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Information Technology and Changing Business Processes

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Process Perspective ... Clarify the value that each process adds to the overall goals of the organization ... find ways to improve the process using the metric ... – PowerPoint PPT presentation

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Title: Information Technology and Changing Business Processes


1
Information Technology and Changing Business
Processes
BUAD 661, Fall 2004, Chapter 5 Peggy M Beranek,
PhD
2
Functional (Silo) Perspective
  • The organization of the company is around the
    defined business functions
  • Each department determines its own core
    competencies and works with them
  • This perspective is widespread and is reinforced
    by business curricula

3
Functional Perspective - Benefits
  • The organization can optimize expertise
  • Can move experts across the functions
  • It is easier to make connections and evaluations
    with other organizations

4
Functional Perspective - Drawbacks
  • Efforts are often re-created across departments
  • There are often communication gaps
  • The structure and culture across departments can
    vary
  • Handoffs between departments are often a source
    of problems
  • It becomes more difficult to communicate the big
    picture

5
Process Perspective
  • The Process perspective keeps the big picture in
    mind, allows the manager to concentrate on the
    work that must be done

6
Process Perspective
  • An Inter-related, sequential set of activities
    and tasks that turns inputs into outputs and
    includes
  • A beginning and an end
  • Inputs and outputs
  • a set of tasks that transforms the inputs into
    outputs
  • A set of metrics for measuring effectiveness

7
Leading with the Process Perspective
  • Identify the customers of processes
  • Identify the customers requirements
  • Clarify the value that each process adds to the
    overall goals of the organization
  • Share your perspective with other organizational
    members until the entire organization becomes
    process focused

8
Transforming a Business
  • BPR Business Process Re-engineering
  • Radical process
  • Is a Core Competency for some companies
  • TQM Total Quality Management
  • Incremental, continuous process
  • Both processes are equally important
  • Both must view the business as a set of processes

9
TQM
  • Small incremental changes are used to improve a
    business, involves
  • Choosing a business process to improve
  • Choosing a metric for measurement
  • Enabling personnel to find ways to improve the
    process using the metric
  • Tends to be less threatening
  • You need to allow personnel the freedom to try
    new ideas to improve processes

10
BPR
  • Enables aggressive improvement goals
  • Makes rapid, breakthrough impacts possible
  • Faces greater resistance
  • Used when facing major changes in the operating
    environment
  • Used for discontinuities

11
BPR Key Aspects
  • The need for Radical change
  • Thinking from a cross-functional perspective
  • Challenging old assumptions
  • Networked, cross-functional organizations

12
BPR - Steps
  1. State a case for action, with an understanding of
    current conditions
  2. Assess the readiness of the organization to
    change
  3. Identify the business processes that will be
    affected
  4. Analyze those processes

13
BPR - Steps
  • Analyze those processes
  • Develop a Workflow diagram
  • Define the scope, mission, and boundaries of the
    process
  • Develop a high-level diagram
  • Identify metrics for evaluation
  • Develop a transition plan

14
Enterprise Systems - ERP
  • Computer systems that support the entire
    organization from a process perspective

15
ERP - Characteristics
  • Integration of information flows throughout the
    organization
  • Tend to be large commercial packages
  • Which reflect industry best practices
  • The systems need to be integrated with the
    organizations current systems
  • Are evolving to Web-based and OO systems

16
ERP - Advantages
  • All the modules communicate with the other
    modules, reduces replication and redundancy
  • Allows for the effective use of organizational
    Data Bases
  • Enforces use of standard procedures

17
ERP Drawbacks/Difficulties
  • Different data formats are used throughout the
    organization
  • Many business processes need to be re-designed
    Many organizations may need to make changes to
    their organizational structure
  • The systems are sold as suites of applications
    which increases their expense

18
ERP Adoption
  • Let the ERP drive the business process redesign
  • New organizations
  • When operational business processes are not a
    competitive advantage
  • When the current systems are in crisis

19
ERP Adoption
  • Redesign the process first then apply the ERP
  • When the operations are the basis of a strategic
    competitive advantage
  • When the features offered by the ERP do not meet
    the needs of the organization
  • When there is
  • lack of top management support
  • A desire for strategic flexibility
  • Highly decentralized decision making

20
Common Reasons for Failure
  • Lack of senior management support
  • Lack of a coherent communication program
  • Introducing unnecessary or too much complexity
  • Underestimating the amount of time, effort and
    resources needed
  • Combining (or substituting) re-engineering with
    downsizing
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