Outline Identifying the right projects to implement (continued) Systems Analysis Approaches –automation, process improvement, process reengineering Example of BPR Insights on BPR versus Process Improvement

Where do ideas for systems development projects come from? Problems, and suggested solutions to problems that bubble up through the organization. Strategic analysis of the organization and its business situation. Serendipity -- bright ideas out of nowhere, or accidents that spark ideas about great opportunities.

Approaches to Information Systems Planning Problem Focus Let a Thousand Flowers Bloom Bottom Up with Payoff Hurdle Strategic Focus Information Systems Centric View of the Corporation Organizational Strategic + IS Capabilities Business Functional Decomposition Strategic Systems Perspectives

Strategic IS Planning: Figures 5-8, 5-11 Functional Decomposition: Figures 5-13, 5-14 (You do not have these slides. That’s okay!)

How Identify a Potential Strategic System? Four Frameworks for Thinking about IS and Competitive Advantage: Competitive Forces Model Value Chain Model Customer Resource Life Cycle Model IS Capability and Resource View of Firm

Competitive Advantage Vs. Sustained Competitive Advantage Valuable, Rare, Inimitable For How Long? An Information Systems Capability as opposed to a particular Information System

Outline Identifying the right projects to implement (continued) Systems Analysis Approaches –automation, process improvement, process reengineering Example of BPR Insights on BPR versus Process Improvement

Three Ways to Bring IT to Bear on the Business Process automation problem analysis vs. root cause analysis Process improvement duration analysis, activity based costing, benchmarking Business Process Reengineering outcome analysis; breaking assumptions, technology anal. Activity elimination; Proxy benchmarking, process simplification For each: As-Is models?; improvements; To-be models

Five primary concepts that make up reengineering (Davenport) A “clean sheet of paper” approach to org design and change 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.

Outline Identifying the right projects to implement (continued) Systems Analysis Approaches –automation, process improvement, process reengineering Example of BPR Insights on BPR versus Process Improvement

Department Vendor Department Receipt of Goods File R. of G. Receive Goods Notification of receipt Bill of Lading Signed Bill of Lading

Vendor Department Make Payment Open P.O. File Receipt of Goods File Invoice Check P.O. R. of G. Budget/Acct Information Expenditure

Department Vendor Department 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

Ford Motor Company Attempted to automate the purchasing/payment process. Cut 20% of costs Bought part in interest in Mazda, realized they did it for a fraction of that. Reengineered the process, saving 80%.

Outline Identifying the right projects to implement (continued) Systems Analysis Approaches –automation, process improvement, process reengineering Example of BPR Insights on BPR versus Process Improvement

Process Improvement vs. Process Innovation (Davenport, 93)

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)

Stoddard and Jarvenpaa’s comments: 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