Adjust Your Audio: A Narrated Slideshow Please Adjust

Adjust Your Audiothis Is A Narrated Slide Show Please Adjust Your Aud

Adjust your audio This is a narrated slide show. Please adjust your audio so you can hear the lecture. If you have problems hearing the narration on any slide show please let me know. © 2016 John Wiley & Sons, Inc. 1 Chapter 5 IT and Business Transformation 2 Sloan Valve What was wrong with their Product Development Process? What did Sloan do? What is NPD? Did it help? Are all enterprise system implementations this successful? © 2016 John Wiley & Sons, Inc. 3 Complex and slow; 16 units had to coordinate; took 18-24 months to bring new products to market; >50% of ideas didn’t make it; nobody accountable New Product Development: Adoption of ERP. Process: team included members across the firm; proposed new process of (1) ideation (2) business case development, (3) project portfolio management, (4) product development, (5) product/process validation, (6) launch Results: Time to market reduced to 12 months, poor ideas filtered out early; better access to info and customer feedback; better accountability Other firms: No, some failed, such as: Overstock.com, Levi Strauss, Avis Europe 3 Silo (Functional) Perspective Specialized functions (sales, accounting, production, etc. Advantages: Allows optimization of expertise. Group like functions together for transfer of knowledge. Disadvantages: Sub-optimization (reinvent wheel; gaps in communication; bureaucracy) Tend to lose sight of overall organizational objectives. Executive Offices CEO President Operations Marketing Accounting Finance Administration © 2016 John Wiley & Sons, Inc. The Process Perspective Examples of processes: Fulfill customer orders Manufacturing, planning, execution Procurement (see below) Processes have: Beginning and an end Inputs and outputs A process to convert inputs into outputs Metrics to measure effectiveness They cross functions © 2016 John Wiley & Sons, Inc. How to Manage a Process Identify the customers of processes (who receives the output?) Identify the customers’ requirements (how do we judge success?) Clarify the value each process adds to the organizational goals Share this perspective so the organization itself becomes more process focused © 2016 John Wiley & Sons, Inc. 7 Comparison of Silo Perspective and Business Process Perspective Silo Perspective Business Process Perspective Definition Self-contained functional units such as marketing, operations, finance Interrelated, sequential set of activities and tasks that turns inputs into outputs Focus Functional Cross-functional Goal Accomplishment Optimizes on functional goals, which might be suboptimal for the organization Optimizes on organizational goals, or the “big picture†Benefits Highlighting and developing core competencies; functional efficiencies Avoiding work duplication and cross-functional communication gaps; organizational effectiveness Problems Redundancy of information throughout the organization; cross-functional inefficiencies; communication problems Difficult to find knowledgeable generalists; sophisticated software is needed 8 What do you do when things change? Dynamic and agile processes Examples: Agile: Autos are built with wires and space for options Dynamic: Call centers route incoming or even outgoing calls to available locations and agents Software defined architectures (see chapter 6) IT is required to pull this off well © 2016 John Wiley & Sons, Inc. 9 Techniques to Transform a Static Process Radical process redesign Also known as business process reengineering Incremental, continuous process improvement Including total quality management (TQM) and Six Sigma © 2016 John Wiley & Sons, Inc. 10 Incremental Change Total Quality Management Often results in favorable reactions from personnel Improvements are owned and controlled Less threatening change Six-Sigma is one popular approach to TQM Developed at Motorola Institutionalized at GE for “near-perfect products†Generally regarded as 3.4 defects per million opportunities for defect (6 std dev from mean) © 2016 John Wiley & Sons, Inc. Improve-ment Time Radical Change Business Process Reengineering (BPR) Sets aggressive improvement goals. Goal is to make a rapid, breakthrough impact on key metrics in a short amount of time. Greater resistance by personnel. Use only when radical change is needed. © 2016 John Wiley & Sons, Inc. Improve-ment Time Comparing the Two © 2016 John Wiley & Sons, Inc. 13 Improve-ment Key Aspects of Radical Change Approaches Need for quick, major change Thinking from a cross-functional process perspective Challenge to old assumptions Networked (cross-functional organization) Empowerment of individuals in the process Measurement of success via metrics tied to business goals and effectiveness of new processes © 2016 John Wiley & Sons, Inc. 14 