Objective
In this unit, we
shall cover the following topics in detail:
a) Concept of Business Process
Reengineering
b) Role of information
technology & Impact of BPR on organizational performance
c) Tools to support BPR &
Benefits to Business organization
d) Meaning of 'Management
Information Systems (MIS) & Risks Associated With MIS
e) MIS reviews
f) Decision Support System
(DSS) and its applications
g) Taxonomies & History of
DSS
h) Architecture of DSS
i) Characteristics and
Capabilities of DSS
j) Meaning & scope of
Executive Information System
k) Contents of EIS
l) Characteristics of
Successful EIS Implementations
m) Information Sharing Vs
Information Hoarding
n) EIS Design, Prototyping
& Evaluation
o) Advantages and disadvantages
of EIS
p) Data warehousing and its
applications
q) Data Warehouse Design and
Creation
r) Multi-dimensional Analysis
Tools
s) History of data warehousing
t) Advantages of data
warehousing & its limitations
u) Concept of DATA MINING and
its applications
v) Technological
infrastructure required for Data Mining
w) Meaning of OLAP,
MOLAP, HOLAP and its advantages
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Business Process Reengineering
Davenport & Short (1990)
define business process as "a set of logically related tasks performed to
achieve a defined business outcome." A process is "a structured,
measured set of activities designed to produce a specified output for a particular
customer or market. It implies a strong emphasis on how work is done within an
organization" (Davenport 1993). In their view processes have two important
characteristics: (i) They have customers (internal or external), (ii) They
cross organizational boundaries, i.e., they occur across or between
organizational subunits. One technique for identifying business processes in an
organization is the value chain method proposed by Porter and Millar (1985).
Processes are generally
identified in terms of beginning and end points, interfaces, and organization
units involved, particularly the customer unit. High Impact processes should
have process owners. Examples of processes include: developing a new product;
ordering goods from a supplier; creating a marketing plan; processing and
paying an insurance claim; etc.
Business process reengineering
(often referred to by the acronym BPR) is the main way in which organizations
become more efficient and modernize. Business process reengineering transforms
an organization in ways that directly affect performance
Business process reengineering
(BPR) is the
analysis and redesign of workflow within and between enterprises. BPR reached
its heyday in the early 1990's when Michael Hammer and James Champy published their best-selling book,
"Reengineering the Corporation". The authors promoted the idea that
sometimes radical redesign and reorganization of an enterprise (wiping the
slate clean) was necessary to lower costs and increase quality of service and
that information technology was the key enabler for that radical change. Hammer and Champy felt that the design of
workflow in most large corporations was based on assumptions about technology,
people, and organizational goals that were no longer valid. They suggested
seven principles of reengineering to streamline the work process and thereby
achieve significant levels of improvement in quality, time management, and
cost:
1. Organize around outcomes,
not tasks.
2. Identify all the processes
in an organization and prioritize them in order of redesign urgency.
3. Integrate information
processing work into the real work that produces the information.
4. Treat geographically
dispersed resources as though they were centralized.
5. Link parallel activities in
the workflow instead of just integrating their results.
6. Put the decision point
where the work is performed, and build control into the process.
7. Capture information once
and at the source.
Role of information technology
Information technology (IT)
has historically played an important role in the reengineering concept. It is
considered by some as a major enabler for new forms of working and
collaborating within an organization and across organizational borders.
The early BPR literature,
e.g. Hammer &
Champy (1993), identified several
so called disruptive technologies that were supposed to challenge traditional
wisdom about how work should be performed.
1. Shared databases, making
information available at many places
2. Expert systems, allowing
generalists to perform specialist tasks
3. Telecommunication networks,
allowing organizations to be centralized and decentralized at the same time
4. Decision-support tools,
allowing decision-making to be a part of everybody's job
5. Wireless data communication
and portable computers, allowing field personnel to work office independent
6. Interactive videodisk, to
get in immediate contact with potential buyers
7. Automatic identification
and tracking, allowing things to tell where they are, instead of requiring to
be found
8. High performance computing,
allowing on-the-fly planning and revisioning
In the mid 1990s, especially
workflow management systems were considered as a significant contributor to
improved process efficiency. Also ERP (Enterprise Resource Planning) vendors, such as SAP, positioned
their solutions as vehicles for business process redesign and improvement.
Impact of BPR on
organizational performance
The two cornerstones of any
organization are the people and the processes. If individuals are motivated and
working hard, yet the business processes are cumbersome and non-essential
activities remain, organizational performance will be poor. Business Process
Reengineering is the key to transforming how people work. What appear to be
minor changes in processes can have dramatic effects on cash flow, service
delivery and customer satisfaction. Even the act of documenting business
processes alone will typically improve organizational efficiency by 10%.
Tips for Implementation of BPR
project
The best way to map and
improve the organization's procedures is to take a top down approach, and not
undertake a project in isolation. That means:
• Starting with
mission statements that define the purpose of the organization and describe
what sets it apart from others in its sector or industry.
• Producing vision
statements which define where the organization is going, to provide a clear
picture of the desired future position.
• Build these into a clear
business strategy thereby deriving the project objectives.
• Defining behaviours that
will enable the organization to achieve its' aims.
• Producing key performance
measures to track progress.
• Relating efficiency
improvements to the culture of the organization
• Identifying initiatives that
will improve performance.
Once these building blocks in
place, the BPR exercise can begin
Methodology
Although the labels and steps
differ slightly, the early methodologies that were rooted in IT-centric BPR
solutions share many of the same basic principles and elements. The following
outline is one such model, based on the PRLC (Process Reengineering Life Cycle)
approach. A more detailed description of this model is described here:
Simplified schematic outline
of using a business process approach, exemplified for pharmaceutical R&D:
1. Envision new processes
1.
Secure management support
2.
Identify reengineering opportunities
3.
Identify enabling technologies
4.
Align with corporate strategy
2. Initiating change
1.
Set up reengineering team
2.
Outline performance goals
3. Process diagnosis
1.
Describe existing processes
2.
Uncover pathologies in existing processes
4. Process redesign
1.
Develop alternative process scenarios
2.
Develop new process design
3.
Design HR architecture
4.
Select IT platform
5.
Develop overall blueprint and gather feedback
5. Reconstruction
1.
Develop/install IT solution
2.
Establish process changes
6. Process monitoring
1.
Performance measurement, including time, quality, cost, IT performance
2.
Link to continuous improvement
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