1. MIS 101 PSCJ
4/21/2017
Lecture 6 Title: Business Process Automation, Improving, and Re-engineering
MIS 325
PSCJ
Mr Hashem Alaidaros

2. Introduction
The goal of business process modeling is to identify what is currently happening and what to do differently to satisfy customer requirements
Modeling a business process helps determine whether the business process needs to be improved, automated or reengineered
There are three approaches. Each approach varies in the level of “intensity” with which change is desired:
Business Process Automation (BPA)
Business Process Improvement (BPI)
Business Process Reengineering (BPR)

3. Business Process Automation (BPA)
leaves the manual system essentially unchanged but makes processes more efficient by automating them.
BPA does not impact the way things are done, but rather how fast they are accomplished.
Example: Library
Before BPA: Manual Checkout
After BPA: computerized checkout
customer still checks books out at desk, the computer makes this process more efficient.

4. Business Process Improvement (BPI)
This approach takes an evolutionary view of the system.
No radical changes but constant search for improvements.
Changes are made to the way things are done, not just the computer system but the business system as well.
Example: Library
Before BPI: manual checkout
After BPI:
students can use computer to search catalog, check out book and have it delivered using campus mail.
changes both the computer system and the way you do business.

6. Business Process Improvement using Six Sigma
Six Sigma is defined as “an improvement program aimed at reducing variability and achieving near elimination of defects from every product, process, and transaction”
Six Sigma aims to reduce costs and increase revenue through increased process efficiency and effectiveness.
This methodology focuses on variance reduction, cycle time reduction and yield improvement. Six Sigma is divided into 5 steps: define, measure, analyze, improve, and control (DMAIC).

7. Business Process Reengineering
a radical and fundamental rethinking of the business processes currently used
looking for dramatic improvements
high risk
increased time
very often associated with “downsizing”
BPR is concerned with radical change, so we need radical techniques to use BPR.
Resistance to change is highest here, because the stakes are highest.

8. Business Process Reengineering
The search for, and implementation of, radical change in business processes to achieve breakthrough results
Synonyms: business process redesign, business transformation, process innovation, business reinvention, change integration
Starting point: clean sheet of paper
Example: Library
Before BPR: manual checkout after searching the stacks
After BPR:
Make books available on web

9. Business Process Reengineering
BPR Objectives:
To dramatically reduce cost
Reduce time
To dramatically improve customer services or to improve employee quality of life
To reinvent the basic rules of the business e.g.
the airline industry
fast food to feeding people anywhere, anyhow.

10. When Should a Business Process be Reengineered? (I)
Three forces are driving companies towards redesign (The three C’s)
Customers
are becoming increasingly more demanding
Competition
has intensified and is harder to predict
Change
in technology
constant pressure to improve; design new products faster
flexibility and ability to change fast are requirements for survival

11. Business Process Re-engineering case studies

12. Reasons for BPR Failures
Lack of support from senior management
Poor understanding of the organization and the infrastructure
Inability to deliver necessary technology
Lack of guidance, motivation and focus
Fixing a process instead of changing it
Neglecting people’s values and beliefs
Willingness to settle for marginal results
Quitting too early
Allowing existing corporate cultures and mgmt attitudes to prevent redesign
Not assigning enough resources
Working on too many projects at the same time
Trying to change processes without making anyone unhappy
Pulling back when people resist change

13. Business Processes
Collection of activities that takes one or more kinds of input and creates an output that is of value to customer
Customer can be traditional external customer or internal customer
Thinking in terms of business processes helps managers to look at their organization from the customer’s perspective
Businesses must always consider customer’s viewpoint in any transaction
Sharing data effectively and efficiently between and within functional areas leads to more efficient business processes
Managing inputs and business processes effectively requires accurate and up-to-date information

14. Marketing and Sales Needs information from all other functional areas
Customers communicate orders to M/S in person or by telephone, , fax, the Web, etc.
M/S has a role in determining product prices
Pricing might be determined based on a product’s unit cost, plus some percentage markup
Requires information from Accounting and Finance, and Supply Chain Management data
M/S needs to interact with Human Resources to exchange information on hiring needs, legal requirements, etc.

15. Supply Chain Management
Needs information from various functional areas
Production plans based on information about product sales (actual and projected) that comes from Marketing and Sales
With accurate data about required production levels:
Raw material and packaging can be ordered as needed
Inventory levels can be kept low, saving money
Supply Chain Management data and records can:
Provide data needed by Accounting and Finance to determine how much of each resource was used
Support the M/S function by providing information about what has been produced and shipped

16. Accounting and Finance
A/F personnel:
Record company’s transactions in the books of account
Record accounts payable when raw materials are purchased and cash outflows when they pay for materials
Summarize transaction data to prepare reports about company’s financial position and profitability
People in other functional areas provide data to A/F
M/S provides sales data
SCM provides production and inventory data
HR provides payroll and benefit expense data

17. Human Resources HR needs information from the other departments
Tasks related to employee hiring, benefits, training, and government compliance are all responsibilities of HR
HR needs accurate forecasts of personnel needs from all functional units
HR needs to know what skills are needed to perform a particular job and how much the company can afford to pay employees
HR observes governmental regulations in recruiting, training, compensating, promoting, and terminating employees

18. ERP software
Significant amount of data is maintained by and shared among the functional areas
Timeliness and accuracy of these data critical to each area’s success and to company’s ability to make a profit and generate future growth
Managers think in terms of business processes that integrate the functional areas
Need to share information between functions and functional areas
ERP software provides this capability by means of a single common database
Allows accurate, real-time information to be available
Examples of ERP software are SAP and Oracle