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MD 240 IT Planning and BPR

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The VERIZON Phone Book Supply Chain. Moved to MA in August, 2000 ... opportunism lack of borders. trust adaptability to change. technology. Tools for BPR ... – PowerPoint PPT presentation

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Title: MD 240 IT Planning and BPR


1
MD 240IT Planning and BPR
2
Overview
  • Business Process Reengineering
  • Evolution of IT Planning
  • Operational Planning
  • Managerial Planning
  • Strategic Planning
  • Modern Issues in IT Planning
  • Models of IT Planning Process

3
Case Study The VERIZON Phone Book Supply Chain
  • Moved to MA in August, 2000
  • Ordered service 10 days before moving here
  • Got service 11 days after promised (strike)
  • gt 30 days later still no phone books
  • 40 days after telemarketer calls, suggests Im
    satisfied with VERIZON services, I blow up
  • Nasty letter sent to feed.back_at_bellatlantic.com
  • 48 hour turnaround guaranteed
  • No response
  • 60 days after I call customer service again,
    finally reach someone who UPSs me phone books
  • No record of me ever having placed 3 orders for
    phone books

4
Business Process Reengineering
5
Business Process Reengineering (BPR)
  • BPR is not a specific technique
  • BPR is not a production planning concept
  • BPR is
  • An idea or belief that entrenched business
    processes can be changed and can be improved
  • A process of questioning why things are done a
    certain way, and not accepting the answer Thats
    just the way we do it.
  • Just because someone has always done it this
    way does not mean that it is the correct or best
    way

6
Business Process Reengineering (BPR)
  • Fundamentally rethinking business processes
  • Radically redesigning business processes
  • Objective is to achieve dramatic improvements in
  • cost
  • quality
  • flexibility
  • delivery speed
  • service

7
Business Process Reengineering (BPR)
  • Identifying opportunities for BPR (Hammer and
    Champy 1993)
  • Can several jobs be combined into one?
  • save labor costs, greater simplicity in process,
    less time through process
  • Can workers make decisions that were previously
    reserved for managers?
  • faster response time, flatter organization, fewer
    employees, lower cost
  • Can the steps in the process be performed in a
    more natural order?
  • faster response times
  • Can processes be designed to be more flexible,
    and thus to handle more contingencies?
  • provide faster turnaround times for easier jobs
  • Can work be performed where it makes the most
    sense?
  • i.e., locally or distributed, instead of
    centralized, for faster turnaround times

8
Business Process Reengineering (BPR)
  • Why does BPR relate to IT?
  • IT often codifies or fixes the way a business
    does business at one time
  • Innovation in IT makes possible new ways to
    codify how the business does business
  • Manufacturing/Service processes
  • Strategy/Business management processes
  • Business Process Reengineering is almost always
    enabled by information technology
  • Conversely No new IT that can enable
    breakthrough business processes No BPR

9
Issues Driving BPR
10
Issues Driving BPREnvisioned Modern Information
Systems
Back Office (includes ERP Apps)
Front Office
CRM Apps
Customer
Web
Partners
Marketing and Fulfillment
e-Mail
Customer Service Billing
Purchases
Call Center
WWW email
Loyalty Retention Programs
Prospect or Customer
Sales Cross-sell Up-sell Telesales
History
Application Integration
SFA
Customer
Touch Points
Telephone
Field Sales and Service
Operations
POS
Marketing
Direct Mail
Contact Management
Technical Infrastructure
Billing
Wireless
(Source Kalakota and Robinson, e-Business 2.0,
p. 192)
11
Issues Driving BPRCommon Internal Business
Problems
  • Many customer touchpoints
  • Many suppliers
  • Many independent legacy applications within
    functional areas
  • Little information about activities in supply
    chain
  • Poor inventory management practices
  • No/poor information provided to customer service
    reps or to other customer touchpoints

12
Issues Driving BPRCommon External Business
Problems
  • Three Cs
  • Customers today know what they want, what they
    are willing to pay, and how to get products and
    services on their own terms.
  • Competition is continuously increasing with
    respect to price, quality, selection, service,
    and promptness of delivery.
  • Change continues to occur. Markets, products,
    services, technology, the business environment,
    and people keep changing, frequently in an
    unpredictable and significant manner.

