Week 11 - Redesign Principles (2)

Reference:

1.     "The compelling case for insourcing" 2008
http://www.mpmagazine.com/xq/asp/txtSearch.Information+Techonology/exactphrase.1/sid.0/articleid.0EE11681-6505-4BF0-892C-B2A060BB54BE/qx/display.htm

2.     Hammer, M., & Champy, J. 1993. Reengineering the corporation: A manifesto for business revolution. New York: Harper Business.

3.     "Focusing the Power of Six Sigma in the Healthcare Insurance Industry:  Lowering Medical Costs while Improving Patient Service and Outcomes" by Leslie Behnke & Forrest Breyfogl 2004

4.     http://www.dell.com/us/p/?scat=root&cs=19&s=dhs

Introduction

In Lecture 11, the remaining parts of business process redesign principles (principle 8,9,10) have been discussed. With the support of business cases, the following will discuss about the real life implementation examples of the principle of analyze and synthesize, principle of Connect, Collect & Create and principle of. Personalize.

1.     Analyze and Synthesize

This principle allows businesses to develop better outcome by flooding the subordinates with sufficient information and knowledge.  To follow this redesign principle, the company can provide what-if capabilities to analyze decision choices, provide slice and dice data analysis capabilities that detect patterns and provide intelligent integration capabilities across multiple information sources.

2.     Connect, Collect & Create

This principle means create new knowledge by connect people and collecting information.  Businesses are required to define procedures for collecting the information and create physical and virtual storage for storing the knowledge.

Example:

HSBC can be regarded as the company to achieve this principle.  In recruiting process, HSBC offers questionnaire for all interview candidate after the completion of interview and ask for improvement on the overall procedures.  In Investment context, HSBC requires the investors to fill in basic information and questionnaire about the personal investment mindset for further analysis.  This helps HSBC to generate the investing behavior and provide suitable advices or measures to different groups of investors by segmentation.

3.     Personalize

This principle is to encourage businesses to understand specific humans’ wants and provide the personalized service to customers.
This principle can be achieved by learning the customers’ preferences though daily activity, adjusting the business rules according to the personal profiles, using collaborative filtering techniques and keeping track on the buying processes.

Examples:

Dell can be regarded as an example in fulfilling the principle of personalizes. Instead of selling all the computers in a same package, they allow customers to personalize their computer.  Customers can select the components according their different needs and allow different combination.

 

To conclude, these successful business cases revealed that the redesign principles can really be applied in real-life as these principles have supported the basic business operation in different processes.

Week 10 - Redesign principles (1)

Reference:

1.        Hammer, M., & Champy, J. 1993. Reengineering the corporation: A manifesto for business revolution. New York: Harper Business.

2.        Kavanagh, John, Challenge for Company Culture - Business Reengineering: The Need for Totally New Thinking, The Financial Times, March 23, 1993, Survey of Information and Communications Technology (19); Pg. IX.

In Lecture 10, the business process redesign principles have been introduced.  In the following, I will discuss about the real life implementation example of following the redesign principles.

Redesign Principles

Example 1: HSBC

Principle 1: Lose wait

To reduce the average waiting time for high demand of banking operations, HSBC has segmented several accounts such as basic account, HSBC advance and HSBC premier.  The different queues offer different services.  Since the complexity of the operations might be different for different types of account, HSBC can then allocate optimum resources to different counter according to the demand.  This can increase the efficiency and reduce waiting time.

Principle 4: Synchronize

Due to the trend of online banking, HSBC develops well-coordinate online platform to cope with the demand of the customers.  Customers could check their accounts thorough the web.  The data is synchronized as the information is retrieve in the centralize database.  Customers can check the immediate updates at anytime conveniently. In recent years, HSBC also introduced the smart phone apps for customers to check the accounts with their smart phones.

Principle 7: Sensitize

HSBC focuses a lot in customer satisfaction and continue improvement.  Therefore, after the fund/stock transactions are completed, the customer service will provide a feedback opportunity for customers to voice out their comments on their services.  The follow up action has increased the customers’ satisfaction and loyalty.

Principle 2: Orchestrate

Since the security of a bank of paramount importance, HSBC needs a experience security team so guard the branches. As HSBC does not specialize in training and developing the security team, to reduce the opportunity cost, HSBC outsources the security service to the security company.  This allows HSBC to allocate resources to their main business.

