W7 - BPR Methodologies

Source / Reference:
1) "BUSINESS PROCESS REENGINEERING: A CONSOLIDATED METHODOLOGY" by Subramanian Muthu, Larry Whitman, and S. Hossein Cheraghi 1991
http://webs.twsu.edu/whitman/papers/ijii99muthu.pdf
2) "A comparision of BPR methodologiesUsing the NIMSAD framework" by Joshua Liem
http://www.met-online.nl/pdf/MET12-4-8.pdf

Subject:
In Lect 7 - Evaluation of existing methodologies
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Response:

Introduction

Lots of studies and researches are undertaken to study about why lots of BPR efforts fail in the past decades in spite of the aid of BPR methodologies. People start to question about if the current BPR methodologies are problematic and flawed. In this article, the existing BPR methodologies will be evaluated.


Framework of evaluating BPR methodology - NIMSAD

NIMSAD (NormativeInformation Model-based Systems Analysis and Design) in general is a frame work uses as way to understanding and solving problems. According to NIMSAD, methodologies are evaluated through four elements as following:

- Methodology context
- Methodology user
- Methodology (Problem solving process)
- Evaluation

figure 1: NIMSAD framework (Jayaratna, 1994)

figure 2: NIMSAD phases

The advantages of using this framework to evaluate BPR methodology are:

- not limited to specific methodlogy
- wide of scope
- applicable to reality


Evaluation of BPR Methodologies

Two BPR Methodologies will be evaluated in this section, they are 1) Petrozzo & Stepper's Methodology and 2) Davenport & Short's Methodology.

1) Petrozzo & Stepper

figure 3: Petrozzo & Stepper's Methodology 

Strength:

- Identify the scope of project clearly before implementing the project
- Gather data before making decision to prevent making big errors
- Emphasize the use of innovative technologies
- Clear guidelines are provided before implementation
- Emphasize the importance of restructuring organization to bring about radical changes

Weakness:

- may take a long time to implement the BPR project
- Managers may empower the project, stakeholders may not involved
- Linear process without much evaluation in each stage
- Physical design is not considered

2) Davenport & Short

figure 4: Davenport & Short's Methodology

Strength:

- Process objective is clearly defined which prevent ambiguity
- Key process to be changed is clearly identified
- Emphasize IT as enabler
- Prototype is built before implementation

Weakness:

- Focus on a single process rather than structural radical improvement
- No clear guideline on how the project is implemented
- Linear process without much evaluation in each stage

Conclusion

The common features of existing methodologies are focusing on identifying the project scope and the use of IT. However, how to implement the project physically is normally not modeled. Managers may encounter lots of problems in the implementation stage due to unclear solution.

Furthermore, there are not much evaluation between each stage, which make the BPR project a linear process rather than cyclic process. Since no recursive amendments can be made, many errors may be produced in the latter stage due to unthoughtful ideas in the early stage.

As none of the existing methodologies is a perfect methodology, managers may need to combine the strengths of each methodology into a new methodology and make suitable adjustments in different situations rather than just follow these rigid methodologies.

Gather information about successful BPR projects as references to understand the important factors for BPR projects to succeed may also help to increase the success rate of BPR project.

W6 - Basics of BPR (2)

Source / Reference:
1) "Making the Case for BPM: A Benefits Checklist" by Jim Rudden 2007
http://www.bptrends.com/publicationfiles/01-07-ART-MakingtheCaseforBPM-BenefitsChecklist-Rudden.pdf
2) "EXPLORING THE RELATIONSHIPS BETWEEN CORE ELEMENTS OF TQM IMPLEMENTATION" by Rashid Al-Jalahma and David Gallear 2010
http://www.iseing.org/emcis/EMCIS2010/Proceedings/Accepted%20Refereed%20Papers/C94.pdf
3) "Nexus Account Management Case Study" by BPTrends 2005
http://www.bptrends.com/publicationfiles/04-05%20CS%20Nexus%20-%20Ultimus.pdf
4) "Casual Male's Distribution Center Case Study" by BPTrends 2005
http://www.bptrends.com/publicationfiles/04-05%20Casual%20Male%20Case%20Study%20-%20CommerceQuest.pdf


Subject:
In Lect 6 - Keys for successful BPM projects
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Response:

Abstract

Nowadays, firms tend to use BPM instead of BPR or TQM as the management approach to align with their business. The main reason for BPM technique becomes so popular is that the successful rate of implementing BPM project is about 90% while the failure rates of implementing BPR project and TQM project are relatively higher.

Furthermore, the return of implementing BPM project is also a tempting factor. A recent study from Gartner found that more than 70% of successful BPM projects delivered an internal rate of return greater than 15%, some firms even can achieve 100% rate of return.

Since the successful rate and the rate of return are so high, firms have greater expectation on BPM project. However, is BPM really applicable to all organizations and ? In my opinion, the answer is NO. Although the successful rate of implementing BPM project is very high, there are still risks that needed to be considered, otherwise, the project will be doomed to failure. Therefore the most important thing to understand before implementing BPM project is to know about what BPM really is.