13
Issues Driving BPRCommon Problem Stovepipe
  • The Stovepipe
  • Stovepipe because of lack of cooperation
    between functional areas (vertical dimension)
  • Business process reengineering (BPR), which
    undertakes a fundamental change in specific
    business processes, integrates information
    required for good decision making

14
Integrated Information Flows Remove the Stovepipe
Effect
Vendors, Suppliers
Organization
Customers
Distribution
Logistics, Services
Purchasing
Finance
R D
Production
Sales
Distribution
Product development
Order fulfillment
Planning, resourcing, and control
Customer service
Business processes across functional areas
and organizational boundaries.
15
Issues Driving BPRCycle Time Reduction
  • Want to decrease the total time from order
    placement to final delivery
  • IT allows the combination or elimination of
    steps, or of entire activities, in the business
    process
  • Telecommunications, the Internet and intranets
    cut communications times
  • through the use of e-mail and EDI
  • allows collaboration in the design and operations
    of products and services

16
Issues Driving BPRFrom Mass Production to Mass
Customization
  • Mass production
  • Produce large batches of same item to attain low
    unit costs
  • Mass customization
  • A company produces large volumes, yet customizes
    each product to the specifications of individual
    customers
  • high volume economies of scale
  • order size of one economies of scope product
    variety

17
Issues Driving BPRPush-based vs. Pull-based
Supply Chains
PUSH
PULL
18
Issues Driving BPRNetworked vs. Hierarchical
Organizations
Hierarchical Organization
Networked Organization
19
Issues Driving BPRFrom an Hierarchy to a Network
Hierarchical Organization
Network Organization
Flattened Organization
20
Issues Driving BPREmpowerment
  • The vesting of decision-making or approval
    authority in employees
  • Giving permission to the workforce to unleash,
    develop, and utilize their skills and knowledge
    to their fullest potential
  • For the good of the organization as well as for
    themselves
  • Company provides the framework in which this can
    be done

21
Empowerments Relationship to Information
Technology
  • Employees need information to make decisions
    about how to perform their jobs
  • IT provides the right information
  • at the right time and place
  • at the right quality
  • at the right cost
  • IT provides tools to make decisions
  • IT provides tools to monitor quality of their
    work
  • IT provides online training to employees who need
    more skills and higher levels of skills

22
Issues Driving BPRTeams
  • Types of teams
  • permanent or work group teams
  • problem-solving teams
  • quality circles, participating teams
  • management teams
  • virtual teams
  • IT empowers team members and provides the
    necessary communication links among teams

23
Issues Driving BPRVirtual Corporations
  • An organization composed of several business
    partners sharing costs and resources for the
    purpose of producing a product or service
  • Often temporary, with a one-time objective
  • Major attributes
  • excellence full utilization
  • opportunism lack of borders
  • trust adaptability to change
  • technology

24
Tools for BPR
25
Tools for BPR
  • Model the Existing Organizational Structure
  • Flow diagrams
  • Work analysis
  • Workflow software
  • Simulation and visual simulation tools
  • Analyze the Organizational Performance
  • Simulation and visual simulation tools
  • Design, Test and Quickly Deploy a New
    Organizational Structure
  • Unified Modeling Language (UML)
  • Rapid application development tools
  • CAD/CAM, imaging technologies, EDI,
    interorganizational systems, expert systems
  • WWW

26
Tools for BPR
  • Modern IT infrastructure may be a required
    investment in order to undertake BPR
  • Questions
  • What is the current installed base of information
    systems applications, databases, networks,
    desktop computers, etc.?
  • What IT architecture and infrastructure will the
    envisioned (post-BRP) systems require in order to
    operate successfully?
  • Cost vs. benefits of the IT investment to
    facilitate the post-BPR system?

