IS 788 [Process] Change Management

1. IS 788[Process] Change Management • Wednesday, September 2 • Reminder: Pac Bell has been moved to Wednesday, 9/9 • Lecture: Strategy and process architecture (1 of 2) IS 788 3.1

2. Alignment • Alignment with organizational goals and strategies is a top priority for process and IT development • Exceptionally difficult to achieve • Turf wars (local optimization, global sub-optimization) • IT (and process architects) at too low an organizational level • Lack of clearly stated goals and strategies! (UNR as example) IS 788 3.1

3. Alignment begins with a clearly defined strategy • Strategy: how a company will compete, what its goals are and what policies will support those goals • Formal strategies (SWOT analyses) vs. informal strategies (a calibrated gut) • Porter’s strategy analysis: IS 788 3.1

4. Three phase process • Determine the current position of the company • Determine what is happening in the environment • Strategize to get from where you are to where you want to be given the current and anticipated environment • Some analysts believe formal strategies are too confining for the fast pace of the 2nd millennium IS 788 3.1

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6. Environmental analysis (Porter) IS 788 3.1

7. Seeking “sustainable strategic advantage” • Barriers to entry: • Large capital investment • Established branding in a market segment • Proprietary product/process • Process, people and technology smoothly and tightly integrated (v. difficult to imitate!) • This is similar to what Porter calls ‘fit’ IS 788 3.1

8. Value Propositions • Abstractions (generalized views) of what your organization does and sells • Examples: • Bookstore  entertainment and or information provider • Taco Bell  warming and serving food (NOT a restaurant, NOT food preparation) • (hair) Salons  ‘experience providers’ ala ‘the experience economy’ IS 788 3.1

9. Value Propositions – help you understand the need you are satisfying – and focus efforts • Competitive strategies: • Cost leadership – dangerous – can lead to ‘hypercompetition’ and commoditization; Dell, for example, eventually squeezed the profit out of desktops even for itself! • Harmon, p.44 discusses Porters negative view of excessive stress on operational effectiveness • Differentiation • Niche markets (extreme differentiation) IS 788 3.1

10. Automotive product positioning IS 788 3.1

11. From strategy back to process • Focusing on value chains and value propositions helps to distinguish between value adding activities and non-value adding activities • Work processes can then be refined so that most organizational effort is directed to core process: what the organization does best and uniquely to provide value to customers • Non core processes can be selectively outsourced IS 788 3.1

12. Competitive advantage • When your company can make more profit in a market than competitors • This requires good strategic position arrived at via strategic analysis which is backed by difficult to replicate ‘fit’ • Fit (again): when process activities are tightly integrated with each other and underlying technology • Good fit overall is superior to any single exceptionally efficient process IS 788 3.1

13. So, how does alignment happen? • IF it happens, it is because it is given high visibility and resources within the organization • Frequently, successful organizations have formal business process architectures (how processes fit together to achieve organizational goals) overseen by formal committees of high level executives IS 788 3.1

14. The alignment cycle IS 788 3.1

15. Mapping Strategies to Goals • It should be possible to map strategies to organizational goals • When this mapping is graphically rendered it becomes a powerful tool for communicating with all levels of the organization and identifying new processes or process change/improvement/ candidates IS 788 3.1

16. Strategic Activity Map IS 788 3.1

17. Maximize effectiveness • Almost any process can be made more efficient, but most are not strategic • Most businesses evolve too rapidly to permit formal analysis and documentation of all processes • Determine the processes linked most closely to strategic goals – these are prime targets for redesign IS 788 3.1

18. Multiple core value processes for a bank Management IS 788 3.1

19. Each process redesign requires a team from multiple functional areas • To optimize organizational objectives a high-level steering committee is invaluable • Recall “Failed ERP” – decentralized structure with no high level guidance • Managing multi-department teams is a challenge in itself – discuss matrix organizations – Lecture2.2, ppt #10 IS 788 3.1

20. Industry Standard Process Architecures • The text overviews the Telecommunications Business Process Framework (eTOM) in Ch. 4 • For 788 this is notable primarily as a market (telecom) initiative which may lead to standardized (commoditized) processes – anticipating the Davenport HBR paper IS 788 3.1

21. The process hierarchy • To some degree the definition of process, subprocess and activity is arbitrary. • A Value Chain is typically the largest process class in an organization, ranging by definition across multiple functional areas • A process is a logically distinguishable sub-portion of a value chain. Some authors call these ‘tasks’ • An ‘activity’ is wherever you choose to stop modeling lower levels ;-) IS 788 3.1

22. The process hierarchy IS 788 3.1

23. Deciding what type of change effort is called for • Process change types: • Design – new product or service • Redesign – a major effort for significant improvement • Automation – a largely manual process is redesigned for IT assistance • Improvement – incremental refinement of process for small percentage improvement • A change in the management of a process rather than the process • Outsourcing – following a non-core determination IS 788 3.1

24. A process / strategy matrix (p. 83old) IS 788 3.1

25. Putting it all together • Determine strategy • Goals to implement the strategy • Process changes to achieve goals • Prioritize and begin modeling and re-engineering • With detailed sub-steps added it looks like this: IS 788 3.1

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27. Additional Alignment Tools • Balanced Scorecard (BS) – for overall organizational measurement • Steers (accounting oriented) managers away from strict financial measurement • Financial measures + • Customer measures + • Process measures (internal business) + • KM measures (innovation and org. learning) • Harmon points out that there is NO sense of a value chain and thus BS best supports a functional organization rather than a process org. IS 788 3.1

28. Balanced Scorecard IS 788 3.1

29. Organizational Positioning • Basically YASDM – yet another strategy determination method • But, a nice ‘lens’ for viewing the organization that yields some good insights • You can map either your processes or your goals to this concept IS 788 3.1

30. Organizational Positioning • Based on the notion of • three distinct customer types: • Operational (cost) focus • Service focus • High performance products • Position your company to • best serve your dominant • customer type. cf. Moore’s diffusion of innovation theory: innovators, early adopters, middle majority, laggards. IS 788 3.1