IT and Changing Business Processes


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  • IT and Changing Business Processes

    1. 1. IT and Changing Business Processes <ul><li>Define: ERP, Enterprise Information System (EIS), business process, TQM, BPR </li></ul><ul><li>Discuss the advantage of a business process perspective to a silo perspective </li></ul><ul><li>Distinguish the basic characteristics of TQM and BPR </li></ul><ul><li>Indicate when an enterprise system should not drive BPR </li></ul><ul><li>Discuss the application of EIS </li></ul><ul><li>Discuss revolutionary design with evolutionary implementation </li></ul>
    2. 2. Architecture & Infrastructure <ul><li>Define: client/server, server, thick client, thin client, mainframe, legacy system </li></ul><ul><li>Distinguish architecture from infrastructure </li></ul><ul><li>Discuss the relationship between strategy, business requirements, architecture, and infrastructure </li></ul><ul><li>Discuss the applicability of evaluation criteria to architecture and infrastructure </li></ul><ul><li>Analyze infrastructure and architecture needs across hardware, software, data and networks </li></ul><ul><li>Apply Total Cost of Ownership (TCO) </li></ul>
    3. 3. IS IT an Enabler or an Inhibiter?
    4. 4. Business Process Perspective <ul><li>Business process includes </li></ul><ul><ul><li>A beginning and an end </li></ul></ul><ul><ul><li>Inputs and outputs </li></ul></ul><ul><ul><li>A set of tasks to transform inputs to outputs </li></ul></ul><ul><ul><li>A set of metrics for measuring effectiveness </li></ul></ul><ul><li>Crosses functions </li></ul><ul><li>Offers a “bigger picture” than silo perspective </li></ul>
    5. 5. Comparing Silo & Business Process Perspectives Cross-functional Functional Focus Interrelated, sequential set of activities and tasks that turns inputs into outputs Self-contained functional units Definition Business Process Silo
    6. 6. Comparing Silo & Business Process Perspectives Avoiding work duplication and cross-functional communication gaps; Organizational effectiveness Highlighting & developing core competencies; Functional efficiencies Good for Optimizes on organizational goals – Big picture Suboptimizes on functional goals Goal Accomplish-ment Business Process Silo
    7. 7. Total Quality Management (TQM) <ul><li>Process by which managers make changes continually (and often incrementally) to improve business processes over time </li></ul><ul><li>Management philosophy where quality metrics drive performance evaluation of people, processes, and decision </li></ul><ul><li>Improve business activities with the goal of zero defects </li></ul>
    8. 8. Total Quality Management <ul><li>Choose business process to improve </li></ul><ul><li>Choose a metric by which to measure the business process </li></ul><ul><li>Enable personnel involved with the process to find ways to improve it according to the metric </li></ul>
    9. 9. Business Process Redesign (BRR) <ul><li>Radical redesign of organizational business processes to attain more aggressive improvement goals. </li></ul><ul><li>Reengineering - Fundamental rethinking and radical redesign of a business process to achieve dramatic improvements in performance (Hammer, 1990) </li></ul><ul><li>Starting over </li></ul>
    10. 10. Key aspects of BPR <ul><li>Need for radical change </li></ul><ul><li>Cross-functional business perspective </li></ul><ul><li>Challenging old assumptions </li></ul><ul><li>Networked (cross-functional) organization </li></ul><ul><li>Empowerment of employees </li></ul><ul><li>Measurement of success via metrics tied to business goals </li></ul>
    11. 11. BPR vs. TQM <ul><li>BPR </li></ul><ul><li>Radical improvements </li></ul><ul><li>Change existing processes </li></ul><ul><li>TQM </li></ul><ul><li>Incremental improvements </li></ul><ul><li>Tweak existing processes </li></ul>
    12. 12. Definitions <ul><li>Enterprise Information System (EIS) - distributed system that covers the entire organization </li></ul><ul><li>ERP – A type of EIS; a large highly complex software program that integrates many business functions under a single application </li></ul><ul><li>Legacy system - older or mature IS (often 20-30 years old) </li></ul>
    13. 13. ERP Characteristics <ul><li>Integrated modules such as manufacturing, accounting, HR and sales </li></ul><ul><li>Commercial packages – require long-term relationship with vendor </li></ul><ul><li>Best practices </li></ul><ul><li>Some assembly required </li></ul><ul><li>Evolving – moving toward web-based systems </li></ul>
    14. 14. ERP <ul><li>Most widely used – SAP’s R/3 (Others – PeopleSoft, Baan, Oracle) </li></ul><ul><li>All modules can easily communicate with one another </li></ul><ul><li>Tool for centralized operations & decision making </li></ul><ul><li>Growing need to integrate ERP applications within companies and across trading partners </li></ul><ul><ul><li>middleware for 24/7 B2B applications (ERP databases and B2B applications) </li></ul></ul><ul><li>Average TCO of $15 million </li></ul>
    15. 15. When an EIS should drive BPR <ul><li>Organization is new and does not yet have processes </li></ul><ul><li>Organization does not rely on its operational business processes as a source of competitive advantage </li></ul><ul><li>Current systems are in crisis and time, knowledge or resources are too short to make correct </li></ul>
    16. 16. Total Cost of Ownership <ul><li>Popular when PC-based IT infrastructures began gaining popularity </li></ul><ul><li>TCO = capital investments + technical support + administration + training </li></ul><ul><li>Helps managers understand how infrastructure costs break down </li></ul><ul><li>Annual costs per user for each potential infrastructure choice </li></ul><ul><li>Shared vs. isolated </li></ul>
    17. 17. Strategy, Requirements, Architecture & Infrastructure <ul><li>Strategy </li></ul><ul><li>Business Requirements </li></ul><ul><li>Architecture </li></ul><ul><li>Infrastructure </li></ul>
    18. 18. Information Architecture <ul><li>High level map of info requirements; blueprint </li></ul><ul><li>Centralized: </li></ul><ul><ul><li>data </li></ul></ul><ul><ul><li>communications </li></ul></ul><ul><li>Decentralized: </li></ul><ul><ul><li>focus on organizational function </li></ul></ul><ul><li>Translates strategy into infrastructure </li></ul><ul><li>Hard to define: needs change </li></ul>
    19. 19. Information Infrastructure <ul><li>Physical facilities, services, management supporting computing resources </li></ul><ul><ul><li>hardware </li></ul></ul><ul><ul><li>software </li></ul></ul><ul><ul><li>networks & communications </li></ul></ul><ul><ul><li>data </li></ul></ul><ul><ul><li>personnel </li></ul></ul>
    20. 20. Evaluation Criteria: Applicability
    21. 21. Meta Group Guidelines for Adaptable IT A&I <ul><li>Plan modular (independent and loosely coupled) vs. monolithic </li></ul><ul><li>Have clear boundaries between infrastructure components </li></ul><ul><li>With network architecture, provide access to all users when it makes sense to do so </li></ul>
    22. 22. Architecture Definitions - Client/server <ul><li>Client - PC or workstation attached to a network which is used to access shared network resources </li></ul><ul><li>Server - machine that provides clients with services (i.e., sharing databases, software) </li></ul><ul><li>Thick client - full function stand-alone computer that is used either exclusively or occasionally as a client in a client/server architecture </li></ul><ul><li>Thin client - computer hardware designed to be used only as a client in a client/server architecture (Network PCs) </li></ul>