27
Tools for BPR
  • Top management must champion the approach
  • Employees at every level have to buy into the
    approach
  • Change management techniques
  • Use appropriate planning tools
  • Alleviate internal politics
  • Otherwise, BRP could be a disruptive and costly
    failure

28
IT Planning
29
IT Planning
  • IT Planning is the organized planning of IT
    infrastructure and applications portfolios done
    at various levels of the organization

30
IT Planning
  • Strategic Information Systems Plan
  • Identifies a set of computer-based applications
    that will help the company reach its business
    goals

31
Evolution of IT Planning
32
Evolution of IT Planning
Operational Planning
Managerial Planning
Strategic Planning
1-3 yrs
Operational Planning
Managerial Planning
3 yrs
Operational Planning
1950s
Today
33
Evolution of IT PlanningOperational Planning
  • Operational Planning Activities
  • Methods for developing new systems
  • Project management methods for managing
    development of new applications
  • Ex Waterfall Method SDLC
  • Monitor systems to ensure efficient operation of
    completed systems

34
Evolution of IT PlanningManagerial Planning
  • Managerial Planning Activities
  • 1960s/1970s
  • Charge-back of costs incurred while operating
    system back to the departments using the system
  • Today
  • IT Steering Committee performs
  • Identifies IS that might be beneficial for end
    user needs
  • Cost-benefit analysis of systems
  • Prioritizing IT investments based on needs and
    available resources
  • Create a development schedule over which the
    applications will be implemented

35
Evolution of IT PlanningStrategic Planning
  • Strategic Planning Activities
  • Long Term
  • Develop a Strategic IT Plan for 5-10 years into
    the future
  • Medium Term (Managerial Planning)
  • Identify Applications Portfolio of approved
    projects consistent with Strategic IT Plan
  • Short Term (Operational Planning)
  • Tactical Plan identifies budgets and schedules
    for current-year projects

36
Modern IT Planning Issues
37
Modern IT Planning Issues
  • Alignment
  • Aligning IT Plan with the organizations business
    plan
  • Aligning IT Plan with functional (e.g.,
    Marketing, Operations) plans
  • Information Architecture
  • Choosing and designing an appropriate information
    architecture for the organization
  • Resource Allocation
  • Allocating limited resources appropriately to
    competing IT projects
  • SDLC Management
  • Completing IT projects on time and within budget

38
Modern IT Planning IssuesEx Aligning IT Plan
with Operations Plan
  • IT Planning
  • Strategic IT Plan (5-10 yrs)
  • Long range hardware
  • Infrastructure resource requirements
  • Medium Term Plan (1 yrs)
  • Development schedule
  • Applications portfolio
  • Tactical Plan (current year)
  • Schedules for current projects/activities
  • Short term responses to technology and
    environment changes
  • Operations Plans
  • Capacity Decisions (2 yrs)
  • Facility planning, facility location
  • Process choice
  • Aggregate Planning (1 yr)
  • Work force levels
  • Overtime
  • Subcontracting
  • Overall inventory levels
  • Scheduling (day-to-day)
  • Allocate available resources to jobs, orders,
    activities, tasks

39
Modern IT Planning Issues
  • IT Planning for Inter-Organizational Systems
  • Must be able to involve hundreds or thousands of
    trading partners
  • IT Planning for Multi-National Corporations
  • Decision whether to decentralize or centralize IT
    planning and operations
  • IT Planning for Web-based Systems and E-Commerce
  • Web applications replacing traditional IT
    applications
  • Web applications need to be integrated to legacy
    systems, ERP, etc.
  • Web-based applications should be designed to
    directly support IT strategy and goals

40
Improving the IT Planning Process
41
Basic IT Planning Stages
  • Align the IT Plan with Business Plan
  • Business Plan
  • what you are selling (org./business mission)
  • what your revenue model is (Acct./Finance)
  • how it will be marketed (Marketing)
  • how you will produce/execute (Operations)
  • Design an IT architecture for the organization
  • Allocate IT resources efficiently
  • Complete IT projects on time and within budget

