Lecture 10: Redesign Principles and Tactics (1)

Source / Reference:

1.    “Business Process Reengineering – Concepts and Case Study” By Sunil Thawani

http://www.qualitywaves.com/Articles%20about%20Process%20Reengineering/BPR%20UOW.pdf

2.    “Customer Relationship Management (CRM)” By Dr A. Albadvi

http://sharif.edu/~albadvi/Crmses4.pdf

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Response:

In this lecture, Helen has introduced the three types of principles and tactics of redesign for us:

l   Restructuring the process

l   Informating the process

l   Minding the process

But we mainly focused on restructuring the process and informating the process on this lecture. There are four principles involved in restructuring the process and three principles in informarting the process.

Restructuring the process

#	Principles	Tactics
1	Lose Wait	Ø  Redesign time-sequential activities to be executed concurrently Ø  Create closed-loop teams for quicker flexible interaction Ø  Do NOT allow a support activity to gate a core value-adding process Ø  Design for continuous flow rather than stop-start batches Ø  Modify upstream practice to relieve downstream bottlenecks.
2	Orchestrate	Ø   Partner a process with another enterprise. Ø   Outsource a process to another enterprise Ø   Insource a process back into the enterprise. Ø   Route the process through an infomediary.
3	Mass-Customize	Ø   Flex access by expanding the time window for the process. Ø   Flex access by migrating the physical space in which the process happens. Ø   Create modular process platforms. Ø   Push customization to occur closest to the customer. Ø   Enable dynamic customization of product offerings.
4	Synchronize	Ø   Match the offerings on the physical and virtual parts of the process. Ø   Create common process platforms for physical and electronic processes. Ø   Track the movement of physical products electronically.

Informating the process

#	Principles	Tactics
1	Digitize and Propagate	Ø   Shift data entry to customers and digitize it. Ø   Make the process as paperless as possible as early as you can. Ø   Make information more easily accessible upstream and downstream to those who need it. Ø   Shrink the distance between the information and the decision.
2	Vitrify	Ø   Provide on-demand tracking information for customers of the process. Ø   Provide reporting capabilities that provide on-the-fly analysis. Ø   Design standard partner interface processes for seamless exchange of information
3	Sensitize	Ø   Build in customer feedback loops to detect process dysfunction. Ø   Enable software smarts to trigger quick business reflexes. Ø   Attach environmental probes to the process to monitor change.

Case Study

In real life, many companies have applied the above principles to their redesign process.

First case is about Ford Motor Company, which is an American multinational automaker based in Dearborn, Michigan, a suburb of Detroit. The automaker was founded by Henry Ford and incorporated on June 16, 1903

Ford has successfully implemented several principles in restructuring and informating the process. The detail will be shown below:

#	principle
0	Streamline	Process required time is less as the head count has been decreased substantially about 75%.
1	Lose Wait	The new process uses an Electronic Data Interchange (EDI) for transfer of purchasing orders, payment notices and other standard business documents .Therefore, the new centralized approach enables multiple parties work on the same information at the same time.
3	Mass-customize	Ford’s database is being operated in 24 hours. Employees can utilize the information if necessary.
4	Synchronize	It use of centralized database towards the physical and virtual process platform.
5	Digitize and propagate	New database and working system are requiring less human effort while preventing human errors and reducing process cycle time. Less paper work is required.
6	Vitrify	The authorized staffs of Ford can now track the information by accessing the database.

Second case is about Pizza Hut. It has adopted online order system for customer to order their food for delivery. When customers ordering food online, the organization can easily capture the preferences of customers on the food, it can help the organization have analysis on the population of their products in order to understand their customers more and think about the marketing strategy which has apply. The system can also reduce the waiting time for ordering the food because customers can know all the products and discount from the website rather than asking employees one by one. 

Lecture 9 Process Redesign (2)

Source/Reference

“Business process management with IBM Holosofx” By N. Whitlock

http://www.ibm.com/developerworks/ibm/library/i-holo/

“Workflow Performance Evaluation” By R. Aiello, March 2004

http://www.dia.unisa.it/professori/dottorato/TESI/tesi-aiello.pdf

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Response:

In this lecture, we still studied the process redesign and mainly focused on the second stage of BPR, which are modeling and analysis. Also, a useful tool for BPR modeling and analysis has been introduced which is Holosofx. It is a kind to diagram to show business processes in a firm.