Brief description of BPM

BPM is a management technique that includes method and tools to support design, analysis, implementation, management and optimization of operational business processes. It emphasizes the use of IT to manage incremental process changes and improve business efficiency, effectiveness and agility.

Those business process management includes:
- work flow management
- business process modeling
- quality management and measurement
- change management
- tools for standardizing business processes
- process monitoring and analytics

Things to be considered on implementing BPM project

BPM technique covers all aspects of business but many firms misunderstood it as a technique that only emphasizes on using IT to manage the incremental changes in business processes. Although IT takes an important role in BPM project, organizations should not just rely on IT as BPM is not all about IT.

The main reason for BPM project failure is firms tend to heavily invest on IT without acknowledging their true business problems. Those companies invest large amount of money on purchasing IT software which turnout fail to align with other businesses aspects like the business objective, organizational culture, project timescale, etc. IT should only be the BPM enabler but not the driver.

If firms want to carry out BPM project, they should define clearly what is the project scope and objective. Without a clear scope, firms may implement IT software that cannot address business problems and hence suffer loss. With a clear scope, firms can have a better control over the project and prevent over-budget. Like Nexus Bank, it chose the right BPM suite and define a clear vision on what process needed to be change and how to be changed. Hence achieve a big succeed, which is able to manage over 1 million credit card accounts without increase in staff by 50%.

Select the most suitable IT software to align with firms' business strategy and have more understanding on how to use the software are also very important in BPM project. Thus firms should conduct feasibility study on implementing the BPM project to estimate the benefits and cost of implementing the project. This can help firms to adjust the project objective and hence improve the business. Casual Male Retail Group, an top man's clothing retailer in America, carried out a detailed study on how new system will affect the business before implementation. Eventually, the improved process saved Casual Male $1.3 million annually.

Firms should provide training and educate their staff about the new business processes as BPM change the ways people work. People always resist changes and turnout result in delay of BPM project. Therefore if businesses want to implement BPM solution, they should have plans on how to manage the staff and provide enough training to them to help them fit in the new business process.

Conclusion

To conclude, business need to define clear project objective, conduct a detailed research and provide enough training to staff in order to achieve satisfactory result in implementing BMP project. Otherwise, firms may halt the project before completion due to over-budget and other managerial problems.

W4 - Strategic Alliance Model

Source / Reference:
1)  "Strategic Alignment: Analysis of Perspective" by Preston Coleman and Raymond Papp 2006

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

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

In my opinion, there is no single one best alignment perspective. Different organizations may find different alignment perspectives align their problems better than others. Which perspective is the best depends on the nature of industry and the environment changes that the industries are facing. Moreover, if there is a single best alignment perspective, why all kinds of alignments are being used (figure 1) and fusion of perspectives arise? If there is really a best perspective, people should have abandoned all other perspectives and follow the only best perspective. That implies organizations cannot determine which perspective is the best one and they keep changing the use of alignment perspective from time to time in order to improve their business.

figure 1: alignment perspective by industry

The Strategic Alignment Model (SAM) is composed of four quadrants, each of them consists of three components. It concerns about both the scopes of business and the information technology of organization. The four quadrants are business strategy, organizational infrastructure, IT strategy and IT infrastructure (figure 2). It includes both the internal and external aspects of business and IT. An alignment perspective is combination of 3 of the quadrants form the SAM. It describes the strength, weakest-link and the area that will be affected after re-alignment of the organization. Since it only concerns one weak area of the organization, if the firm has more than one weak aspect, at least one of these aspects will be ignore and may lead to vital error or even failure.

figure 2: strategic alignment model

Nowadays, most of the organizations and industries integrate business and IT to eliminate competitive disadvantages and create competitive advantages to strengthen their market position and enlarge their market shares. Since all four quadrants of SAM concerns about different aspects of the organization and no over-lapped aspects between them, people should not ignore any quadrants, all of the quadrants are very important to an organization.

Furthermore, most of the organizations not concern on only one type of product or service. Most of them provides more than one service and product, which blur the boundary between nature of industry and make classification of type of industry becomes very hard. 

Like Amazon, it provides different kinds of services. As a world-wide online retailer, it sells books, furniture, toys and even digital music. The nature of market of these products are indeed very different, therefore the problems it is facing may also very broad. Thus the organization cannot use only one alignment perspective to align their problems. 

For example, if Amazon use only competitive potential to expand its business and ignore it's IT infrastructure, it may develop some online shopping platform like the platform for selling digital music which is not convenient to use and cannot address the needs of customers, this may lead to business loss. On the other hand, if it just follow the service level, focus on IT and ignore the business strategy, the business will fail for sure as business scopes like competitors and services are ignored.

Environment of business and nature of the industry are mutually effect each other, this govern the use of strategic alignment too. For example, a printing firm have been using strategy execution to align with their business as it only focus on repeatable work and paper work. Since IT keeps developing, even it does not really require much IT, it should also focus on the IT strategy such as what are the latest printing and packing technology, to keep pace with their competitors in order to survive in the market and make business more effective by analyzing the business related technology.


To conclude, there is no a single best strategic alignment, it just depends on the business nature and how the environment is changing.