week 5 & 6 - Basic of BPR - 4th post

Source / Reference:
1) TQM >> Projects
http://www.tqm.co.za/index.php?option=com_content&view=article&id=55:project-3&catid=40:projects&Itemid=64

2) BPR-PPT, Lisa Baker
 www.docstoc.com/docs/303870/BPR-PPT

3) About Total Quality Management, Loraine Alkire
 http://www.ehow.com/about_4740144_total-quality-management.html

4)  Theories of Total Quality Management, David Carnes
http://www.ehow.com/info_8713566_theories-total-quality-management.html


Subject:
Distinguishes BPR and TQM
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Response:

I think this lecture gives me a more clear view of BPR by comparing with a similar management concept, Total Quality Management (TQM), which is a management concept I learned before.  TQM can be considered as a refinement of BPR. However, it is not necessary that a firm adopts TQM must have gone through BPR.

What is the difference between TQM and BPR? What the lecture notes listed are as follows:

	BPR	TQM
Size of change	Radical, Revolution	Incremental, Evolution
Execution approach	Top-down	Bottom-up
Frequency/Timeliness	One-short, once-for-all	Continuous
IT	IT based	Not necessarily IT based

After reading some articles and visiting some websites, I found there are some more differences. 

TQM focuses more on the quality, rather than cutting cost. According to David Carnes (Source 4), TQM means the companies designing motivation measures and management strategies to improve quality of service and products. It has limited scope of change that it changes the rules and human resources management strategies within a unit. It attempts to enhance the staff’s quality. Upgrading project of Sugar Ray Xulu Stadium (training venue) in Clermont is one the examples of adopting TQM (see Source 1). The company conducting the project states that the TQM project has made effort to improve staff's quality.

For BPR, it changes the procedures, working progress, production flow. It has a more holistic change to the firm. It uses a horizontal view to review and examine the responsibility to be re-allocated, in order to increase productivity. BPR is to re-engineer, re-design and re-formulate the business processes, by altering properties of business processes. It is to maximize values generated by business processes and properties of business processes.

Properties of business processes include:

•  Customer-facing
•  Cross-functional, cross-departmental, and cross enterprise
•  Hand-offs
•  Information flow around the process
•  Knowledge is created around the process
•  Multiple versions rather than one size fits all
•  Value adding mix for most/all of the processes
•  Degree of structure of a process

Work of BPR includes restructuring and enhancement to support front-line, while TQM usually puts more effort in front-line or a particular unit. BPR changes “processes”, not functions or tasks.

As TQM involves motivation, it is much more related to the managerial matters. How the managers lead, coordinate and control the staff and morale is vital to the success of TQM. For BPR, the design of business processes, or the inventiveness of the new processes flow is dominant to the organization. IT must be the enabler of the change.

Let’s use the BPR in Ford as an example. (see Source 2)

“AS-IS” condition: There are 2 business units receiving and processing information. There are more information and hand-offs between different units.

“TO-BE” condition: There is application of IT for the database to centralize all the data. There are fewer hand-offs between units. Fewer staffs are required to perform tasks.

In the transformation from “AS-IS” to “TO-BE”, Ford had not applied motivation tactics or alter the leading roles. Units still have the same functions as they were used to have. But the information flow around the processes is entirely different. It means the firm had rearranged the business flow (BPR), but not the task or goals of the working units (TQM).

To conclude, TQM mainly aims at enhancing quality of output/services, while BPR aims at  reducing redundancy by influencing the organization in a broader sense.
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Comment on Eleanor's 2nd post:
http://eleanorlyy-1230.blogspot.com/2012/02/week-6-business-process-reengineering.html
I think she has explained the importance of IT in BPR well. I understand that the use of IT helps process information, which leads to better knowledge management. The re-organization of the development of first wave BPR helps me to understand history of BPR more.

week 5-Critical view of misuse of Business Process Re-engineering -3rd post

Source / Reference:
1) "What went wrong with the business-process reengineering fad. And will it come back?" by Thomas H. Davenport and Laurence Prusak, with H. James Wilson

Davenport-BPRCritics-ComputerWorld-2003
http://www.computerworld.com/s/article/82290/Reengineering_Revisited

Subject:
Comments about the source article
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Response:

Business Process Re-engineering (BPR) is defined as radical, cross-functional, cross-departmental and cross-enterprise improvement in business processes. Business processes refers to flow of business operation adding value to input and deliver output to target customers.

