Chapter 2 - Organizational Strategy, Competitive Advantage - PDF

Chapter 2 Organizational Strategy, Competitive Advantage, and Information Systems Major subjects 1. Business Processes BPR (Business Process Reengineering), BPI(Business Process Improvement) BPM(Business Process Management) 2. Competitive advantage and Strategic IS 5 Competitiv...

Chapter 2 Organizational Strategy, Competitive Advantage, and Information Systems Major subjects 1. Business Processes BPR (Business Process Reengineering), BPI(Business Process Improvement) BPM(Business Process Management) 2. Competitive advantage and Strategic IS 5 Competitive Forces Model, Value Chain 3 Generic Strategy Strategic Alignment Copyright ©2020 John Wiley & Sons, Inc. 2 2.1 Business Processes A business process is: an ongoing collection of related activities that create a product or service of value to the organization, its business partners, and/or its customers. Comprised of three elements: Inputs Resources Outputs Efficiency vs. Effectiveness Copyright ©2020 John Wiley & Sons, Inc. 3  Input Processing Output Capturing Transforma- Transferring and tion process transformed assembling converts input elements to elements that into output their ultimate enter the destination system to be processed Copyright ©2020 John Wiley & Sons, Inc. 4 Copyright ©2020 John Wiley & Sons, Inc. 5  Measuring IT Success Efficiency Minimizes cost, time, and Reduction of errors Effectiveness Supports business strategies Enables business processes Increases customer and business value Completion of business tasks Copyright ©2020 John Wiley & Sons, Inc. 6 Figure 2.1 Business process for ordering an e-ticket from an airline website. Copyright ©2020 John Wiley & Sons, Inc. 7 Table 2.1: Examples of Business Processes (1 of 3) Copyright ©2020 John Wiley & Sons, Inc. 8 Table 2.1: Examples of Business Processes (2 of 3) Copyright ©2020 John Wiley & Sons, Inc. 9 Purchasing Process Purchasing Department Treasure Supplier Warehouse Copyright ©2020 John Wiley & Sons, Inc. 10 Problem of Functional Organization: Processes are cross-functional. Ex) New product development Responsibility No single functional area is responsible Coordination It needs to be executed in a coordinated and collaborative way Copyright ©2020 John Wiley & Sons, Inc. 11  Information Technology The order management process consists of several business processes and crosses the boundaries of traditional business functions. Copyright ©2020 John Wiley & Sons, Inc. 12  Cross-Functional Enterprise Applications The new product development process in a manufacturing company. This is an example of a business process that must be supported by cross-functional systems that cross the boundaries of several business functions.  Information Systems & Business Processes IS’s vital role in three areas of business processes – Executing the process – Capturing and storing process data – Monitoring process performance  Executing the process IS’s help Execute the Process by: – Informing employees when it is time to complete a task – Providing required data – Providing a means to complete the task  Capturing and storing process data Processes generate data – Dates, times, product numbers, quantities, prices, addresses, names, employee actions IS’s capture & store process data (transaction data) Capturing & storing data provides immediate, ‘real time’ feedback  Monitoring process performance IS evaluates information to determine how well a process is being executed Evaluations occur at two levels – Process level – Instance level Monitoring identifies problems for process improvement 2.2 BPI(Business Process Improvement), BPR(Business Process Reengineering), and BPM(Business Process Management) Excellence in Executing Business Processes Customer Satisfaction Cost Reduction Cycle and fulfillment time reduction Quality Differentiation Productivity Copyright ©2020 John Wiley & Sons, Inc. 18 Business Process Reengineering (BPR) Michael Hammer & James Champy, 1993, Reengineering the Corporation BPR A radical redesign of an organization’s business processes to increase productivity and profitability Examines business processes with a “clean slate” approach Copyright ©2020 John Wiley & Sons, Inc. 19 Business Process Improvement (BPI) BPI An incremental approach to move an organization toward business process centered operations Focuses on reducing variation in process outputs by identifying the underlying cause of the variation Six Sigma is a popular methodology for BPI Five basic phases of successful BPI Define->Measure->Analyze->Improve->Control Copyright ©2020 John Wiley & Sons, Inc. 20 BPR versus BPI Copyright ©2020 John Wiley & Sons, Inc. 21 Business Process Management (BPM) (1 of 2) A management system used to support continuous BPI initiatives for core business processes over time Important components of BPM: Process modeling Web-enabled technologies Business Activity Monitoring (BAM) Copyright ©2020 John Wiley & Sons, Inc. 22 Business Process Management (BPM) (2 of 2) Business Process Management Suite (BPMS) – An integrated set of applications used for BPM Emerging Trend of Social BPM – Technologies enabling employees to collaborate across functions internally and externally using social media tools Copyright ©2020 John Wiley & Sons, Inc. 23