BMIBT CM322 INTERNET TECHNOLOGY, BUSINESS PROCESS MODELLING and PROCESS RE- ENGINEERING Adapted for self study from a presentation by Dr. Geoff Cutts (CMS)

This self study material concentrates on the potential of technology in modern organisations and provides and insight into Process Modelling, Business Process Re-Design and potential roles for Intranet Technology. It supplements the lectures last week and this week on the ‘Business Modelling’ and should be useful for the Individual Assessment you will do later in the unit.

In the constantly growing and changing world, companies must keep pace with new technologies to provide a competitive solution for their customers. Merely changing along with the growth of technology, however, is not enough. Truly successful organisations are those who continue to adapt, to their new environment, calling on new technology and integrating it in new ways to better serve their customers. Such is the case with information technology. By keeping large quantities of information in a central location, and making it available to many points throughout the enterprise, many companies are able to reduce costs. But at the same time, even though the cost of the hardware is significantly less, the cost of the software and services required to implement even a small application remains high; this is changing with the growth of Internet Technology. Innovative use of enabling technologies gives high-impact, technology-enabling solutions in ever shorter timescales. Background

Key Point - Every business is unique n Traditional development approaches and uses of technology have often failed to recognise this. While typically 80% of an organisation's business processes are common, for example Purchase Order Administration, the remaining 20% are unique and drive the organisation's competitive advantage. n In the past – a concentration on supporting/improving standard business activities. n Tendency to replicate or reinforce how things are done now.

Business Process Redesign In business process redesign each business process is analysed, documented and redesigned to include only those tasks that add value to the organisation. Tasks are linked into end to end processes that often lead to a need to redesign the organisation's structure.

Typical Business Process Take Order Check credit Check stock Pick pack Deliv er BillPrice Finance MM PP WarehouseSales

Business Process Redesign Business process redesign involves the design of new end to end business processes, supported by people, systems and IT (increasing importance of Internet Technology). The objectives of business process redesign include :- *streamlined, flexible, responsive processes *the elimination of unproductive activity *improved collaboration *improved resource utilisation *strengthened synergy, and improved decision making.

The Functional View – focus on departments Customer Dept A Dept EDept D Dept B Dept C

The Process View – focus on how things could be done)

Business Process Reengineering and Technology Integration With reengineering, a company can eliminate many of the antiquated methods of doing business which were developed with antiquated technology. They can apply the latest technologies and perform much more efficiently and effectively. Typically, the primary technology needed to be incorporated into business is the computerisation of information many ways to do this). A reengineered company can be accomplished by the simple application new software products, deployment of network technology or the strategic use of internet technology (see precious papers on smart/virtual organisations).

Business Process Reengineering and Technology Integration Business Process Reengineering and Technology Integration is a technique of business enhancement that essentially recreates the means of doing business using the latest technology available. Internet Technology a Key Enabler in this In essence, reengineering is the process of questioning why a process is done, how a process is done, and can the process be eliminated or combined with another process. Reengineering is a critical means of enhancing the effectiveness of a business. With the increased competitiveness in industry today, many businesses are finding that they either have to reengineer or go out of business.

Evolution of Business Improvement Individual / Departmental efficiencies (TQM) Cross-functional Process Design (BPR) People, roles, culture, structure, beliefs, rules, measures (Bus. Reeng) Roles Jobs Intra-departmental processes End-to-end Processes “The Whole Business”

PROCESS SIMPLIFICATION n Eliminate non value adding steps n Exploit any inherent parallelism of the system n Perform any validation once and at the earliest opportunity n Provide the shortest possible route from customer requirements to customer satisfaction

PROCESS SIMPLIFICATION n Information is gathered only once and at the earliest opportunity n It should be possible to track the progress of the transaction at any time n It should be possible to force through a transaction subject to controls n Eliminate bottlenecks, black holes, buck passing.

Potential Areas for Improvement n Finance / Accounting n Sales and Distribution n Budgeting and Planning n Human Resource / personnel n Fixed assets n Materials management and Inventory Control n Master scheduling n Works order management n Logistics and Warehouse management n Purchasing / Sourcing

Levels of Internet Exploitation Lower Level Localised exploitation is the use of standard IT applications within departments or sections without any commensurate change in the business processes. Internal integration is the integration of IT and business to achieve maximum efficiency within the current organisation. These first two levels really only represent the rectification of current weaknesses.

Levels of Internet Exploitation n Higher Levels n To exploit the capabilities of IT organisations need to redesign their business processes, redesign their business networks and to redefine their business scope. n Potential to change the way they work and the organisations structure.

Business Network Redesign Reaching out to suppliers, clients, contractors and in the case of multi-nationals reaching out to group companies is the goal of network redesign. The use of IT to create the virtual organisation is a challenge being taken up. Networking technology allows the right data to be at the right place at the right time. World-wide networks with adequate bandwidth which support concurrent databases, client server computing, multi-media applications, electronic mail and much more are available and demonstrable.

Improvement can be continuous/radical – sort/long term Improvement Time Continuous Radical Continuous, predictable Incremental Tactically Managed Focused on procedures Local Sponsored Discontinuous, unpredictable Quantum Strategically Managed Balanced formal and informal Process owner sponsorship

Summary: Enterprise Wide Information Systems Reaching out to customers and suppliers Value Chains Today’s Degree Reality of Business Transformation End to End Processes Internal Integration Rectification of current Localised Exploitation Weaknesses Range of Potential Benefits ERP e-commerce All Possibilities for Internet Technology