The article I read is actually an excerpt from a book called “What is the big idea?” The authors of the book criticize misuse of BPR. The limitations of BPR it mentions are misconceptions of BPR means layoff, change is always much led by information technology (IT) employed and too radical change. After reading it, I realize that BPR does not just refer to change in way of business operation using IT, it is also similar to a management strategy, and it has limitations.

It states that it is commonly mistaken that BPR must mean layoff. BPR may not mean increase in number of processes and running costs. For example, a division may be added to cater for new business strategy like new product or new market. In addition, some processes may be rearranged to attain larger extent of specialization, hoping that more skillful staff helps boost productivity. There may be no change in number of staff but change in job specification and position only. Therefore, BPR does not essentially imply cut in head count.

As we all know, BPR involves making use of information system and IT to analyze business performance and processes. However, according to the article, many companies consider using enterprise resources planning (ERP) software like SAP as the start of BPR. They tend to rely on the IT tools a lot. They use IT to push their business rather than pull IT to comply with their business. I agree that the ERP software can help decision making a lot. However, as the author argues, it reduces the competitive advantage as most firms are using the popular software.

In fact, BPR is not necessarily a refinement of many working processes. As stated in the passage, companies tend to change a number of business processes and even the business strategies. It is true that altering business strategies may bring a new image and raise revenue for the firm. However, after all, it is a more risky decision than enhancing business processes one by one. Instead, in my opinion, firms should design a set of business processes which is flexible and facilitates incremental changes and updates. So that they can change their business strategies according to market response and trend. It needs less adjustment to align with the IT tools also.

The authors predict that the BPR in bridging the suppliers and customers will be popular projects. I agree that it is possible. It is because there are quite a number of intermediates between the manufacturers and consumers. It involves large amount of costs. BPR may be an effective way to build and provide a channel. Businesses may need a group of experienced staff to handle inquiries and platform to develop close connection between suppliers and customers. In other words, firms may not perform BPR by cutting the head count. However, if managers take a more risky plan, there may be re-design project for many business processes to streamline the work flow between suppliers and customers.

They also expect that, as new BPR tool grows, firms will find them difficult to integrate with existing IT to equip the business. It results in more employment in BPR consultants. Firms may realize it is not a cost-effective approach to rely on IT in a long run.

In conclusion, managers should have a clear concept on BPR. Firms need to apply with a clear aim and do not blindly follow the trends to attain least negative impact while enhancing business performance.


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Comment on Adrian's week 4 blog:
We have the same stance and we think company should consider different factors. He also mentions that it depends on how the company makes use of the alignment strategy. It is nice to share the research of the case study of a Singapore company. It makes the concept more vivid.

week4-Strategy Alignment Model(SAM)-2nd post

Source / Reference:
1)  “Strategic Alignment: Analysis of Perspectives” by P. Coleman and R. Papp 2006

http://sais.aisnet.org/2006/Coleman-SAIS2006-paper.pdf

Subject:
In Lecture 4 - Which alignment strategy in SAM model is the best? And why?
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Response:

Figure 1: Strategic Alignment Model

I think there is no best alignment strategy. More than one approach may be required to comprehensively align the information technology (IT) with business. As they all involve only 3 out 4 of the components in the model, there is/are limitation(s) for each of them. One firm may adopt it/them in different time, different business environment and different countries. Otherwise, working on only one perspective may not efficiently solve the problems.