Workflow and Mapping Processes Workflow diagrams show a picture of the sequence and detail of each process step Objective is to understand and communicate the dimensions of the process Over 200 products are available to do this High-level overview chart plus detailed flow diagram of the process © 2016 John Wiley & Sons, Inc. 15 BPM Information systems tools used to enable information flow within and between processes. Comprehensive, enterprise software packages. Most frequently discussed: ERP (Enterprise Resource Planning), CRM (Customer Relationship Management), SCM (Supply Chain Management) Designed to manage the potentially hundreds of systems throughout a large organization. SAP, Oracle, Peoplesoft are the most widely used ERP software packages in large organizations. © 2016 John Wiley & Sons, Inc. BPM Architecture © 2016 John Wiley & Sons, Inc. 17 Standardization vs Integration Business Process Standardization Low High Business Process Integration High Single face to customers and suppliers but standards not enforced internally High needs for reliability, predictability, and sharing; single view of process Low Decentralized design; business units decide how to meet customer needs Tasks are done the same way across units, but there is little need for business units to interact Source: J. Ross “Forget Strategy: Focus IT on your Operating Model,†MIT Center for Information Systems Research Briefing (December 2005) © 2016 John Wiley & Sons, Inc. 18 Enterprise Systems (Enterprise Resource Planning or ERP) Seamlessly integrate information flows throughout the company. Reflect industry “best†practices. Need to be integrated with existing hardware, OSs, databases, and telecommunications. Some assembly (customization) is required The systems evolve to fit the needs of the diverse marketplace. © 2016 John Wiley & Sons, Inc. ERP Advantages and Disadvantages Advantages Disadvantages Represent “best practices†Modules throughout the organization communicate with each other Enable centralized decision-making Eliminate redundant data entry Enable standardized procedures in different locations Enormous amount of work Require redesign of business practices for maximum benefit Require customization if special features are needed Very high cost Sold as a suite, not individual modules Requires extensive training High risk of failure © 2016 John Wiley & Sons, Inc. ERP II Makes information available to external stakeholders too Enables e-business applications Integrates into the cloud Includes ERP plus other functions (see Figure 5.8) © 2016 John Wiley & Sons, Inc. 21 ERP and ERP II Functions © 2016 John Wiley & Sons, Inc. 22 Customer Relationship Management Customer Relationship Management (CRM) is a natural extension of applying the value chain model to customers. CRM includes many management activities performed to obtain, enhance relationships with, and retain customers. CRM can lead to better customer service, which leads to a competitive advantage for the business. 23 © 2016 John Wiley & Sons, Inc. 23 CRM Common systems are: Oracle SAP Salesforce.com (web-based cloud system) Oracle and SAP integrate into their ERP systems © 2016 John Wiley & Sons, Inc. 24 Supply Chain Management (SCM) An enterprise system that manages the integrated supply chain Translation: processes are linked across companies The single network optimizes costs and opportunities for all companies in the supply chain Every part of the supply chain has the latest information about sales expected and inventories from source materials at all stages Bullwhip effect occurs when the supplier at each stage adds a small “buffer†for it’s suppliers in case demand is higher than expected © 2016 John Wiley & Sons, Inc. 25 Difficulties in Integrated Supply Chains Information integration requires agreement of what information to share, how to share it, and the authority to view it. Trust must be established Planning must be synchronized carefully Workflow must be coordinated between partners to determine what to do with the information they obtain © 2016 John Wiley & Sons, Inc. 26 Advantages and Disadvantages of Enterprise Systems © 2016 John Wiley & Sons, Inc. 27 The Adoption Decision The enterprise system sometimes should drive business process redesign when: Just starting out. Organizational processes are not relied upon for strategic advantage. Current systems are in crisis. It is inappropriate for the enterprise system to drive business process redesign when: Changing an organization’s processes that are relied upon for strategic advantage. The package does not fit the organization. There is a lack of top management support. © 2016 John Wiley & Sons, Inc. Summary After you have listened to this lecture and read Chapter 5 of your text Go to Discussion Board 6 and answer the discussion prompt Finally complete Quiz 5 © 2016 John Wiley & Sons, Inc.

