INFS3604 lecture 1 2013

7/29/2019 INFS3604 lecture 1 2013

1/29

INFS3604

Business ProcessManagement

A historical and organisation

perspective

Week 1 Semester 1 2013

7/29/2019 INFS3604 lecture 1 2013

2/29

UNSW INFS3604 S1 2013

Overview of course

Why business process?

History of BPM How did we arrive at thispoint?

BPM is about business effective and

efficient not just IT.

BPM is for everyone not just IT specialists.

2

7/29/2019 INFS3604 lecture 1 2013

3/29


Our learning

3

Program goals Course learning outcomes Assessment

Knowledge Synthesise the principles of organisational strategy and

process design.

Explain the role of IT in BPM.

Propose business solutions in written and verbal forms for

process innovation and process redesign projects.

Assignment 1; team

assignment; examination

Critical thinking and

problem solving

Document processes using a process mapping tool using the

BPMN.

Analyse the performance of existing processes and identify

process improvement.

Create a BPM implementation strategy and implementation

plan for an organization.

Lab exercises; assignment

1; team assignment;

examination

Written communication Propose business solutions in written and verbal forms for


Create a BPM implementation strategy and implementationplan for an organization.

Assignment 1; team

assignment; examination

Oral communication Propose business solutions in written and verbal forms for


Presentations

Teamwork Propose business solutions in written and verbal forms for


Analyse the performance of existing processes and identify

process improvement.

Create a BPM implementation strategy and implementation

plan for an organization.

team assignment; final

exam

7/29/2019 INFS3604 lecture 1 2013

4/29


Prescribed readings:

Sharp and McDermott chapters 1 and 2.

Hammer 1990

Davenport and Short 1990. (pages 1 9)

4

7/29/2019 INFS3604 lecture 1 2013

5/29


House keeping

Assignment 1due in week 4.

5

7/29/2019 INFS3604 lecture 1 2013

6/29


What is a business process?

A complete end-to-end set of activities that provide

value, through the delivery of a product or service, to the

customer of the service. Sharp and McDermott

How an organisation does its work the set of activitiesit pursues to accomplish a particular objective for a

particular customer.

Thomas Davenport

Process: an organised group of related activities thattogether create a result of value to the customer.

Michael Hammer

6

7/29/2019 INFS3604 lecture 1 2013

7/29UNSW INFS3604 S1 2013

What is a business process?

A complete end-to-endsetofactivities that provide

value, through the delivery of a product or service, to the

customerof the service. Sharp and McDermott

How an organisation does its work the setofactivitiesit pursues to accomplish a particular objective for a

particularcustomer.

Thomas Davenport

Process: an organisedgroup of relatedactivities thattogether create a result ofvalue to the customer.

Michael Hammer

7

7/29/2019 INFS3604 lecture 1 2013

8/29UNSW INFS3604 S1 2013

A process is A guide

Clarity as to who does what and why

How to understand contribution

About collaboration, not pass the parcel

Sharing in a customer outcome

Focused on the customer

About adding value.

8

7/29/2019 INFS3604 lecture 1 2013

9/29UNSW INFS3604 S1 2013

What a process is not

A process is not: A low level task definition

A functional internal way of doing things

What you do to fulfil job responsibilities.

9

7/29/2019 INFS3604 lecture 1 2013

10/29UNSW INFS3604 S1 2013

Why bother with process?

Enables operationalisation of business strategy.

Improves customer perception of value

Improves/capacity/throughput/revenues

Ensure consistency of outputs

Ensures requisite output of quality

Reduces cycle time

May reduce cost

Reduces risk

Facilitates continuous improvement.

10

7/29/2019 INFS3604 lecture 1 2013

11/29UNSW INFS3604 S1 2013 11

7/29/2019 INFS3604 lecture 1 2013

12/29


A BPM timeline

Craft workers/Artisans pre-industrial revolution

1776 Adam Smith heralded the industrial revolution

James Watt invented the steam enginepower that only new

industrial organisations could harness new organisation called for

the division of labor into specialised tasks.

Legacy of the industrial revolution was the division of complex work

into simpler tasks

Rise of the white collar worker to plan, organise and control

Rise of specialisation

Organisations as a means of harnessing the benefits of functions.

12

7/29/2019 INFS3604 lecture 1 2013

13/29


Evolving drivers of process

13

Pre-industrial era Industrial Era Information Era

Trades Jobs Roles

Skills knowledge Technical knowledge Role knowledge

Task work Production lines Teams, networks

Family pass-down Apprenticeships Education

Individual Functional Process, project

Self management Supervision Leadership

Clerical Management Team support

Verbal Paper Electronic

Memory Manuals Database

Simple structure Pyramid Matrix/network/cell

7/29/2019 INFS3604 lecture 1 2013

14/29


Benefits of specialisation include:

Increased output and economies of scales with

consistent quality

Easier management of personnel

Development of high level skills

Ability to scale up or down

Educational preparation for specialisations.

14

7/29/2019 INFS3604 lecture 1 2013

15/29


Function and organisation

View of organisations: working towards a

common purpose or a collection of functions?

