change
• To transform an organization, a deep change must
  occur in the key behavior levels of the
  organization
• jobs, skills, structure, shared values,
  measurement systems and information technology.
• Role of IT
• BPR is commonly facilitated by IT e.g.
• Organizational efficiency
• Effectiveness
• Transformation

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BPR

• Efficiency
• Applications in the efficiency category allow
  users to work faster and often at measurable
  lower cost
• Mere automation of manual tasks, resulting in
  efficiency gains (least deep)
• Effectiveness
• Applications in the effectiveness category allow
  users to work better and often to produce higher
  quality work.
• Requires changes not only in technology, but in
  skills, job roles, and work flow (deeper).

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BPR

• Transformation
• Applications in the the transformation category
  change the basic ways that people and departments
  work and may even change the very nature of the
  business enterprise itself.
• A major change in the organization, including
  structure, culture, and compensation schemes
  (deepest).

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BPR

• Process
• A process is set of logically related tasks
  performed to achieve a defined business outcome
• A collection of activities that, taken together,
  create value for customer e.g. new product for
  customer. This tasks are inter-related tasks

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Business Function --

• Business Function --A group of similar resources
  that perform similar activities or tasks.  
• This is also called a task-oriented approach
  where the emphasis is placed on perfecting the
  execution of individual tasks.Functional IS
  Systems -- also known as "silo" systems supported
  one business function

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 BUSINESS FUNCTION    IS SYSTEM
   Logistics     Procurement
   Production / Operations     Material Resources Planning
   Finance / Accounting     Accounts Payable
   Human Resources    Payroll
   Sales / Marketing    Sales Order Management
When information from one IS system was needed by
another business function, then periodically
information would pass from one IS system to the
other.
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BPR

• How can Companies Identify their Business
  Processes. Examples
• Manufacturing As the procurement-to-shipment
  process
• Product development as the concept-to-prototype
  process
• Sales as the prospect-to-order process
• Order fulfillment as the the order-to-payment
  process
• Service as the inquiry-to-resolution process

Business Processes
Business functions
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Advantage of a business process

• The inherent advantage of a business process is
  that its performance can easily be measured
  against the attainment of the goal. 
• Looking at the business function systems --  how
  is performance measured?

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Business process

• IT Systems organized around business processes
• Enterprise Resource Planning (ERP)
• or Business Engineering (BE)
• or ENTERPRISE SYSTEMS (ES)
• Packaged, application software (modules) designed
  to address common business processes (across
  industries and business functions)
• Evolved, in part, from MRP (Materials Resource
  Planning) concepts,  thus the 'rp' in erp and
  mrp
• Typically, vendors assume some customization and
  integration will be required -- but customization
  will NOT be to the core 
• Vendors also assume system infrastructure exists
  (including RDB, client, servers, browsers,
  network, etc.)

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Common Features

• On-line system with no traditional batch
  interfaces
• One database for all data
• Clear definition of every data items
• Efficient support of back-office transaction
  processing weaker in decision support and
  analytical support but improving
• Templates for processes of best practices
• Client/server computing, network infrastructure,
  RDB, GUI, Web Enablement
• Proprietary language and tools (e.g. ABAP/4 for
  SAP R/3)

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Advantages

• Tight integration among all modules
• Single view of the business --     same db,
  consistent reporting and analysis
• Process orientation streamline processes
• Rich functionality templates reference model
• Flexibility current and new environment
• Scalability small group vs. enterprise
• Expandability modular vs. total systems
• Interoperability with 3rd party solutions
• Rapid implementation "vanilla" version

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Challenges

• High cost with low payoff is the norm when
  vanilla version not implemented
• Difficult to change /test all aspects that are
  affected simultaneously
• Difficult to design a new process that's an
  improvement (particularly when the
  organization's structure is an issue)
• Difficult to find/build software for new process.
  
• Difficult to change all aspects simultaneously
• Learning Curve Realities 
• Idiosyncratic support needs are the norm

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BPR- How can Companies Identify their Business
Processes

• How can Companies Identify their Business
  Processes.
• Dysfunction Which process are in the deepest
  trouble
• Important Which process have the greatest impact
  on customer
• Flexibility which process are the most
  susceptible to redesign.

