Week 6: How IT affects BPR?

It is realised that the position of IT on the BPR project has been different from before. Its role is being an enabler since it allows organisations to redesign the business processes. IT capabilities support and automate the processes in an efficient and effective way so as to enable the value to achieve the business strategy, rather than for a drastic rise in the revenue only.

For example, most organisations handle the typical works with software systems such as ordering fulfilments process and even creating documentation reports. Staff stores the data or files into the shared database or the server. The centralisation is so that other colleagues can easy access. It directly reduces delays in activities between each other since information sharing and instants feedbacks possible. Hence, the role of IT is crucial on the BPR project because it would contribute to the communication between different processes.

Here is one real example [1] of Hong Kong Housing Authority (HA) could be demonstrated how IT coordinates the business processes.

The Interactive Voice Response System (IVRS), call centre and IT sub-division helpdesk hotline of HA was challenged and unsatisfied because of its poor customer service, such as overload call centre, the system not respond to the callers’ enquiries as quickly as possible, easy loss of caller information and unrecorded talk time, shortage of support service for customers, and old FAQ and manuals, etc. HA therefore appointed an outsourcing company, EPRO, which supports to reengineer the business processes about the calling service. 

EPRO integrated IVRS, call centre, and helpdesk into a single platform. The new system with the shared database which provides voice guidance in terms of the pre-defined call flow, so that the callers can easy access to different enquiry information, and also take corresponding actions by step-to-step. The support service of complaints and enquiries handling has got largely improved. Besides, the new system closely follows complaints and enquiries cases, and then HA staffs would answer back to the caller as soon as possible while it always updates the status. The response time of the process can shorten. It can be proved that not only does IT facilitate the business processes, also improves the service level and customer satisfaction. 

The above diagram, The Leavitt Diamond, describes that the four components are interacted with each other included information technology use, organizational form, requisite people skills, and business processes. The other three must be changed at the same time while one is changed. Again, use the case study of HA [1], it was decided that the business processes needed to be redesigned due to poor service support and low customer satisfaction. Then, EPRO deployed the new technology, WISE-xb IVRS, to improve processes. It is sure that new people skills is necessary, so organisational form may be changed. This shows the principle of The Leavitt Diamond. In my view, it must be therefore easier to understand and handle since the complex function is broken down into four smaller one. Hence, it explains why that organisation in the paper [2] (Delvin Grant and Erhan Mergen, 1996) also adopted this framework for reducing the product cycle time. 

Last but not least, BPR is a radical one-time redesign and drastic improvement, mostly with IT. Due to its one-time approach, after a BPR project finishes, the organisation usually expects to get feedbacks what need to be follow up or continuous improvement for the quality. Hence, most organisations employ Total Quality Management (TQM) which is incremental and continuous improvement with minor IT to measure the performance and the quality after the BPR project. The below diagram describes why TQM and BPR share a cross-functional relationship.

REFERENCES: 

[1] EPRO Telecom Case Studies: Hong Kong Housing Authority Contact Centre Outsourcing Services, 2003, Available at: http://www.eprotel.com.hk/en/our_client-case_studies-detail_1a.php
[2] Applying Quality to Leavitt’s Framework to Solve Information Technology Problems: A Case Study, Delvin Grant and Erhan Mergen, 1996, Available at: http://www.emeraldinsight.com/journals.htm?articleid=883459&show=html

Week 5: The Principle of BPR

BPR is defined as “the fundamental re-thinking and radical re-design of business processes to achieve dramatic improvements in critical contemporary measures of performance, such as cost, quality, service, and speed”, repeatedly told by Dr. Helen DU during her lectures. In my understanding, the basic idea behind this term is to eliminate some redundant processes and also combine some processes into one. I think, also, the organisation may actively execute the centralised operation in its business processes with the shared database. Its benefits are the reduction of operational cost and cycle time in the process, the increased efficiency of the process, and the increased data consistency on the process. 

A paper (V. Grover and M. K. Malhotra 1997) described and verified those benefits with the two successful examples of BPR, one is Ford’s accounts payable process, and another is Detroit Edison’s work order process. Nevertheless, here my statement is that not all organisations can be easy implement the BPR in achieving dramatic performance gains due to the lack of consensus on the massive and complex BPR methodologies. Therefore, as the authors wrote, we may realise some rationales behind the BPR and myths through the successful instances. 