Example 2: NIKE

 

Principle 3: Mass Customize

To follow the trend of creativity and unique customer demand, NIKE has organized a DIY(do it yourself) campaign to let customers to design their own shoes.  Through the use of the computer technology, NIKE allows customers to select the desire materials, color and design at NIKEiD Studio.

Principle 5: Digitize and Propagate

Apart from visiting the NIKEiD Studio to design own shoes, Nike also provide a online platform for design and order.  Customers can register and create the desire shoe at home, and order through the web.  The design will sent to the centralize database for production.  The digitalization increase the convenience and increase the customers satisfaction.

Week 7 - BPR Methodologies

Reference:

Davenport, T. and Short, J. (1990), ``The new industrial engineering: information technology and

business process redesign'', Sloan Management Review, Vol. 31 No. 4, pp. 11-27.

Grover, V., Jeong, S., Kettinger, W. and Teng, J. (1995), ``The implementation of business process

reengineering'', Journal of Management Information Systems, Vol. 12 No. 1, pp. 109-44

In this lecture, the BPR methodologies have been introduced.  It is a set of guidelines that enable an analyst to derive ways for problem solving.  They are used as an enabler for automation by using Information Technology and a tool for creating a major change in business process.

BPR methodologies are divided into 5 stages and they are:

1.       Visioning

2.       Mobilization

3.       Process Redesign

4.       Implementation

5.       Monitoring and maintaining

Each phrase has a significant contribution to the implementation of BPR.

Phrase 1: Visioning

It is the first phrase and it is the most important phrase as it defines the objective and direction of the business.  It helps to identify the current business problems and reveal the inefficiency of different processes.  It considers the current problem from a wide perspective, from internal to external.   For example, duplication of documentation and delay completion can be the problem of internal.  While slow-response rate and dissatisfaction form customers can be external problem.

Phrase 2: Mobilization

After defining the ideal objective of the business and discovered the current business problems, it is needed to gather the team members and the top management in order to undergo the project.  Sufficient number of IT people is needed to ensure more information for the redesign process and ensure the project can corporate with IT infrastructure as planned.

Phrase 3: Process Redesign

It is the phrase to analyze the existing “As-Is” process and select the best “To-Be” design.  Through scoping, modeling, analysis, redesign and integration, the process knowledge will be known and the advantages of the “As-Is” model can be extracted and the problematic parts can be removed.  As a result, the “To-Be” model can be proposed after the analysis in the five aspects.

Phrase 4: Implementation

In this phrase, it is important to ensure the IT infrastructure to meet the “To-Be” model requirement.

Phrase 5: Monitoring and Maintaining

In this phrase, it is mostly about the monitoring work to see if the processes under the new redesign run well or not.  Some processes might be modified slightly when it is necessary.

Importance of the 5 phrases

BPR helps large businesses to integrate their fragmented processes, reduce the switching cost between the departments and increase the efficiency.  The 5 phrases present an important role to ensure the benefits come true.

Video-Sharing:

http://www.youtube.com/user/Cordysvideo?v=_369sK3DPYM

Week 5 - Business Process Re-engineering BPR

Reference:

1.          http://www.12manage.com/methods_bpr.html

2.          Lowell Greenberg,(1996), “BPR Introductory Article”, http://earthrenewal.org/bpr.htm

Subject: IT – a necessary tools for BPR implementation?

In Lecture 5, we have learned the basics of BPR, the definition, rationale, properties.  All these are really basic information of BPR, which can be found on web or reading extra materials. After the lecture, it gives me an insight that BPR is quite similar to the stuffs in business studies, where its objective is to enhance the efficiency, reduce cost, and add-value to the business products and services.  After a deep thought, the lecture has brought me a question, is IT a must in BPR? And to what extent does IT help?

Actually, I have found that most of the cases of BPR are with the assistance of IT, as this can be carry out holistically among all the business process.  However, there are still some cases which IT is not involved, while the change is still call BPR.   

Therefore, IT is not a must in BPR. 

 

For example, use a queuing system as an example.  Long time ago, Banks used one queue to handle all customers’ queries and requests, which mean all counters serve one queue. Since the time spent on each operation is uncertain, the average waiting time cannot be estimated and banks received many complaints for long waiting time. With Customer dissatisfaction, the banks change the queuing structure, where they divided the counters into different functions, such as normal class and advanced class.  This helps to reduce the waiting time for privileges, who have higher time cost.  The reengineering process does not incorporate with IT equipments, while it still can serve the purpose of BPR. 