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BPR- How can Companies Identify their Business
Processes
High
Catch up
Increasing operating performance
Manufacturing gap versus industry leader
Increase flexibility, responsiveness Differentiat
e product and services
Maintain Advantage
Low
Low
High
Services / Marketing gap versus industry leader
Different competitive investment strategies
facing industry players as they consider there
position versus industry leaders.
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BPR

• Embarking on Re-engineering
• Persuade people to embrace or at least not to
  fight -the prospect of major change by developing
  the clearest message on
• 1 A case for action- Here is where we are as a
  company and this is why we cant stay here
• show your balance sheet
• show competitors balance sheet
• 2 A vision statement - This is what we as a
  company need to become

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BPR

• Simple Rules
• Start with a clean sheet of paper.
• With my current experience what can I do today
• If I were to re-create this company today, given
  what I know and current technology, what would it
  look like.
• How will I be focusing, organizing and managing
  the company?
• Transition from a vertical functional departments
  to one that is horizontal, CUSTOMER focused and
  process-oriented?

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BPR

• Simple Rules
• Listen to customer
• Enhance those things that bring value to the
  customer or eliminate those that dont
• Be ambitious, focus your commitment to radical
  change on the process

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BPR

• Process Improvement and redesign Process

Improvement Innovation/Reengineering
Magnitude Increment Radical Improvement
30-50 10x-100x Sought Starting
base Existing Process Blank skeet Top
management Relatively low High commitment Role
of IT Low High Risk Low High
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Magnitude of Change 
Source Adapted From O'Hara, Watson and Kavan
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The Seven Phases of Process Re-generation

• 1. Strategy Linkage
•  kicks off project
•  secure management commitment
•  discover process opportunities
•  identify IT enabling opportunities
•  align with  corporate strategy and select BPR
  project
• 2. Change Planning
• inform stakeholders and organize re-generation
  team
• prepare project schedule and set performance
  goals
• 3. Process Pathology
• document existing process
• uncover process pathologies

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The Seven Phases of Process Re-generation

• 4. Social Re-Design -- 5.  Technical Re-Design 
  (reiterative until satisfied)
• explore alternative designs
• design new process
• design HR architecture (x-func/multi-discipline)
• select IT platform
• prototype holistic process

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The Seven Phases of Process Re-generation

• 6. Process Re-Generation
• implement HR changes 
• develop deploy IT support  -- tug of war game
  -- forces towards catastrophe and towards the
  ideal
• re-organizing
• teams
• jobs
• training
• top management communication and persuasion
  critical here
• 7. Continuous Improvement
• measure performance
• link to quality improvement

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The Seven Phases of Process Re-generation

• A. Imperative    "Prove the need"
• Positive ("this change" is a big chance to grab
  it all)
• Negative (without "this change" we will die)
• B. Leaders     Instigate and Sustain the
  change    "Walk the talk" and "Block escape"
• brave
• fearless
• communicative 

• 1. Strategy Linkage
• a. kicks off project
• b. secure management commitment
• c. discover process opportunities
• d. identify IT enabling opportunities
• e. align with  corporate strategy     select BPR
  project
• 2. Change Planning
• a. inform stakeholders     organize
  re-generation team
• b. prepare project schedule     set performance
  goals

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The Seven Phases of Process Re-generation

• 3. Process Pathology
• a. document existing process
• b. uncover process pathologies

• C. Levers    the tools-- changed
  processes, people, technology, environment   
  "Power the transition" and "Demonstrate new
  reality"
• rewards/punishments
• peer pressure
• forced environmental/technological changes -- "no
  going back"
• stakeholder feedback

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The Seven Phases of Process Re-generation

• 4. Social Re-Design -- 5.  Technical Re-Design 
  (reiterative until satisfied)
• a. explore alternative designs
• b. design new process
• c. design HR architecture (x-func/multi-discipline
  )
• d. select IT platform
• e. prototype holistic process

• D. Affected Agents    all those affected by the
  change    "Segment them" -- 
• "Strategy and communication tactics for     
  each"
• customers
• suppliers
• strategic partners
• stockholders
• community neighbors

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• 6. Process Re-Generation
• a. implement HR changes 
• b. develop deploy IT support  -- a tug- of-
  war game on forces aimed towards catastrophe and
  the ideal
• c. re-organizing
• teams
• jobs
• training
• d. top management communication     top
  management persuasion     ( critical here)
• 7. Continuous Improvement
• a. measure performance
• b. link to quality improvement

• E.  Buoys     Stabilizers ( life
  preservers)      for affected agents    
  Exploit
• camaraderie
• consistency
• core competencies
• cultural values
• strategic relationships