1 Establishing Organizational Information Requirements Enterprise Analysis (Business Systems Planning) Analysis of organization-wide information requirements : Analysis of organization-wide information requirements : organisational units, functions, processes and data elements organisational units, functions, processes and data elements Identifies key entities and attributes of the organisation’s data Identifies key entities and attributes of the organisation’s data Take a large sample of managers: Take a large sample of managers:  How they use info  Where they get info  What their envs are like  What their objectives are  how they make decisions  What their data needs are Weaknesses: Weaknesses: Produces huge amount of data which is expensive to collect & diff to analyseProduces huge amount of data which is expensive to collect & diff to analyse Most info gathered from senior & middle managersMost info gathered from senior & middle managers Tendency to automate whatever exists in place – what existing info are usedTendency to automate whatever exists in place – what existing info are used Enterprise analysis doesn't focus on the need for new processes or new methods of conducting business.Enterprise analysis doesn't focus on the need for new processes or new methods of conducting business.

2 Process/Data Class Matrix

3 Strategic Analysis or Critical Success Factors Critical Success Factors (CSFs) are simply the goals managers feel will make the organization a success Critical Success Factors (CSFs) are simply the goals managers feel will make the organization a success Organisations info requirements are determined by a small numbers of CSFs of managers Organisations info requirements are determined by a small numbers of CSFs of managers Small number of easily identifiable operational goals Small number of easily identifiable operational goals Shaped by industry, firm, manager, and broader environment Shaped by industry, firm, manager, and broader environment Small number of objectives that managers can easily identify and on which IS can focus Small number of objectives that managers can easily identify and on which IS can focus Used to determine information requirements of organization Used to determine information requirements of organization Principle method used – personal interviews with a number of top mgrs to identify goals & resulting CSFs Principle method used – personal interviews with a number of top mgrs to identify goals & resulting CSFs Establishing Organizational Information Requirements

4 Using CSFs to Develop Systems

5 Strategic Analysis or Critical Success Factors Only a small group is interviewed. Their biases then become the biases of the system. How do you formulate the opinions of these few managers into an organization-wide plan? How aware of common tasks at the lower levels of the organization are the top managers? Are you sure the goals of the managers are representative of the goals of the organization? Just because this level of management may be more aware of the external environment doesn't make the plan immune to change. That has never been truer than in today's rapidly changing world. CSFs can be a good start to analyzing a company's organizational needs, but they shouldn't be the end or the only methodology used. Establishing Organizational Information Requirements

6 How can Information Technology transform organisations Global networks – International division of labourGlobal networks – International division of labour Enterprise networks – Collaborative work and teamworkEnterprise networks – Collaborative work and teamwork Distributed computing – EmpowermentDistributed computing – Empowerment Portable computing –Virtual orgsPortable computing –Virtual orgs Multimedia, Graphical interfaces - AccessibilityMultimedia, Graphical interfaces - Accessibility

7 One of the most important competitive strategies today is business process re- engineering(BPR). BPR is more than automating business processes to make modest improvement in the efficiency of business operations. Reorganizes work flows, combining steps to eliminate redundant paper-intensive tasksReorganizes work flows, combining steps to eliminate redundant paper-intensive tasks Large payoff from IT investment if processes are redesigned before applying technologyLarge payoff from IT investment if processes are redesigned before applying technology “ Reengineering is the fundamental rethinking & radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures performance, such as cost, Quality, Service, & Speed. “ Michael Hammer James Champy “ Reengineering is the rapid and radical redesign of strategic, value-added business processes and systems, policies & organization structures that support them to optimize the work flows & productivity in an organization. “ The Reengineering Handbook (AMACOM 1994) Business Process Reengineering

8 BPR is not: Automation Downsizing Outsourcing Business Process Reengineering

9 BPR Versus Process Simplification Process Reengineering Radical Transformation Vision-Led Change Attitudes & Behaviors Director-Led Limited Number of Initiatives Process Simplification Incremental Change Process-Led Assume Attitudes & Behaviors Management-Led Various Simultaneous Projects

10 BPR Versus Continuous Improvement Process Reengineering Radical Transformation People & Technology Focus High Investment Rebuild Champion Driven Continuous Improvement Incremental Change People Focus Low Investment Improve Existing Work Unit Driven

11 Why Reengineer? Customers –Demanding –Sophistication –Changing Needs Competition –Local –Global Change –Technology –Customer Preferences