Reengineering reflects this horizontal view by emphasizing notions of processes, process owners, teams and empowerment, and de-emphasizing hierarchical structures. In fact, the organisations have many processes that usually have the customer involvement such as the ordering process, so the customer focus is necessary in BPR for enhancing the customer responsiveness and increasing the process performance. In addition, junior staffs always start the work on the activities until the top management delegates. It causes the longer lead time and approval delays in the traditional top-down organisational approach. Hence, empowerment is crucial that low level staffs would have the decision making. Moreover, use the example of the ordering process again; it takes lots of staffs in different departments and organisations to handle many sub processes from customer request and order fulfilment to collecting payment, so that it is usually a cross-functional work. Therefore, my opinion is that reengineering to a business should bring a positive impact because its effort not only improves the business process, but produces new products and service and increases the revenue and the operating savings.

Even though the authors indirectly said that these myths might be true and appropriate only in some organisations, my thought is that those are worth to stay on our minds because they are a good guideline for helping the organisation reengineering of the business process. Last but not least, I quoted the part of the contents with my lots of reflection for sharing in the following. 

• ""Reengineering is a radical one-time approach" is changing … some firms are finding that continuous improvement through stewardship of processes may be more beneficial in the long run…, "Reengineering should focus on cross-functional core business processes" is fine, but many piecemeal improvements within functions can also add up to significant change and have proven very successful." – The improvement is not one-time and needs a lot of time which can bring the greatest benefit to and influence on the business included the processes and the reduction of the operational cost and time. I think that it is an incremental effort to the business. 
• ""Reengineering involves breakthrough performance gains" is being challenged as benchmarking and measurement of these gains can prove elusive. In many cases, more moderate gains that are consistent with the organizational culture and orientation define success."  –  This is realism and true that most organisations directly associate the performance gain from the reengineering with their business objectives itself. If reengineering would help organisations to achieve the organisational goals, it can be defined as the success to reengineering. Therefore, it is a harsh measurement of performance. 
• "" Reengineering enables change primarily through IT" … Many of these innovations do not involve or require IT." – Since the technology advances, not ten years ago, many business processes now may be paperless and electronic. Some applications get improved by IT such as eChannel System. It can reduce the processing time. Hence, my opinion is IT now acts as a critical role of reengineering efforts. Business aspect is still important in this time. 
• "" Reengineering enhances individual capacities through empowerment and teams" is all well and good but many process-change projects are being defended based on cost objectives … some bottom-up process change initiatives with strong inputs from line workers have proven successful…" – I just said earlier in this post, top-down processes only lead to longer cycle time and approval delays on the processes. Hence, in terms of speed, I rather accept the bottom-up approach to the business processes in order to improve processes and speed up processes. Organisations need to accept the empowerment in the organisational structure if dramatic improvements. 

Thus it can be concluded that, not only does BPR effort significantly improve the processes in the business, it also increases the profitability. Besides, redesign the process must be a continuous and incremental improvement rather than one-shot, also focuses customer, then organisations can maximize the long-run benefits on BPR projects. 

REFERENCES: 

[1] "Business Process Reengineering: A Tutorial on the Concept, Evolution, Method, Technology, and Application" by V Grover and M K Malhotra 1997, pp. 193-213

Week 4: The Strategic Alignment Model (SAM)

Source/Reference: 

[1] "Strategic Alignment: Leverage Information Technology for Transforming Organization" by J C Henderson and N Venkartraman 1993 

[2] Lee Cheuk Him’s post, Week 4 – The Strategic Alignment Model (SAM), URL http://leech-9076.blogspot.com/2012/02/source-reference-1-strategic-alignment.html

Subject:

In Lecture 4 – Which alignment strategy in SAM model is the best? and why?=======================================================================
Response:

It cannot be strongly defined that which alignment perspective the best is. The answer is largely dependent on the strategy of the organisation, the nature of its business, the needs of customers, and the business environment Sometimes, there is only one is ‘feasible’ to the organisation. However, it is possible that not the only one is aligned between the business and the IT strategy simultaneously due to many influencing factors. The alignment was used may even shift to the other potential perspective(s) since those of independent variables change over the time. Therefore, it is crucial that the top management must realise what the concepts of dominant alignment perspectives in the SAM are before adopting them.

