Business process reengineering

1. Why outsource? What are key indicators that selection of a vendor IT solution to

implement business process reengineering may be the best decision? What are the

potential pros and cons? Provide examples where possible.

Business process reengineering is the process which involves the rethinking and

remodeling of the processes within the business for the purpose of attaining an

enhancement in the strategic and key sectors of a particular business, such areas

include the quality of products, the cost of the products as well as the qualities of the

services offered and the speed of delivery of those services (Hammer & Champy, 1993:

46). There exists several factors that can be used as potential indicators to show that

the selection of a vendor IT solution could be the best option in the implementation of

the business process reengineering. To begin with, dis-functionality of the current

system components is a major indicator for the implementation of an IT solution.

Shortfalls constantly recorded in particular portfolios are noted as being the worst

performing will need reengineering. Secondly, the importance of the particular process

and its influence on customer satisfaction. It is noted that the process that least provides

proper customer satisfaction is substituted with an IT solution that increases the speed

and the quality of services offered. Finally the feasibility of the reengineering process

also plays a fundamental role in the reengineering process. The organization considers

which portfolios can be successfully reengineered and hence helps in the decision to

acquire a proper vendor IT solution for the particular reengineering process. According

to Meyer Richard(1998), a business process refers to a specific predetermined set of

steps that are intended to produce a product or service, comprising all of the services

required to satisfy a particular customer’s request.

2. State and discuss the key strengths of service-oriented architectures, especially as

related to modern businesses. Support your answer(s).

Service oriented architectures are a complete and specific set of methodologies and

processes that are implemented in the development of business software’s. Service

Oriented Architecture is an architecture that serves to eliminate redundancies as well as

enhancing the delivery of services in the business organization. It mainly achieves this

by consolidating and reusing the services involved within the particular organization

.Such kind of architecture has proven to have several advantages over the other normal

set of architectures available for software development. To begin with SOA enables the

business functions to be able to be self reliant and dependable. This in turn will enable

the entire business process to be self reliant. In addition, SOA offers the required

functionalities in the form of an interface that is relevant to the offered services. This

offers the consumer an easy method of interacting with the system as well as acquiring

the products and services offered by the business organization. It also sets itself aside

as the architecture that a consumer involved with other application functionalities may

find useful to employ with another preferred application or service. SOA is able to

separate the implementation of the service from its actual interface. The service

provided is viewed as the endpoint which is support of a given contract or format. SOA

are also self bound dynamically as well as being discoverable. This is because it

supports service discovery concept. In this mode of service execution the consumer is

not required to know the request message format, until the particular service is actually

needed. It is also has modular and self-contained services in its structure. Its modular

decomposability allows the application to be split and divided into smaller more

manageable components.

3. Describe how environmental analysis, SWOT analysis, value chain analysis, and choice

of business strategy influence business process reengineering. Provide examples.

SWOT is an acronym that stands for Strengths, Weaknesses, Opportunities, and
Threats. It is an analysis tool that is used for understanding different situations that may

arise within the business organization; hence it can also be used in decision making for

a wide range of situations within the organization. SWOT analysis is used in the

development of the business, evaluation of the competitors within the market,

marketing, as well as the development of product reports and research reports. Prior to

conducting a SWOT analysis the organization carries out the PEST (Political,

Economic, Social and Technological) analysis. This helps the organization’s potential

within the market as well its potential basing on the external factors affecting the

organization. SWOT analysis can be effectively used in business process reengineering

where it can be used to determine a particular business position in the market, such as

its commercial viability, it could also be used as a method of distributing sales as well as

used to offer invaluable information on strategic options that may involve entering new

markets or even the timely launch of a company’s product. On the other hand

environmental analysis involves the careful considerations of all the external factors that

affect an organization in its activities of production. Bearing in mind that the typical BPR

projects include a cross-functional cooperation, it becomes highly necessary for the

organization to consider the impacts of the environment and changes that occur within

its environment. This in turn will serve as an impetus for the ongoing reengineering

process as it will enable proper establishment of guidelines during the reengineering

process.

4. Describe and rate the overall organization and information systems function in terms of

scorecards and methodologies provided by standards such as Capability Maturity Model

(CMM), Six Sigma, ISO 9000, and Balanced Scorecard.

