Learning Objectives
- Explain what a business process is
- Perform business process modeling
- Discuss the impacts of technology on business processes
- Explain how business process improvement can be achieved with business process reengineering (BPR)
What Is a Process?
A process is series of steps or tasks required to achieve a specific goal.
A process may
- extend across many organization boundaries – production department request material, while accounting department pay vendors
- involve a large number of individuals –
- require many decisions and actions along the way – business process can usually be decomposed into several tasks, aka subprocesses.
Process Modeling
- Process modeling is the mapping of processes and subprocesses used in an organization or division.
- In process modeling, we need to expand the steps to identify when they are occurring and which decisions are involved.
- Helps understand the various processes that occur at different levels in organizations and how they interrelate
Business Process Modeling Tools
There are many process modeling tools and software available to help analysts describe business processes and create business process models or diagrams.
- Traditional process modeling languages
- Object-oriented modeling languages
- Dynamic process modeling languages
- Process integration languages
Technology and Process
- Technologies play an ever increasing role in how business processes are performed and modified.
- Technology can also be a barrier or constraint to business process improvement. – “It might be more efficient to input data a certain way, but the system will not let you do it.”
Process Improvement
Once business processes are properly modeled, they can be analyzed for improvement.
Improving business processes can be labeled either business process reengineering (BPR) or business process improvement (BPI) depending on the extent of change necessary.
- BRP involves the redesign of business processes to improve how work is done across many functions within the organization.
- Business processes are inherently cross-functional
- BPR seeks to break down organizational silos by redesigning business processes
- BPI, on the other hand, involves the redesign of a business process that is simple enough that is can be done within one function of the business or without significantly involving other business functionality.
BPR or BPI involves Fundamental Rethinking – Why does the firm do things a certain way?
This is done to obtain dramatic improvements in performance.
There are four key areas for business process improvement:
- effectiveness
- efficiency
- internal control
- compliance
In the end, managers improving business processes need to ask themselves key questions such as follow:
- What are our key business processes?
- Do we have to execute each process?
- How can we use information technology to perform these processes in better ways?
- And, what are the likely impacts of the business process redesign?
Levels of Change
In Chapter 4, we introduced the idea that information technology can be implemented in organizations to create competitive advantages. New information technology can have diffing effects on organizations.
One way to categorize these impacts is whether they represent changes that:
- Automate (First Order)
- Technology performs process more efficiently
- Informate (Second Order)
- Technology informs people
- Transform (Third Order)
- Fundamental change of process