Besides, the firms should choose the strategy that is suitable and feasible for them. It is because many factors including the corporate culture, nature of the firm and IT experts available will affect the effectiveness of alignment between business and IT. In my opinion, the 4 perspectives have different driver and different weakest component that they have different influence to the firms. Their effectiveness is different for different firms, even though the firms apply the same perspective. Here is some analysis of characteristics for the 4 perspectives according to my understanding about the SAM model.

 

Figure 2: The 4 perspectives of SAM

For strategy execution, IT tools are designed, employed or adjusted according to the business processes. With the business strategy acting as the driver and well-defined application area in the business process, it will be easier to decide what IT to employ. There is/are objective(s) of adoption of IT, which then confine the resources to be used by planning. As there is only slight change (or re-design) in business process and the business strategies the company applied, it will be less time-consuming for alignment of business process and IT. IT strategy does not have to be changed cross-functionally to align with the business strategy. In other words, it does not necessary refer to alignment in large scope of the business. It is a much faster and easier way to business re-engineering. This may explains why it is popular that there were 20% of the companies used this approach to do business process management [1]. However, if the company wants to employ the IT infrastructure by changing its position in the IT market or if the company wants a radical change, this perspective may not be a prominent choice. It may not be applicable for firms which want to follow the market and employ the new IT tools.

For technology transformation, IT competencies are identified. There will be no significant change in business process. IT strategies are adjusted according to the change in business strategies. IT infrastructure is employed and redesigned to align with the business. As the performance is measured in terms of IT market position(e.g. the leadership, purchasing, bargaining power in employing IT), more criteria(e.g. the comparative advantages and effectiveness brought by use of IT) other than financial aspect need to be assessed. However, the problems of business processes may be less concerned. There may be some processes not necessary but they may have wasted resources. Improvement in IT strategy may not be effective enough for redundant processes.

For competitive potential, business infrastructure is altered to align with the business strategy, which is functionally fitting the IT strategy. By finding and making use of the new IT competencies, new business opportunities can be identified. New business strategies are developed and thus brings corresponding new business infrastructure required. The organization infrastructure designed to strategically fit the business strategies are usually new products, work flow, and new market. So, market share, growth of the firm, and new product introduction are the performance criteria. However, it may be irrelevant and not useful enough for those which are have little applicable emerging IT competencies available (e.g. traditional food stores). It may not be suitable for the businesses having high risk in changing the business strategy too.

For service level, it ensures the effective use of IT that it concerns how IT improves the delivery of products and services. Business processes, organizational structure, human resources are re-structured due to the new IT applications and systems. Business processes are streamlined or simplified to improve supply chain and customers’ satisfaction. This perspective is especially useful for service companies. Compared to the products provided, the price offered or the materials used, the front-line staffs are important to boost sales revenue and improve goodwill. The enhanced processes can increase delivery and front-line support. However, companies selling tangible products may require unified business strategies to cooperate and achieve better resources allocation. It may be incompatible for these companies to change ‘organizational infrastructure’ without strategic alignment with 'business strategy'. IT strategies and organizational infrastructure are improved in this perspective. It may require large scale of business process engineering to fulfill the expectation. It means it is costly and involve high risk (e.g. staffs are not familiar with the new business operation, unpredictable changes in external environment that no routine solution prepared).

Though strategy execution is the most popular approach, popularity does not mean the best. It is just because of the ease of alignment.The domains and perspectives of SAM have inferior parts that some of them may not be always applicable to the companies. It may result in loopholes and thus adverse effect may occur in the business. Managers should consider whether they have enough resources, IT management skills, IT knowledge, etc. in order to apply the right perspective(s).

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Comment on Eleanor’s week 4 blog:

She gives a clear introduction to SAM and the 4 perspectives. She shares the same view with me that there are limitations and merits for the 4 perspectives. None of them is comparatively better. The best alignment strategy is the one best fit with the situation of the firm. However, it would be better if she can share more of her understanding about the SAM.