12 Why Organizations Don’t Reengineer? Complacency Political Resistance New Developments Fear of Unknown and Failure

13 BPR seeks improvements of : –Cost –Quality –Service –Speed Business Process Reengineering

14 Business Process Reengineering Redesigning Mortgage Processing in US

15 Business Process Reengineering Redesigning Mortgage Processing in US

16 Management thought that by streamlining processes and installing new computer systems, it could reduce the head count by some 20percent, to 400 people. But after visiting Mazda’s payable department (Ford is part owner of Mazda ), Ford managers increased their goal: perform accounts payable with only 100 clerks. Analysis of Ford's existing system revealed that when the purchasing department wrote a purchase order, it sent a copy to accounts payable. Later, when material control received the goods, it sent a copy of the receiving document to ac- counts payable. Meanwhile, the vendor also sent an in- voice to accounts payable. If the purchase order, receiving document, and invoice matched, then accounts payable issued a payment. Unfortunately, the department spent most of its time on the many mismatches. To prevent them, Ford instituted "invoiceless processing." Now, when the purchasing department initiates an order, it enters the information into an online database. It does not send a copy of the purchase order to anyone. The vendor receives notification through an EDI. When the goods arrive at the receiving dock, the receiving clerk checks the database to see whether the goods correspond to an outstanding purchase order. If so, he or she accepts them and enters the transaction into the computer system. (If there is no database entry for the received goods, or if there is a mismatch, the clerk returns the goods.) Under the old procedures, the accounting department had to match 14 data items among the receipt record, the purchase order, and the invoice before it could issue payment to the vendor. The new approach requires matching only four items-part number, amount, unit of measure, and supplier code-between the purchase order and the receipt record. The matching is done automatically, and, the computer prepares the check, which accounts payable sends to the vendor (or an electronic transfer is made). There are no invoices to worry about since Ford has asked its vendors not to send them. The re-engineered system as compared to the old one is shown in the figure below. Ford did not settle for the modest increases it first envisioned. Instead it opted for a radical change, and it, achieved dramatic improvement: a 75 percent reduction, in head count, not the 20 percent it would have achieved with a conventional improvement program. And since there are no discrepancies between the financial record and physical record, material control is simpler, receipts are more likely to be correct, and financial information is more accurate. For Further Exploration: How did the EDI help attain the reduction? What other support was provided by IT? Source: Condensed from Hammer and Champy, Reengineering the Corporation (New York: Harper Business, 1993 ). Reengineering Processes at FORD MOTOR Company (In Turban 3 rd ed. P.8)

17 Characteristics of a re-engineered process Often several jobs are combined into one. Workers make decisions. The steps in the process are performed in a natural order. Work is performed where it makes most sense. Checks and controls are reduced. The manager provides a single point of contact. The advantages of centralised and decentralised operations are combined. Business Process Reengineering

18 Principles of BPR Processes should be designed to achieve a desired outcome rather than focusing on existing tasks. Personnel who use the output from a process should perform the process. Information processing should be included in the work which produces the information. Geographically dispersed resources should be treated as if they are centralised. ‘Doers’ should be allowed to be self-managing. The traditional distinction between workers and managers can be abolished. Business Process Reengineering

19 IT and BPR Simply throwing IT at a problem does not cause it to be re- engineered. Merely computerising existing ways of doing things (such as processing invoices) is not necessarily the best solution. The speed, information processing capabilities, and connectivity of computer networks can substantially increase the efficiency of business processes,as well as communications and collaboration among the people responsible for their operation and Management Problems with BPR BPR has become allied in managers minds with narrow targets such as reductions in staff numbers and cost- cutting measures. BPR shows too little concern for human issues. Business Process Reengineering

20 IT and BPR

21 Senior management needs to develop broad strategic visionSenior management needs to develop broad strategic vision Management must understand and measure performance of existing processes as baselineManagement must understand and measure performance of existing processes as baseline Information technology should be allowed to influence process design from startInformation technology should be allowed to influence process design from start IT infrastructure should be able to support business process changesIT infrastructure should be able to support business process changes Steps in Effective Reengineering Business Process Reengineering

22 What does BPR involve? restructuring of organisational processes innovative use of Information Systems What is the aim of BPR? Given today’s economic constraints: to refit or revamp the organisation to meet its social obligation and future economic challenges What does BPR provide? enhanced efficiency enhanced effectiveness while optimising scarce resources Concepts of BPR clean slate approach to organisational design and change orientation to broad cross-functional administrative processes (how work is done) radical change in process performance computer-based information system as enabler of change in how work is done changes in organisational and human arrangements that accompany changes in technology

23 How information systems contribute to Total Quality Management Simplify product or production processSimplify product or production process Enable benchmarkingEnable benchmarking Use customer demands as guide to improve products and servicesUse customer demands as guide to improve products and services Reduce cycle timeReduce cycle time Improve the quality and precision of the designImprove the quality and precision of the design Increase the precision of productionIncrease the precision of production Process Total Quality Management (TQM) and Six Sigma Business Process Reengineering