The balanced score card is a business management methodology that offers an

approach to strategic management of an organization. It offers an insight into what

companies should put into consideration in order to measure and balance their financial

obligations as well as “perspectives”. The ISO-9000 is an international standards

organization rating of an organizations performance and quality of management in

industrial organizations. Six sigma is a process that offers help on focusing in the

production and delivery of high quality services and products. It is based on deviations

from the required standards where the management considers the shortcomings and

defects in their organizations products and services and tries to eliminate them

systematically in order to come up with a near-perfect product. These standards of

rating an organizations performance ensure high standards and quality of goods and

services offered while ensuring that the best managerial skills and principles are

employed in the business organizations processes. They serve to boost the consumer’s

confidence in a particular company’s products and or services that have been rated by

these standards. Such promotes the returns of the company as well as increasing its

profitability. It also extends to maximal utilization of the organizations resources ranging

from the labor to cost reduction while not compromising on the high degree and levels

of performance expected.

5. Rate the organization’s ability to achieve its overall goals, including high customer

satisfaction and superior return on investment, based on product and process

innovation, customer focus, knowledge management, strategic systems, and motivated

people.

Every organization has set goals and targets that are to be achieved within certain

boundaries of time and resources available. Regardless of these boundaries, the

organization is always expected to provide high quality output that considers the

customer satisfaction and exceed their expectations in terms of quality. High customer

satisfaction involves meeting the needs and requirements of the customer up to the

expected levels and standards that have been set. It involves producing products and

services that are of high quality and within the reach of the customer in terms of price

friendliness. In addition to that, an organization will be highly rated if it has a high level

of innovativeness and can be able to reinvent its product so as to always appeal to the

customer as well as be able to match the ever changing needs of the customer base.

Ina addition, it should always be able to meet the new requirements without

compromising the quality of the product. Knowledge management of the organization

also plays a fundamental role in ensuring that an organization is up to speed on the

developments within the markets and hence enabling it to appropriately adapt and be

able to compete with its competitors within the same field of production. Having

strategic systems within the organization involves having the appropriate managerial

and production systems that enable the organization to meet its demands and

obligations to the client satisfactorily.

6. Compare the organization and its systems and processes to the rest of its vertical

industry, based on industry best practices and benchmarks, including revenue and

profitability.

A vertically integrated organization is one which encompasses more than one single-

output process production in which there is an option of all the output from an

upstream process is utilized as a part of or of the whole quantity of one input

intermediates in a downstream process. In addition it is the “is the ownership and

control over neighboring stages of production or distribution”(Perry, 1989). Industry

level specialization is a major practice which is enhanced by advances in technology

as well as standards. This leads to the emergence of a group of producers as well

as the division of industrial processes into modular components, where the

equipment is split and reorganized to enhance the division of labor. Consider DIS

markets which the most successful as well as largest firms were initially vertically

integrated (Schlueter-Langdon 1999).

7. Based on the above indicators, predict the organization’s ability to conduct a

successful information systems project that meets or exceeds its stated goals, including

return on investment, appropriate functionality, successful implementation, and minimal

reversion to old systems/processes

By implementing the vertical industrial processes, an organization will be able to

conduct with great chances of success, an information systems project that will be able

to meet the organizations fundamental goals and also act as a means of implementing

its fundamental targets. The organization will be able identify strategies by which their

emerging industries can operate. The various settings with different levels of industry

concentrations could be created with the purpose of reflecting the prevailing and the

emerging conditions of the competitive market that the organization is in. this will give

the organization a competitive edge over its rivals.

8. Analyze the changes in external (and internal) environment, such as changes

introduced by the competition, regulatory changes in various markets, changing

customer needs and demographics, and systems and products nearing the end of their

life cycle(s).

In the constant endeavors by business to enhance their business processes and

improve the customer experience, many organizations have had to face a variety of

challenges, both from the internal and external environments of the organization. To

begin with there are changes that are competitor oriented which necessitate an

organization to reorganize its processes, for instance when a company’s costs become

higher than those of the competitors, they will be force to reorganize their business

processes. In addition to that, there could be an increase in the number of competitors

in the market, to cope with such changes the organization will be forced to reengineer

its processes. Apart from these changes in the economic environment also proves to be

a bottleneck to the organizations processes. Changing customer or consumer needs will

also pose a challenge to the organization for it to reorganize and remodel it processes.

Internal challenges such as over ambitious managers , found in company’s which are in

their peal conditions, will face the challenge of ever struggling to be way ahead of their

competitors, in order to maintain their market dominance over their competitors while

satisfying their consumer’s needs.

9. Identify and analyze changes in business strategy that have to accompany the changes

in the business environment.

For a business organization to remain competitive, it must identify and suitably adapt to

the changes that are constantly occurring within its environs. For instance trade offs are

a major change that businesses have to consider when faced with a situation that

challenges the company’s existence. Pursuing of sustainable development strategies is

also a change in the business strategy that business organizations must always

consider in order stay afloat with the stringent rules of development while cost cutting on

their operational costs. Internal changes in the business strategy include; increasing the

accountability of the business firms to nontraditional stakeholders as well as

encouraging the habit of continuous internal reporting. This increases the accountability

of the management as well as enhancing governance within the organization.

