2. Business Process Reengineering & Innovation Chou-Hong Chen, Ph.D Professor of MIS School of Business Administration Gonzaga University Spokane, WA 99223 chen@gonzaga.edu

3. Innovation as a Response to Change in Market and Technology Innovation as a Response to Change in Market and Technology INNOVATION Socio-political Changes Technological Opportunities Advances in Technology New Products and Services Market Needs EFFICINCY EFFECTIVENESS INNOVATION Time Market

4. What is Business Process and Business Reengineering? n Business process: A set of logically related tasks performed to achieved a defined business outcome n Business reengineering means radically changing how people work - changing business policies and controls, systems and technology, organizational relationships and business practices, and reward programs. Dr. Chen, The Trends of the Information Systems Technology TM -3

5. Principles of Re-engineering (by Michael Hammer) n Organize around outcomes, not tasks n Have those who use the output of the process perform the process n Include information processing work into the real work that produces the information n Treat geographically dispersed resources as though they were centralized n Link parallel activities instead of integrating their results n Put the decision point where the work is performed.

6. BPR Radical Change = New organization +IT Types of Organizational = Strategies Industry Structure + Competitive Strategies + Cooperative Strategies

7. 1. Develop business vision, process objectives 2. Identify process to be redesigned 3. Understand, measure performance of existing processes 4. Identify opportunities for applying information technology 5. Build PROTOTYPE of new process BUSINESS REENGINEERING STEPS: Dr. Chen, The Trends of the Information Systems Technology TM -6

8. Figure 3-6 Reengineered Accounts Payable Process (from Hammer[1]) Before Purchasing Vendor Receiving Accounts Payable Goods Payment Invoice Receiving Document Copy of Purchase Order Purchase Order 

9. Figure 3-6 Reengineered Accounts Payable Process (from Hammer[1]) After Purchasing Vendor Receiving Accounts Payable Goods Purchase Order Payment Database  

10. Implementing Re-engineering n The key activities of re-engineering can be organized into three phases referred to as the 3R’s Re-engineering –Redesign –Retool –Reorchestrate

11. Tools for BPR n Simulation n Flow diagrams n Work analysis n Application development n Workflow software

12. Reorchestrate: Organizational Change n Leadership n Corporate values n Cultural change n Incentives n Accountability n Zeal/commitment n Communication n Comfortable with ambiguity n Obstacles to change n Celebrate success

13. The C’s related to Organization Re-engineering Projects The 3C’s of organization Re- engineering: The 4C’s of effective teams: - Customers - Competition - Change - Commitment - Cooperation - Communication - Contribution

14. CONSTRUCTION DESIGN ANALYSIS PLANNING Information Engineering

15. What is Information Engineering n The application of an interlocking set of formal techniques for the planning, analysis, design and construction of IS, applied ton an enterprise-wide basis or across a major sector of an enterprise. n An enterprise-wide set of automated disciplines for getting the right information to the right people with the right form at the right time.

16. Supports Business PlanStrategic Factors System Project  Decrease direct labor and overhead by 20%  Increase our customer order-filing rate to 95%  Produce timely tracking and sales information for inventory managers  Increase labor productivity  Improve service differentiation  Provide managers with better information  A standard cost accounting system that provides online labor rate and efficiency variances  An inventory management system that provides reorder points, EOQ’s, quantity on hand, and sales by item and salesperson. Figure: Relationship and linkage of proposed system projects with strategic factors and the business plan ObjectiveProposal

17. The Emergence of a Strategic Role for IT in Organizations IT as a strategic resource Technology Push  Cost- performance trends  Connectivity capabilities Competitive Pull  Innovative IT- enabled applications to obtain differential benefits in the marketplace to stay competitive

18. 1. Develop business vision, process objectives 2. Identify process to be redesigned 3. Understand, measure performance of existing processes 4. Identify opportunities for applying information technology 5. Build PROTOTYPE of new process BUSINESS REENGINEERING STEPS: Dr. Chen, The Trends of the Information Systems Technology TM -17

19. Figure 3-6 Reengineered Accounts Payable Process (from Hammer[1]) Before Purchasing Vendor Receiving Accounts Payable Goods Payment Invoice Receiving Document Copy of Purchase Order Purchase Order 

20. Figure 3-6 Reengineered Accounts Payable Process (from Hammer[1]) After Purchasing Vendor Receiving Accounts Payable Goods Purchase Order Payment Database  