2. 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
4. 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.
5. 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
6. Business Process / Enterprise
(Process Oriented) Systems
Business process systems are crossfunctional
that is, the system boundaries are not
within a single
function but actually go across boundary
lines
7. 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
8. 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.
9. 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.
10. 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
11. 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
12. 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).
13. 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).
14. 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
15. 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
16. 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.
17.
18. BPR
How can Companies Identify their
Business Processes. Examples
Business functions
Manufacturing: As the procurement-toshipment process
Product development as the concept-toprototype process
Sales as the prospect-to-order process
Order fulfillment as the the order-topayment process
Service as the inquiry-to-resolution process
Business Processes
19. 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?
20. 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.)
21. 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)
22.
23. 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
24. 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
25.
26. 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.
27. BPR- How can Companies Identify their Business
Processes
High
Increasing
operating
performance
Manufacturing gap
versus industry leader
Maintain
Advantage
Catch up
Increase flexibility,
responsiveness
Differentiate
product and
services
Low
Low
Services / Marketing gap versus industry leader
High
Different competitive investment strategies facing industry players as they
consider there position versus industry leaders.
28. 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 can’t stay here
show your balance sheet
show competitors balance sheet
2: A “vision statement” - This is what we as a
company need to become
29. 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?
30. BPR
Simple Rules
Listen to customer
Enhance those things that bring value to the
customer or eliminate those that don’t
Be ambitious, focus your commitment to
radical change on the process
31. BPR
Process Improvement and redesign Process
Magnitude
Improvement
Increment
Innovation/Reengineering
Radical
Improvement
Sought
30-50%
10x-100x
Starting base
Existing Process
Blank skeet
Top management
commitment
Relatively low
High
Role of IT
Low
High
Risk
Low
High
33. The Seven Phases of Process
Re-generation
1. Strategy Linkage
2. Change Planning
kicks off project
secure management commitment
discover process opportunities
identify IT enabling opportunities
align with corporate strategy and select BPR project
inform stakeholders and organize re-generation team
prepare project schedule and set performance goals
3. Process Pathology
document existing process
uncover process pathologies
34. The Seven Phases of Process
Re-generation
4. Social Re-Design -- 5. Technical ReDesign (reiterative until satisfied)
explore alternative designs
design new process
design HR architecture (x-func/multi-discipline)
select IT platform
prototype holistic process
35. 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
36. The Seven Phases of Process Regeneration
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
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
37. The Seven Phases of Process Regeneration
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
38. 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
39.
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