10. Identify and analyze changes in business process architecture that have to accompany

the changes in business strategy.

Changes in a company’s business strategy ultimately lead to changes in the business

process architecture of the business. Some of the changes that will be experienced in

the business architecture include changes in the baseline business context. This will

cause a reverting from one source of input into the system to other more reliable

sources of input. There will also be a change in the Target Business Architecture where

the organization will be required to describe its products and services in a new and

fresh manner.

11. Evaluate key existing business processes and systems in order to distinguish the

ones that are hard to duplicate and contribute directly to competitive advantage,

versus the ones that are not necessarily unique but are essential to conducting

business.

There exist several business processes which are essential for the fundamental

being of a business. These processes ensure the smooth running of the business.

To begin with there is the management process. This process oversees all the

system operations; such management systems include strategic management as

well as corporate governance. There also exists the operational process of the

business. These are at the epicenter of the business as they comprise the core

business activities. These contribute directly to the business competitive advantage

against the business rivals. Such operational processes include advertising,

purchasing, supplying as well as marketing of a company’s product and services.

This process is fundamental and quite difficult to duplicate from one instance to

another. Finally there are business support processes which are subsidiary

processes that facilitate and enhance the occurrence and success of the other core

processes. Despite the fact that such processes are easy to duplicate and replicate

their effect , they play a fundamental role in ensuring the smooth flow of the other

business processes.

12. Propose ways to ensure that these key processes and systems are not

compromised in the information systems project.

In the creation and development of a viable system, the system developers should

always bear in mind that the business process and systems should not be compromised

to ensure a smooth transition and flow during the implementation of the new system.

Consequently, by observing certain factors and procedures, this can be ensured. To

begin with , the system developers must set down clearly their missions and goals

expected to be attained by the new system to be created, in view of this, the system can

be broken down into modules which can be developed separately without majorly

interfering with the management and day to day running of the organization. The

different modules enhance the system development as each has its own attributes as

related to the whole process of creating a new system. In addition to that the system

developers should always consider a variety of techniques for modeling the system.

Such techniques as the business process modeling notation could be employed

whereby the developers represent the business process using tools known as workflow

diagrams.

13. In conjunction with business process owners and a process change committee, develop

workflow diagrams with swim lanes for each department/entity, documenting the current

state (IS) of the processes

14. In conjunction with business process owners and a process change committee,

develop workflow diagrams outlining the proposed (SHOULD or TO-BE) state of the

processes, including possible variations (COULD).

15. Develop use-case scenarios in Unified Modeling Language (UML), identifying the

design of steps in the proposed processes that involve automation and interfacing

with existing or new systems.

16. Make a determination regarding whether the system will be developed in-house or

by using external resources.

17. Is the organization in the business of developing information systems?

18. Can the organization truly do a better job than software vendors who are dedicated

to developing and implementing best-of-breed applications that already incorporate

industry best practices?

19. Can the solutions provided by software vendors be made to work for the

organization? At what cost? Will key internal processes have to be changed or

compromised dramatically? How difficult will it be to maintain modified code?

Solutions provided by software vendors can be incorporated into the organization and

made to facilitate the enhancement of the functionality within the organization. Such

solutions provide the organization with reduced redundancy and there is no duplication

of roles within the organization. The software vendors will be required to develop

program solutions that are able to tackle problems encountered by the organizations

members and also promote the organizations delivery of services and products to the

end user. Depending on the level of functionality required by the organization, the cost

of implementation of the software vendor solutions will vary from one organization to the

other. Organizations that heavily rely on manual systems and processes and require a

complete overhaul of the system will require more intense and cost intensive software

vendor solutions. With regard to such changes, the internal processes of the

organization will be changed to a varied degree, in the sense that deeper and more

intense vendor solutions implemented will result in more and intense and considerable

changes in the internal processes of the organization. The maintenance of the code will

highly depend on the participation of the end user and their interaction with the new

software installed or recommended by the software vendor.

20. In case there is no off-the-shelf application available that fits the bill, and the

organization chooses to outsource the development to a software vendor, what

methodologies will have to be adopted to ensure that outsourced development yields

the desired results? What does the organization stand to gain or lose by outsourcing

the development?

21. Compare the costs and benefits, tangible and intangible, of each approach.

22. Research software vendors who are industry leaders in the major enterprise

applications in categories such as ERP (Enterprise Resource Planning), CRM

(Customer Relationship Management), and LOB (Line of Business). Examine their

offerings for companies of various sizes and industries.