The SAM (Henderson and Venkatraman, 1993) consists of four domains, Business Strategy, IT Strategy, Business Infrastructure, and IT Infrastructure. Thus, there are a total of four dominant alignment perspectives resulting from the cross-domain alignments. Each alignment perspective has also three external or internal domains made and one of domains usually is a driver of the rest domains. Each alignment perspective has its existed value. In the following, the actions of four dominant alignment perspectives are introduced on each in this post.

SAM: Strategy Execution perspective

The alignment perspective that is the most focus and classic of general companies is the Strategy Execution perspective. The driver is the business strategy. It supports the top management articulates the business logic and choices related to a business strategy so that the IS manager designs and implements the IS infrastructure and processes that support the chosen business strategies. And, the performance is measured by the financial parameters typically, cost center focus. E.g. some companies can reduce the time required to the processing orders by the IS after employed the Strategy Execution perspective. It directly reduces the operational cost for the entire process. The cost center will not contribute the profit making of the business even though so.

SAM: Technology Transformation perspective

The alignment perspective is appropriate to the firms of technology development. The Technology Transformation perspective is again driven by the business strategy as well as the Strategy Execution perspective. Nevertheless, here the role of the top management is a technology visionary that is responsible to identify the best possible IT competencies through appropriate positioning in the IT marketplace included the strengths and the weaknesses of the IT infrastructure, and so far how the risks posed by of the new IT manage. And, the role of IT manager is a technology architect that designs and manages the technologies defined by the top management, so that the architecture can support the IT vision and mission. The technology leadership is a standard to measure its performance of IT market position. Benchmarking approach will be the best practice to compare the organisation itself with other same industry and make such improvements.

SAM: Service Level perspective

The third one is described is the Service Level perspective which is a customer-oriented alignment, aims to deliver the best value to satisfy the customer demands by the alignment of IT infrastructure. It is appropriate to the service industry. The driver for the alignment perspective is the IT strategy. It supports the top management prioritizes and articulates to allocate the limited resources within the organisation and also in the IT marketplace, and can be responsive to the growing and fast-changing demands of customers. And, the IS manager, as the role of executive leadership, supports key areas of the internal business and balances the short-term objectives with the long-term investment in IT. Therefore, the performance criteria are the degree of the customers’ satisfaction. Besides, the role of the business strategy is relatively indirect to influence the perspective.

SAM: Competitive Potential perspective

The key of the Competitive Potential perspective is to how enable the adoption of new business strategy with emerging IT capabilities. From the new business strategy then realises the competitive advantages of the organisation. So, the driver of the alignment perspective is the IT strategy that focuses to provide the value-add to the business strategy and enable the new strategic opportunities for the business. The top management acts as a business visionary that must enable to smooth transform the business through IT for achieving the vision. The IS manager acts as a catalyst who identifies and interprets the trends in the IT environment to assist the business managers to understand the potential opportunities and threats from an IT perspective. The business performance is measured by the business or product leadership such as the market share, the growth and the new product introduction.

Thus, the four dominant alignment perspectives can have their different degrees of functionality to the business. However, the IS manager should carefully consider which alignment perspective is feasible to adapt the business because inappropriate alignment can hinder the development and integration of the business strategy and the IT strategy and cause the adverse effect to the business of the organisation. Besides, if the organisation has multiple goals, it may usually need more than one alignment to the business. The organisation would shift its alignment as the organisation strategy, customer needs, or the business environment is ever-changing. So, the coordination of multiple alignments is necessary and important.

In addition, the IS manager needs to understand and examine both the business and the IT strategies and infrastructures in order to a smooth running on the business. Also, both the CEO and the CIO need to determine where it is preceded related to the business strategy and the IT strategy. Hence, they must communicate with others senior executives and also assess where the company is preceded related to the business strategy and the IT strategy. 

In fact, it proved that the model is designed to encourage and facilitate the appropriate response to changing business conditions. An organisation may be comfortable in one alignment perspective now, but may change to others in the future which depend on its business environment and competitors. As said by Henderson and Venkatraman, “We do not believe that there is one universally superior mode to formulate and implement strategy. If there were, it would not be strategic because all firms would adopt it”. In conclusion, there is no the best alignment perspective, and there is only the appropriate alignment perspective to the business under business conditions.

In the following, there are my little comments on the post of the classmate.

My comment: Lee’s view and argument are same as mine that also think no one is the best alignment. And, it only depends on many business conditions such as the business nature. In addition, I agree the communication is one of important components before employing an alignment so that realises more about the business and IT strategies and infrastructures together and facilitates the development of the alignment.