In order the archive effective BPR modeling, the Holosofx Workbench should be followed and it is a set of five essential aspects. Each of them can be considered as a building block of a good BPR. A good BPR can be modeled when these all five blocks performed together.

An example of BPR workflow diagram

Building Block no.1: Structural elements of business process flow

It is structural elements of business process flow. In this part, different symbols in the diagram is defined, such as ACTIVITY objects are defined as a square or rounded rectangle, DECISION objects are defined as a diamond or a small octagon. We then used these symbols to form a diagram with a few wordings as explanation. Other secondary objects can also be added as a helping of the diagram, such as external entity is defined as an oval, a stop signal is defined as a traffice stop sign.

Building Block no.2: Organizational resource links to business process flow

It is the linking resources to Activities. In this part, we list out all activities object data, resource linking data and decision object data that we need in the diagram. The data mentioned above will be recorded in 3 separative tables, With these data tables, we can have a clearer understanding of what resources and activities we have in the business process, and thus reduce the errors occured in drawing diagram.

Building Block #3: Rules of graphical connection

It is the rules of graphical connection. It mentioned the requirement of linking all symbols, such as linking the nodes with time line arrows, provide input and outputs for a task, and connective all objects graphically.

Building Block #4: Methods of conditional concatenation of process parts

It is the activity path management. In this part, we consider the previous diagram drawn in last step, and try to reform and simplified the whole diagram. the decision and choice of the process can also be added to make the whole diagram closer to real-life decision.

Building Block #5: Process performance measurement

It is the process performance measurement. This part based on the result of last part, we will have the simulation analysis by counting the time,cost and resources of each decision in the diagram, and also the weighted average by assuming the probabilities for different case.

Case study

In the lecture, we have learnt to use what we learn to applied into real life situation: Zyco Auto Insurance. In this journal, I would like to talk about the case of University of Salernoto.

In this case, an example the author has mentioned is the granting of a Certification by the employee of the University of Salernoto. The main process represented by using IBM Holosofx Workblench. All of the required processes are shown in the below figure and the sub-processes are broken down for a comprehensive understanding of a business process. BPR team can look at the whole process in detail and see how the process can be improved. IT professional can also analysis the business processes partly by referring the Holosofx diagram and then transform to the required UML diagram. The below diagram:

The overall process with 4 stages (Request, Analysis, Control, Release):

One of the sub-processes: Analysis phase:

One of the sub-processes: Control stage:

Lecture 8 Process Redesign (1)

In this lecture 8, we have learnt the phase 3 of BPR methodologies, which is called Process Re-design. It involves five steps which are Scoping, Modeling, Analysis, Redesign and Integration.  In this journal, we only focus on Scoping.

Scoping includes 7 activities which are as follows:

• Operationalize process performance targets
• Define process boundaries
• Identify key process issues 
• Understand best practices & define initial visions
• Familiarize participants with BPR software
• Outline data collection plan & collect baseline data 
• Plan for modeling phase

• Operationalize process performance targets

There is a template for the operationalize process performance target, they are process redesign goals, process redesign targets and binding management decisions.

Writing the goals is relatively important in this template, because the process performance targets and their measures can be easily written when the goals are written correctly and precisely. Then, we need to prioritize them. For each goal, we identify the related process performance targets in concrete terms and its explicit tangible measures

Finally, we complete the template by filling in the part of binding management decisions. This part is optional since the process going to be redesigned might not have any constraints in the redesign project.

• Define process boundaries

This activity builds an initial common high-level representation of the process scope. It can also provide the BPR team with pointer for collecting data for the modeling phase. As reengineering an end-to-end process involves multiple functional areas and organizations, we may discover that a BPR project cannot be completed within a certain period of time. By clearly define the business boundaries, the above situation can be counteracted.

There is another template for this activity. The following elements should be included:

• Process trigger (types of inputs)
• Enterprise units (which touch the process)
• External partners (which touch the process)
• Customers of the process (segmentation)
• Process deliverables (types of output)

• Identify key process issues

In this activity, we need to do research on real world that we should get customers' input, such as current expectations, process problems, process credits, time and efforts expended by customers, future requirements and etc. It will be much better that applying strategies management analysis to this activity, such as SWOT or PEST analysis etc.