23. Document functional requirements focusing on the support of key business

processes (utilizing process diagrams of the proposed processes). Break down the

requirements into categories such as “mandatory” and “optional.”

24. Document technology considerations, including interfaces to pre-existing systems,

technology standards, and constraints of the IT infrastructure.

25. Identify reports, input forms, and other screen-shots needed by users at all levels of

the organization, and by users outside the organization.

26. Identify and make public the evaluation criteria and the precise formula that will be

used to compare proposals from competing vendors.

27. Develop detailed implementation timelines that the vendor will have to work with,

based on internal business cycles, customer service needs, and regulatory

standards (if applicable).

28. Research articles and Web links regarding best practices and trends in outsourced

software development.

29. Research available case studies on companies that have successfully managed or

completely failed at outsourced systems development, whether domestic or off-

shore.

30. Focus on the challenges and critical success factors relative to managing and

participating in geographically dispersed software development projects.

31. Rate the outsourcing organization’s capability maturity using CMM and its ability to

handle clients and projects of a size and industry similar to the case study at hand.

a. Conduct capacity planning for the new system.

b. Develop and implement a plan for conducting unit testing on each system

component, and load testing and integration testing on the overall system.

c. Develop and execute a plan for data migration and parallel operation of old

and new systems.

d. In the case of having to test system(s), component(s), and/or code from

external sources, the challenge is to create effective test plans that can

uncover underlying, hidden “problems.” How will this be addressed?

e. Address changes to management systems, job descriptions, organizational

structure, and performance measures.

f. Develop a plan to ensure that managers get evaluated using new metrics

based upon the redesigned processes.

g. Develop ways of predicting and dealing with the challenge of possible

reversion to earlier processes.

h. Examine and apply Critical Success Factors of change management.

i. Discuss best practices and case studies relative to successes and failures in

managing change in systems projects.

j. Discuss the importance of marketing the change to management and end-

users.

k. Address the involvement of upper management in ways that are appropriate

to the success of the project.

l. Discuss why people comprise the most important and complex aspect of

change in system implementation projects.

m. Explain the role of politics in process analysis and system implementation

projects.

n. Explain the need for, and appropriate role definition of, project champions.

o. Determine strike force creation and management. Discuss who is best suited

to be part of the “strike force” and if there is a need for multiple committees

outside of the strike force to conduct “public relations” and “selling” activities

with employees and stakeholders at all levels of the organization.

p. Discuss best practices and case studies relative to successes and failures in

managing the people aspect of change in systems projects.

q. Discuss ways to build and sustain project momentum by using “quick wins”

while continuing to engage unwieldy, complex problems that require longer-

term change management efforts.

r. Discuss ways in which facilitation can be provided to help end-users and

managers affected by system changes to come up with their own home-

grown strategies to deal with the changes. Contrast this with the approach in

which, not only is the change imposed from above, there is also no help

provided to the employees in the area of developing coping mechanisms.

s. Discuss how e-business applications may be more complex than internal

applications and involve multiple constituencies and stakeholders outside of

the organization.

t. Discuss protocols and standards in business-to-business applications,

including legacy approaches such as EDI (Electronic Data Interchange) and

newer approaches such as XML-enabled Web services (utilizing other

standards such as SOAP, UDDI, and WSDL).

u. Discuss the role of XML and its subsets that are optimized towards certain

vertical industries for creating, transmitting, and receiving business

transactions.

v. Discuss the role of emerging technologies such as WAP (Wireless Access

Protocol) and WML (Wireless Markup Language) that can be used to create

new applications for serving the customers in the e-business context.

w. Discuss the complexity of achieving real-time and batch interfaces with

systems owned by other entities, including customers and suppliers.

x. Discuss how IT/IS organizations within companies can serve a role in

strategic planning.

y. Discuss how IT can be an enabler toward positive change versus how it can

be a drain on corporate and societal resources.

z. Discuss why IT/IS personnel ought to think of themselves as facilitators and

problem-solvers in service to the stakeholders, process owners, and end-

users. Contrast this with a more adversarial situation where IT sees itself at

odds with the rest of the enterprise, or even with certain parts of the

enterprise.

aa. Discuss ROI models and total cost of ownership metrics in use in the industry.

Explain why ROI metrics are essential to the success of any IT/IS project or

application.

bb. Brainstorm ways in which IT personnel and managers can collaborate with

functional managers and process owners to help create new business models

and revenue sources, and realize improvements in competitive advantage,

employee satisfaction, and customer satisfaction.

32.

Business process reengineering

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