However, with advanced technology nowadays, BPR which incorporated with IT can streamline the whole business process.  For example, the invoice system in a company may involve many sub-processes, such as backup, verification, cost analysis.  Since each process needs some time for process the invoice, one have to wait the other process before it can process the invoice.  If backing up the invoice needs 2 days, verification needs 4 days, cost analysis needs 4 days, then the total processing time will be 10 working days.  

(AS-IS)

As the work actually do not require such a long time, the 10 working days mainly involve the waiting time between each process.  Therefore, to carry out BPR by using an enterprise resource planning or database, the processes can work at the same time so that the time can be greatly reduced and reduce the probability in losing customers With the database and ERP assistance, the efficiency can be enhanced, the operating cost will be lowered, and fewer mistakes due to inconsistency during the processing.

(To-Be) 

Week 4 - Strategic Alignment Model

Reference:

1)      http://gupea.ub.gu.se/bitstream/2077/10496/1/gupea_2077_10496_1.pdf (p.21-22)

2)      http://sergaygroup.com/Smart-Talk/Strategic-Alignment.html

3)      http://www.ibimapublishing.com/journals/JOOIM/2011/704367/704367.pdf

In lecture 4, Helen mainly discuss about some alignment strategies which help to interwoven IT and business process.  It is known that nowadays peoples’ views are changing, and there are people think that IT/IS strategies can helps to improve the business operation and can be used as a driver in business strategy. 

There is one main question developed after the lesson, that is which alignment strategy in SAM model is the best? And why?

In my opinion, competitive potential model is the best because the business performance is assessed by business leadership such as market share, growth and new product introduction, where these figures are more objective.

In this competitive world, all enterprises need some business strategies to increase their profit and gain customers’ obedience. They can only survive if they can operate under low cost and high demands of their products.  However, only focusing on business strategies is insufficient, as a good business strategy can be developed with assistance in IT strategy.  

In 21^st Century, computing technology has become matured, and the use of IT to support the main business is more ubiquitous.  By adopting the competitive potential model, a business can merge the contribution of IT capabilities with the business strategies.  

I prefer this model as it focuses on the outcome of business leadership, which I think it is of the paramount importance in doing business.  Business leadership can be revealed by the market share and growth, where all these are indirectly showing the business performance in all aspects.  Business growth meaning customer satisfaction as all sales revenue came from customers.  If customers do not satisfy the services or products, they won't come again.  Therefore I think this model perform the outcome of service level model as well.  

To conclude, market share and growth of a business is a good measurer of how well the businesses are doing.  And as business strategies are always the pivot of a business, IT strategies are just to streamline the final business strategies.  Therefore, I think competitive potential model is the best.

Week 3 - Business Strategy

In lecture 3, Helen has taught us about the business strategy, which entails specifying the organization's mission, vision and objectives.  There are two famous analysis methods that are frequently used by big companies, such as LG, Addidas. They are PEST and SWOT analysis.  I am impressed in the lecture as i have learned PEST and SWOT in my secondary school, the materials reinforce my knowledge on them.

PEST analysis is adopted to analyze the impact of the external business environment in the early stage of strategic thinking.  PEST is of paramount importance in beginning the marketing process.  PEST stands for Political, Economic, Social and Technology.  Political  factors include areas such as tax policy, employment laws,  trade restrictions and political stability. The economic factors are the economic growth, interest rates, exchange rates and inflation rate. Social factors often look at the cultural aspects. The technological factors includes degree of automation and the rate of technological change.

SWOT analysis stands for Strength, Weakness, Opportunity, Threat.  It analysis the business from inside to outside, it is a  holistic analysis.  Business likes to adopt SWOT analysis as it tells the present situation of the business.  It can guide the business to formulate specific policies for the marketing process.

In my opinion, both PEST and SWOT are very useful to the business when making some marketing decision as they can analyze the internal and external environment and gives a clear situation and implication to the business.  Apart from the usefulness of these analysis, they are also relatively easy to understand.  These analysis have been taught in Business Studies in secondary school, it is therefore I am familiar with them.  Moreover, the analysis itself is clear and easy to follow, so this topic raise my interest in learning in further.

In the lecture, I have learned much more deeper on the two analysis methods.  I have learned the importance of the two methods and their usability.  Even though PEST and SWOT have some similar characteristic, they are still some differences in their focus part.  For instant,  PEST focus mainly on external environment, while SWOT focus mainly on internal environment and micro environment.  Therefore, both of them should be adopted to have a holistic analysis over the business for better decision to be made.