15

7/29/2019 INFS3604 lecture 1 2013

16/29


However over time problems with

specialisation emerged:

Loss of the big picture view, focus on process

and function rather than the whole

Lack of customer focus; if the function was

effective that was sufficient

Competition between functions Lack of co-ordination between functions

Enter Reengineering

16

7/29/2019 INFS3604 lecture 1 2013

17/29


Drivers of re-engineering

Customer sophistication

Deregulation

Increasing competition on a global level

Therefore: a need to improve effectiveness

and efficiency.

17

7/29/2019 INFS3604 lecture 1 2013

18/29


Principles of re-engineering

Organise around outcomes

Have those who use the output of the processperform the process

Link parallel activities during the process, ratherthan at the end of the process

Treat geographically dispersed resources as ifcentralised

Capture information at the source

Subsume information processing work into the realwork that produces the information

Flatten organisation layers.

18

7/29/2019 INFS3604 lecture 1 2013

19/29


Themes of re-engineering

Decentralise decision making to the decision

maker to be responsive to the customers

needs: flatten organisations; less need for

middle managers.

Use of IS/IT

Re-design jobs

19

7/29/2019 INFS3604 lecture 1 2013

20/29


Re-engineering: a focus on

organisations and processes

Organisations must be effective and efficient: Effective: do the right things

Efficient: do things in the right way.

As the environment of organisations andbusinesses is continuously changingorganisations must engage in the fundamentalrethinking and radical redesign of businessprocesses to achieve dramatic improvement in

critical, contemporary measures of performance,such as cost, quality, service and speed(Hammer & Champy 1993). This was termed re-engineering.

20

7/29/2019 INFS3604 lecture 1 2013

21/29


Levels of concern:

Enterprise level

Business process model

Implementation level

Alignment both vertically and horizontally: activity goals must berelated to the process goals, which must in turn be derived from the

strategic goals of the organisation.

An end to silo thinking.

The role of BPR An integrated view of business processes - a

holistic view

The role of IT in BPR

IT enables BPR

21

7/29/2019 INFS3604 lecture 1 2013

22/29


Re-engineering: Re-structuring business

processes means restructuring jobs

Organisation Traditional Re-engineered

Job design Narrow Broad

Structure Hierarchical Flat

Career moves Vertical Horizontal

Work rules Procedures Judgement

Management Supervision Leadership

People skills needed Structured Adaptive

22

7/29/2019 INFS3604 lecture 1 2013

23/29


Demise of Re-engineering:

misuse and negativity

I reengineered my department by putting our forms on

an imaging-based work flow system.

We reengineered our customer service operation by

laying off 30% of our staff. Our logistics process was reengineered by outsourcing

to a low cost provider.

Ignoring:

Motivation Human resources, human perspective

Focus on functional work units rather than on process

Continuous improvement.

23

7/29/2019 INFS3604 lecture 1 2013

24/29


Value chain: a means of

modelling modern organisations

Porter 1985. Competitive Advantage: Creating

and sustaining superior performance.

A comprehensive collection of all the activities

that are performed to design, produce, market,deliver and support to a product line

Business as a system.

Applying the value chain to the businessprocesses. Fig 1.3 Harmon.

24

7/29/2019 INFS3604 lecture 1 2013

25/29


Re-engineering in context: the

Value Chain Model

Process

Materials

Machine tools

Material handling

Packaging

Maintenance

Testing

Building design

and operationsInformation systems

Organisation infrastructure

HR management

Technology development

Procurement

Process

Materials

Machine tools

Material handling

Packaging

Maintenance

Testing

Building design

and operationsInformation systems

Transportation

Material handling

Material storage

Communications

Testing

Information systems

Transportation

Material handling

Packaging

Communications

Information Systems

Media

Audio/video

Communications

Information systems

Testing

Communications

Information systems

ServiceInbound

logisticsOperations

Outbound

logistics

Marketing

and sales

M

A

R

G

I

N

25

7/29/2019 INFS3604 lecture 1 2013

26/29


Whats important to Porters concept is that

every function involved in the production of the

product, and all of the support services from

information technology to accounting, should beincluded in a single value chain. Its only by

including all of the activities involved in

producing the product that a company is in

position to determine exactly what the product iscosting and what margin the firm achieves when

it sells the product.

26

7/29/2019 INFS3604 lecture 1 2013

27/29

UNSW INFS3604 S1 2013 27

R fi 2 2

7/29/2019 INFS3604 lecture 1 2013

28/29


Recap: fig. 2.2 Sharp and McDermott

1980s:

Quality becomes a major

Driver and business as a

system view promoted

1990-1993:BPR hysteria,

Largely misapplied.

1993-1995:

BPR backlash

2000:

Tech meltdown

1985:

First references to

cross functional work;little or no mention of

business process

1990:

Hammer unleashes

Business ProcessReengineering

(BPR)

1995-2000:

The wonder years:

Intense focus on expensivetechnology investments;

business process issues

largely ignored

Post-2000:

BPx returns!

- Do more with less

- Disappointment with

wonder years ROI

28

7/29/2019 INFS3604 lecture 1 2013

29/29


Hammer 1990

Davenport and Short 1990

Both papers focus on redesigning work in

organisations so that business processes are

effective and efficient. Hammer uses the term

reengineering work while Davenport andShort use Business Process Redesign.

Davenport and Short offer a more

methodological approach while Hammeroffers guidelines for reengineering.

Documents

INFS3604 lecture 1 2013