• Outline data collection plan and collect baseline data

The BPR team needs to consider about the source of data. Data collection involves many people and spends much time. To avoid wasting time and effort in collected unnecessary data, we should have a better plan. An organized data gathering plan and early start in data collection can prevent the delay for baseline modeling phases. The data collection can be difficult as people may not give enough attention to BPR effort or the people in the process are the first time to describe the process.

Before collecting the data, we also need to select the case categorization criteria, define types of data needed and data collection methods. The data collection methods includes: existing data, structured interviews and questionnaires.

Data for analyzing both the TO-BE system and AS-IS system (baseline data¬) are necessary.  To collect the baseline data, we can use the default or typical case, squeaky wheel process cases or exhaustive processes cases.



Case Study
In this part, I will use an example to simply demonstrate the activity “Operationalize process performance targets”

Take HSBC as an example, the counter waiting process will be redesigned. According to the template, the process redesign goal should be set first. The goal for this example is to shorten the counter waiting time. Second, the process performance target should be set. The performance target is to improve the counter waiting time, and the measure is limit the counter waiting time to 10 minutes per customer.

Lastly, the binding management decisions should be considered. The binding management decision should be number of staff will not be allowed to increase.

Week 7: BPR Methodologies

Source/Reference

1.      “An Investigation of the Methodologies of Business Process Reengineering” By M. Stoica, N. Chawat, N. Shin

 http://proc.isecon.org/2003/2123/ISECON.2003.Stoica.pdf

2.      “BPT Case Study – The Texas Instruments MMST BPR Project” By Paul Harmon 2002

    http://www.bptrends.com/publicationfiles/BPT%20Case%20Study-TIs%20MMST%20BPR%2011-02.pdf

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Response:

In Lecture 7, we have learnt the methodologies of BPR and as we know, five phases approach is one of the methodologies. There are as follow:

Phase 1 - Triggering & Executive Visioning

In this phase, the companies need to seriously consider the reasons of implementing BPR project and the objectives they want after implementing BPR project. It can help the companies to take a deep look for their own situation and clearly understand their direction of reengineering. Commonly, the companies want to reengineer because of the inefficiencies in business process, pressure from a supply chain partner or value creation opportunity etc. Also, the objectives of companies are highly structured, easily supported by IT or direct impact on customers etc.

Phase 2 – BPR Project Mobilization

In this phase, the companies need to make sure that all the necessary participants are ready for the BPR project. For example, the project leader, a core project team or a preliminary assessment of IT infrastructure etc.

Phase 3 – Process Redesign

In this phase, the companies need to redesign the process according to the five steps. There are Scoping, Modeling, Analysis, Redesign and Integration.

Phases	Activities	Deliverables	Participants
Scoping	l   Determine the objectives of the process modeling l   Process Boundaries l   Key process issues l   Process performance targets l   Data collection plan	n   Process Scoping Report	u  Process owners and partners u  Customers of the process u  BPR team
Modeling, Analysis and Redesign	l   Continue data collection l   Model “as-is” process l   Analysis and diagnose “as-is” process l   Design and model “to-be” process alternatives and select best alternative	n   Software-based Process Model n   Process Reengineering Report	u  Process Participants u  BPR team
Integration	l   Examine alternative IT integration options l   Adjust process design	n   Process Integration Plan	u  Information system design team u  BPR team

Phase 4 – Implementation& Organizational Transformation

In this phase, the companies need to adjust the IT infrastructure, skills from organization and people on the TO-BE process Also, it focuses on the design of the IS that is supportive to the TO-BE process.

Phase 5 – Monitoring & Maintaining

In this phase, the companies need to design and build a prototype of the new process. The implemented design should not be regarded as the end of the BPR process. In fact, it should be regarded as a prototype with successive iterations. Prototypes can help to produce faster delivery of results when projects are implemented, improving performance and customer satisfaction.

Case Study

Texas Instruments is a global analog and digital semiconductor IC design and manufacturing company that help customers by providing consumer and industrial electronics products with greater performance, increased power efficiency, and better quality.

After the universalizing of information technology, it decided to reengineer the traditional Procurement Process System (PPS).

Phase 1: Triggering & Executive Visioning

The procurement process was face-to-face and very time consuming because the staff needs to wait for the approval and negotiation when purchase request is made. Therefore, they wanted to increase their competitive advantage and improve the productivity, so the information technology could help them to achieve such objective.