42
Conceptual Models of the Strategic IT Planning
ProcessDefining IT Requirements
43
MODEL 1Wetherbes Four IT Planning Stages
  • Strategic IT Planning
  • establish the relationship between (1)
    organizational plan and (2) the IT plan
  • Information Requirements Analysis
  • identify broad, organizational information
    requirements to establish a strategic information
    architecture
  • architecture serves as a platform to direct
    specific application development projects
  • Resource Allocation
  • Allocating IT application development resources
    and operational resources
  • Project Planning
  • Managing resources assigned to specific IS
    development projects

44
MODEL 2Nolans Stages of IS Growth
  • A conceptual model of stages through which
    organizations IT Planning processes evolve
  • Initiation
  • Expansion
  • Control
  • Integration
  • Data administration
  • Maturity

45
Nolans Stages of IS Growth Value of Nolans Model
  • A set of typical evolution patterns of the ISD
    within the organization
  • Six ideal stages of ISD experiences
  • If your organization fits into a stage, it helps
    identify strategic issues/challenges
  • Useful for understanding adoption/dispersion of
    technology
  • Drawbacks
  • 1979 view of ISD most modern big companies
    probably at stage 6 or beyond

46
MODEL 3Ends / Means Analysis
  • Work backwards from ends to means
  • Ends specification
  • Product of ISD goods, services, info
  • Means specification
  • Processes and inputs of ISD
  • Ends/Means Analysis attempts to ensure both
    effectiveness and efficiency
  • If we identify the correct Ends, we should be
    able to map backwards to the appropriate Means
    leading to effective systems (doing the right
    things)

47
MODEL 4Critical Success Factors
  • Interview managers
  • What objectives are central to your organization?
  • What are the critical factors that are essential
    to meeting these objectives?
  • What decisions or actions are key to these
    critical factors?
  • What variables underlie these decisions, and how
    are they measured?
  • What information systems can supply these
    measures?
  • Subsequently revise and refine the CSFs
  • Base IT planning around CSFs identified

48
MODEL 4Scenario Planning
  • A form of What-If? Analysis
  • Create a list of several envisioned future
    scenarios
  • Create a list of possible future events that may
    influence the outcomes of each scenario
  • Planners can then think about the likelihood of
    each of these events
  • The likelihood of events should determine which
    scenario is likely to happen/the best decision

49
Information Requirements AnalysisMatching
Potential Resource Capabilities to Requirements
50
Information Requirements Analysis
  • Objective
  • to ensure that the various information systems,
    databases, and networks can be integrated to
    support decision making and operations.

Requirements
Resources Available to Potentially
Fill Requirements
51
Conducting a Requirements Analysis
  • Aligning/Linking Requirements to Systems
    Subsystems
  • Define underlying organizational systems
  • Develop subsystem matrix
  • Define and evaluate information requirements for
    organizational subsystems
  • Define major information categories and map
    interviews into them
  • Develop information/subsystem matrix

52
Using the Requirements Analysis for Planning
  • Identify high payoff categories
  • Managers perceived importance of categories
  • 80/20 rule a few information categories (20)
    may solve most of managers problems (80)
  • Provide an architecture
  • Centralized system
  • economies of scale, per transaction cost
    minimized, easier control
  • Distributed system
  • users have direct control over their computing,
    effective, system flexibility, system redundancy
  • Blended system (Centralized Distributed)

53
Resource Allocation
  • Resource allocation
  • must execute the master development plan as
    defined in the requirements analysis
  • consists of developing hardware, software, data
    communications, facilities, personnel, and
    financial plans needed to execute

54
Summary
  • Various environmental/business pressures have
    driven Business Process Reengineering
  • A structured approach for BPR is through IT
    Planning
  • IT Planning has evolved from operational, to
    managerial, to strategic IT Plans
  • Many conceptual models of the planning process
  • some good
  • some dated and more interesting as historical
    visions of IT planning
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