Paper For Above instruction

The integration of information technology (IT) into business processes has profoundly transformed organizational operations and strategic capabilities. This paper explores how IT drives business transformation, focusing on the evolution from siloed functional perspectives to integrated enterprise systems like Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), and Supply Chain Management (SCM). It also examines the challenges and best practices in implementing these systems to enhance organizational efficiency, agility, and competitiveness.

Initially, many organizations operated with siloed structures, where functional units such as marketing, finance, operations, and sales worked independently. While this structure allowed specialization and optimization within individual functions, it often led to redundancies, communication breakdowns, and a lack of coordination that hindered overall organizational objectives. The silo perspective emphasizes dedicated expertise but suffers from sub-optimization and inefficiencies in cross-functional processes. As organizations recognized these limitations, a shift toward process-oriented thinking gained prominence. This transition promotes viewing business activities as interconnected processes with defined inputs, outputs, and metrics for effectiveness, fostering improved collaboration and organizational agility.

The process perspective offers a systemic approach, focusing on end-to-end workflows such as fulfilling customer orders, manufacturing, procurement, and product development. Managing these processes involves identifying process owners, understanding customer requirements, and measuring process performance to align activities with organizational goals effectively. Process mapping and workflow diagrams serve as vital tools for visualizing and analyzing these workflows to identify bottlenecks and inefficiencies. Technology plays a crucial role here, enabling process automation and integration through comprehensive software systems like ERP, CRM, and SCM, which serve to streamline operations and facilitate real-time information sharing across functions.

The adoption of enterprise systems, particularly ERP, represents a significant technological advancement in integrating organizational data and processes. ERP systems, such as SAP or Oracle, aim to provide a unified platform that consolidates information flows across departments, aligning operations with best industry practices. The benefits of ERP include eliminating redundant data entry, enhancing decision-making, and enforcing standardized procedures, thereby increasing organizational efficiency. However, implementing ERP is complex and costly, requiring extensive planning, customization, and training. High failure rates have been reported, often due to inadequate change management or misalignment with organizational needs, emphasizing the necessity of top management support and comprehensive planning.

Beyond ERP, ERPII expands the scope by enabling external stakeholder access and integrating additional functions such as e-business capabilities and cloud-based services. CRM systems extend organizational focus to customer interactions, aiming to improve customer satisfaction and loyalty through targeted management activities. Popular CRM solutions like Salesforce.com or SAP CRM help organizations obtain insights into customer preferences and behaviors, fostering competitive advantage. Similarly, SCM systems facilitate the coordination of supply chain activities across multiple organizations, optimizing costs, inventory levels, and response times. Effective SCM implementation requires trust, shared information, and synchronized planning among supply chain partners, which often poses significant challenges due to information sharing agreements and coordination complexities.

Nevertheless, the transition to integrated enterprise systems is not without challenges. Effective implementation demands careful change management, clear business process redesign where necessary, and strong leadership commitment. When organizational processes lack strategic importance, deploying enterprise systems can be a catalyst for transformation. Conversely, when processes are core to competitive advantage, organizations must critically assess whether to adapt their processes to fit the system or vice versa. Resistance from personnel, high costs, and technological complexities are common hurdles that organizations must navigate.

In conclusion, IT-enabled business transformation hinges on aligning technological capabilities with organizational goals. The evolution from siloed functions to integrated enterprise systems enables organizations to operate more efficiently, respond swiftly to market changes, and develop closer relationships with customers and suppliers. Success in this journey depends on strategic planning, stakeholder engagement, continuous process improvement, and leveraging technological innovations prudently. As the digital landscape continues to evolve, organizations that effectively harness IT for business transformation will secure a sustainable competitive advantage in the dynamic global marketplace.

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