Phase 2: BPR Project mobilization

Texas Instrument should make sure that a core BPR team is ready for the project so that they could then begin to analyze the major processes of the PPS.

Phase 3: Process redesign

This company conducted a detailed analysis on the PPS. They would take the five sub-steps including scoping, modeling, analysis, redesign and integration. They would decide and think of what the role of the information technology is in the system as well as the strengths and weaknesses of the processes.

Phase 4: Implementation & organizational transformation

In this phase, this company was going to edit and change the IT infrastructure of the new PPS. Besides, they had to consider the needs in human resource to see if there was a downsize arrangement or not. In addition, they should think about who are responsible for the new system and give training and support to them as well.

Phase 5: Monitoring & maintaining

Finally, Texas Instrument was required to continuously monitor and maintain the system. Also, they should make some improvements and modifications constantly to adopt to the changes in the reality.

Lecture 3 Strategic Framework and eBiz

Source / Reference:

1.       Sullivan-SloanMReview-1985

  Provided on WebCT

2.       http://web.ics.purdue.edu/~pbawa/421/pepsi%20cola%20pest%20case%20study.htm

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Response:

In Lecture 3, we have learnt the strategic framework and BPR.

In strategic framework, the environmental scan could be separated into internal analysis and external analysis, which could then be separated to macro-environment and micro-environment. PEST Analysis is used in macro-environment and SWOT Analysis is used to micro-environment and internal analysis. PEST Analysis and SWOT Analysis are important for business environment. In this article, PEST Analysis will be explained mainly.

PEST Analysis

PEST Analysis is used to analyze the external macro-environment that affects all firms. PEST includes and stands for Political, Economic, Social and Technical.

Political	The way and degree that a government meddles in the economy. Examples: l   Industrial safety regulations l   Mandatory employee benefits l   Wage legislation – minimum wage and overtime l   Anti-trust laws l   Taxation
Economic	The way that a government affects the purchasing power of potential customers and the firm’s cost of capital. Examples: l   Inflation rate l   Efficiency of financial markets l   Unemployment rate l   Discretionary income l   Infrastructure quality
Social	The ways that affect the needs of customer and the size of potential markets. Examples: l   Education l   Entrepreneurial spirit l   Demographics l   Leisure interests
Technical	The ways that lower the barriers of entry, improve the efficiency of production and affect the outsourcing decisions. Examples: l   Rate of technological diffusion l   Impact on cost structure l   Impact on value chain structure l   Technology’s impact on product offering

Example: Coca Cola

Coca Cola is a famous international cola company and its products sell throughout the world. In the following part, I will use PEST model to analyze the macro-environment of Coca Cola.

Political:

Coca Cola sells its products in the international markets, so the political change of different countries will restrict the operations of Coca Cola, for examples, civil unrest, government changes and restrictions on the ability to transfer capital across borders. Also, the changes in laws and regulations will affect it, for examples, the taxation requirements and environmental law in domestic or foreign jurisdictions.

Economic:

If the overall economy of the World is strong, the sales of products will be more optimistic. In the last few years, the overall economy of the World was affected by the financial meltdown. So many countries faced recession and the continuously increasing unemployment rate. Especially the U.S A, its economy changes affect many other countries. The business of Coca cola will be affected naturally. It should change as soon as possible when there is any change in economy of the World or in some countries. However, when the government lowers the interest rate, which means that the debt cost will decrease, Coca Cola can borrow money for investing in other products and researching in new products or technologies. The decreased interest rate will stimulate consumers to spend money. It is an opportunity for Coca Cola to promote its products to obtain purchases from the consumers.

Social:

In the recent years, more and more people pay more attention on healthy lifestyle. They change their lifestyle, such as preferring drinking water or diet colas instead of ordinary colas or beers. Coca Cola needs to tackle this trend seriously and implement related measures, such as selling Diet Coke and Coca-Cola Zero emphatically. It should also let the consumers know that its products still can suit their needs no matter how their lifestyle have changed.

Technology:

Coca Cola can have more promotions to attract their target customers through different kinds of channels, for examples, the Internet, newspaper and television. Improvements on those cans, plastic bottles and other products can also help to increase the sales of colas because some designs such as slimmer cans and lighter bottles can appeal to customers.