week3-Planning of BPR-1st post

I have read an article titled System Planning in the Information Age. It mainly discuss about the planning stage of business process re-engineering (BPR) in firms nowadays.

The article introduces the four environments of IS/IT strategy of a firm (which are opportunistic, complex, traditional and backbone) to be a determining condition to review about the business in planning BPR. It suggests that different planning approaches works better for different internal context (see figure below). More paragraphs are about planning of firms in the fourth quadrant, which adopt business system planning (BSP) approach. The major two issues for firms in the fourth quadrant are updating the applications development portfolio and retooling management disciplines [1]. Other aspects need to be considered in the planning stage are support of new organizational design, networking resource management, development of information systems architecture and avoidance of irrelevant planning. I also agree with the author that the above perspectives are essential. 

For instance, for support of new organizational design, the change in business process may affect the organizational structure. There may be some functions that are not sufficient to support business operation after the change in system. For example, in a bank, the credit proving process is being possessed by the new credit proving unit instead of customer relation unit and the credit rating unit. The new business unit will then need to have enough IT support to access the customer database and the credit rating database.

Other than internal context, as most corporations are engaging in e-Commerce, to define the business model of the firm is useful as well. The business models are Business-to-Business, Business-to-Consumer, Consumer-to- Business and Consumer-to- Consumer. They specify the areas of application of BPR. I think this helps acquisition and allocation of IT resources. For example, networking experts are employed to improve communication facilities in a firm (B2B), and website maintenance team is employed for the website promoting the firm to customers (B2C).

Moreover, apart from the evaluating SWOT analysis can be used to evaluate a qualities and constraints of a firm during the BSP planning stage. By analyzing the strengths, weakness, opportunities and threats of the firm in the industry, the firm can understand both the internal and external situation. So, that requirements and problems can be confirmed.

Furthermore, for external situation, firms can also use PEST analysis. PEST refers to political, economic, social and technological factors of the business environment. It is to assess the market position of the firm. It facilitates in setting objectives in planning for BPR.

In the article I read, it suggests a contingent approach to planning as well. The author suggests the firms to be aware of the difference between the internal context and competition in the industry [1].  Besides, deviation between reality and the staff's perception towards the system for business process. It lengthens the time and increases the resources required to educate the staff to adapt to the new system or new business process design. Learning curve may be lengthened in this way too.

In my opinion, limitations of the business process management justify the suggestion of the author as well. One of the limitations of BPR is that it assumes a firm has a worse performance that it must be necessary to have a radical change in business processes [2]. The firm may perform well that it does not require change to compete with others, or it may not be the right time for the firm to change. However, from my point of view, since technology leaps forward rapidly, the firms may better change, rather than stay at the current stage and remain the policies unchanged. It is because there is a tendency that firms will frequently using BPR to increase competitiveness. Especially for those in 3rd quadrant (Traditional), IT may be an essential tool for these firms to grow and expand, or even survive.

To conclude, planning is crucial in BPR. A number of factors need to be considered to attain a better outcome or design. Both internal and external analysis are required. A more conservative approach in planning is preferred to minimize losses due to limitations of BPR.

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Reference:
1) Cornelius H., Sullivan, Jr., "System Planning in the Information Age", Information Technology Planning Corporation, 1985

2) Business Process Re-engineering, Wikipedia. 
http://en.wikipedia.org/wiki/Business_process_reengineering