Information, Organizations, Processes and Control

1. Information, Organizations, Processes and Control • Hierarchical organizations of past years • Today • Process-oriented, Learning, Team-based, and Fast-cycle organizational models • Flat, flexible, focused on core competence • Inside, empowered, interfunctional teams of knowledge workers are reengineering and continually improving core business processes. • Think globally and act locally

2. Flattening the Organizational Structure

3. Information, Organizations, Processes and Control • To accomplish the organizations of the year 2000 and beyond firms must change the way they are organized, and employees at all levels must become information literate - not just computer literate.

4. Creating the Information Age Organization • Transforming an Organization Requires more than just Changing the Structure. • True change occurs deep within the organization as individuals and work teams redefine the way they work and the values that guide decision making and action. • Managers need to rethink the nature of control and authority • Smashing together the features of the hierarchy with features of an entrepreneurial firm will not work. • Work must change and people must change • New knowledge and skills are needed

5. Streamlining the Business Cycle • Operating Cycle • The activities through which an organization designs, produces, markets, delivers, and supports its product and services • Management Cycle • The activities through which an organization manages the design, produces, markets, delivers, and supports its product and services Operational Process Management Process

6. Lecture note • No single IT application - however sophisticated and state of the art it may be - could deliver a sustained competitive advantage. Rather, advantage is obtained through the capability of an organization to exploit IT functionality on a continues basis. • This required a fundamental change in managerial thinking about the role of IT in organizational transformation, as well as an understanding of the critical components of IT strategy and its role in supporting and shaping business strategy decision

7. BPR • Business Process Redesign • The fundamental rethinking and radically redesign of business processes to achieve dramaticimprovement in critical, contemporary measures of performance such as cost, quality, service and speed. • The implementation of deliberate and fundamental change in business processes to achieve breakthrough improvements in performance. • Enabled by IT

8. BPR • Business Process Redesign • Also known as Reengineering or Process Innovation is offered as an enabler of organizational transformation. • Organization embrace a BPR approach when they believe that a radical improvement can be achieved by marring business process, organization structure, and IT change. • Examples: • Taco have embraced BPR to enable the redefinition of their business

9. BPR • Hammer and Champy • It is an all-or-nothing proposition that produces dramatically impressive results. Most companies have no choice but to muster the courage to do it. For many, reengineering is the only hope for breaking away from the ineffective, antiquated ways of conducting business that will otherwise destroy them.

10. BPR • 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 • taco bell from Mexican food to fast food to feeding people anywhere, anyhow. • Customer satisfaction • Organizational learning

11. BPR • Change: • To transform an organization, a deep change must occur in the key behavior levels of the organization: • jobs, skills, structure, shared values, measurement systems and information technology. • Role of IT • BPR is commonly facilitated by IT e.g. • Organizational efficiency • Effectiveness • Transformation

12. BPR • Efficiency • Applications in the efficiency category allow users to work faster and often at measurable lower cost • Mere automation of manual tasks, resulting in efficiency gains (least deep) • Effectiveness • Applications in the effectiveness category allow users to work better and often to produce higher quality work. • Requires changes not only in technology, but in skills, job roles, and work flow (deeper).

13. BPR • Transformation • Applications in the the transformation category change the basic ways that people and departments work and may even change the very nature of the business enterprise itself. • A major change in the organization, including structure, culture, and compensation schemes (deepest).

14. BPR • Process • A process is set of logically related tasks performed to achieve a defined business outcome • A collection of activities that, taken together, create value for customer e.g. new product for customer. This tasks are inter-related tasks

15. BPR • How can Companies Identify their Business Processes. Examples • Manufacturing: As the procurement-to-shipment process • Product development as the concept-to-prototype process • Sales as the prospect-to-order process • Order fulfillment as the the order-to-payment process • Service as the inquiry-to-resolution process Business Processes Business functions

16. BPR • How can Companies Identify their Business Processes. • Dysfunction: Which process are in the deepest trouble • Important: Which process have the greatest impact on customer • Flexibility: which process are the most susceptible to redesign.

17. BPR • Embarking on Re-engineering • Persuade people to embrace or at least not to fight -the prospect of major change by developing the clearest message on: 1: A “case for action”- Here is where we are as a company and this is why we can’t stay here • show your balance sheet • show competitors balance sheet 2: A “vision statement” - This is what we as a company need to become

18. BPR • Simple Rules • Start with a clean sheet of paper. • With my current experience what can I do today • If I were to re-create this company today, given what I know and current technology, what would it look like. • How will I be focusing, organizing and managing the company? • Transition from a vertical functional departments to one that is horizontal, CUSTOMER focused and process-oriented?

19. BPR • Simple Rules • Listen to customer • Enhance those things that bring value to the customer or eliminate those that don’t • Be ambitious, focus your commitment to radical change on the process

20. BPR Improvement Innovation/Reengineering • Process Improvement and redesign Process Magnitude Increment Radical Improvement 30-50% 10x-100x Sought Starting base Existing Process Blank sheet Top management Relatively low High commitment Role of IT Low High Risk Low High