Department Vendor Information Vendor Information Issue Purchase Order Make Payment Request Open P.O. File Receipt of Goods File Available Vendors P.O. Bill of Lading Signed BoL Invoice R. of G. Check Receive Goods Notification of receipt P.O. R. of G. Budget/Acct Budget Availability Bud Commit Expenditure A High Level Data Flow Diagram of the Purchasing Process

Business Process Automation Understanding the as-is system Identifying improvement opportunities Problem Analysis Root Cause analysis Developing the To-be system concept

Business process Improvement Understanding the as-is system Identifying Improvement Opportunities Duration Analysis Activity Based Costing Informal Benchmarking Formal Benchmarking Developing the to-be system concept

Business Process Reengineering Understanding the as-is System (NOT DONE!) Identifying Improvement Opportunities Outcome analysis Breaking Assumptions Technology Analysis Activity Elimination Proxy Benchmarking Process Simplification Developing the To-Be System Concept

Five primary concepts that make up reengineering (Davenport) A “clean sheet of paper” approach to org design and change; with top down thinking. An orientation to broad, cross-functional business processes, or how work is done. The need for, or possibility of radical change in process improvement Information technology as an enabler of change in process performance Changes in organizational and human arrangements that accompany change in technology.

CSC Index’s findings, The State of Reengineering (1995): 50% of companies responding said most difficult aspect of reengineering efforts is dealing with Fear and Anxiety in their organization

CSC Index’s findings, The State of Reengineering (1995): 50% of companies responding said most difficult aspect of reengineering efforts is dealing with Fear and Anxiety in their organization 73% said they were using reengineering to eliminate on average 21% of workforce

CSC Index’s findings, The State of Reengineering (1995): 50% of companies responding said most difficult aspect of reengineering efforts is dealing with Fear and Anxiety in their organization 73% said they were using reengineering to eliminate on average 21% of workforce Of 99 completed reengineering efforts, 67% were judged as producing mediocre, marginal or failed results.

Davenports Lessons: Implementation is harder than Design. Big Risks of Failure Clean sheet of paper is expensive. Top down hits rocks when it changes the way people do their work. The big lesson is still that we must focus on improving our business processes Information Technology is only useful if it helps people do their work better (and perhaps differently)

Process Improvement vs. Process Innovation (Davenport, 93)

Stoddard and Jarvenpaa’s comments on BPR: Distinguish between Design and Implementation. Design must be radical (to be reengineering) Radical Implementation is tough unless: self contained units an acknowledged crisis, battle for survival deep pockets [excellent project management skills ability to borrow from outside willingness to use revolutionary path] Incremental Implementation translate it into a series of operation crises make it pay its way fit into an organization culture of continuous improvement