Managing Business Activities to Achieve Results - Research Paper Example

MANAGING BUSINESS ACTIVITIES TO ACHIEVE RESULTS Business process refers to a set of activities which involves utilization of resources to produce a specific output for the customer (Fields, 2007; Hammer and Champy, 1993). Various business processes define the patterns, which are implemented to perform work across hierarchies and departments in the organisation ( Sethi and King , 2003). Business process, mainly, focuses on research, which guides executives and managers to improve the overall performance and outcome of an organization. In the paper, the proposal to implement software solution for customer ordering and sales reporting at a fairly small business organization U Win Ltd. has been discussed. Following points have been discussed in the proposal - 1. Business functions and processes ( SMART Processes) 2. Business process models 3. Plan of activities 4. Quality Systems 5. Health & Safety TABLE OF CONTENTS 1. Introduction 4 2. Technique to Align Business Processes 6 3. Business Process Principles 6 4. Business Process Models 7 5. Business Processes Objectives and the Quality Gateway 8 6. Plan of Activities 10 7. Breakdown and Work Authorization Systems 11 8. Duration and Implementation Cost of BPR 12 9. Quality Systems 14 10. Improve Process Continuously 14 11. Health & Safety (H&S) 15 12. Conclusion 16 13. Recommendations 17 14. References 18 1. Introduction Davenport (1993a) defined business process as the set of structured activities, which are designed specifically to generate a specific output for the market, or the customer. The process which consists of ordered work activities have specified start and end, and well defined inputs are intended to generate output, defining the scope and structure of process . Process in an organisation is the asset which is like people, information and facilities. Processes are special vehicles, which synchronizes with other aspects of change. The organization change framework involves processes which are linked to changes. These processes are directly linked to external business reasons for the existence and processes can be measured in terms of business performance. Andrews defined strategy as “the set of purpose, objectives, goals, policies and plans which are implemented for achieving goals in the way to define business of the company or the kind of company where it is to be.” Hammer and Champy(1993) explained: 1. Reengineering - As a fundamental rethinking and change in design for achieving dramatic improvement in cost, quality, speed and service. 2. Process - It is the set of activities which are designed to give a specific outcome for a customer. It also implies effectiveness of activities (Davenport, 1993). “U Win Ltd” Manufacture UPVC Window frames in a variety of colours and finishes. It is a fairly small UK based organisation comprising of 30 employees .15 employees are in the Manufacturing department , 5 in the accounts department, 5 in the sales department, 2 in the HR department, 2 in the IT department and the Managing Director. The Managing Director and the Board of Directors have become aware of the need to improve the efficiency of the customer ordering process and the sales reporting systems, and the they plan to implement a new computer system. 1.1 Interrelationships of Functions Business process management provides processes to ensure continuous growth in an organisation’s performance. It will reduce overall cost of customer ordering and sales reporting mechanism. At “U Win Ltd”, the new electronic system will deliver information effectively. Automated customer enquiry, customer history, deductions, invoices, purchase order and delivery verification will provides methodologies to provide typical customer service and resolve issues quickly. A number of projects have been designed for simplifying, reengineering, re-documenting and migrating software solution to modern platforms (Canfora and Cimitile, 1997; Canfora et al., 1999; Cimitile, 1997). 1.2 Mission The mission is to stimulate growth and get higher returns on investment through competitive marketing and superior service delivery. 1.3 Aim The aim is to easily monitor and coordinate the internal business activities. Business Processes transforms consumables resources and requirements into outcomes in response to trigger and events. 1.4 Objectives and Culture For radical changes the fundament tenets of process are re-examined to bring a renewal. Business process steps will be designed to enable employee to make informed decisions. The business process management needs a proper leadership and guidance. 1.5 Interrelationship with Processes Business process will involve three stages The inputs - Data will be entered by the customer such as customer enquiry, material enquiry etc. The processing - Processing refers to the data which goes through a number of stages taking records from related customer and accounting data. It is considered to be time and money consuming process. The outcome - The outcome refers to the delivery of desired result. 2. Technique to Align Business Processes with Organisational Objectives Organizations have to focus on implementing business process to resolve the key performance issues of the organisation and to streamline business process plan to encourage interdepartmental cooperation ( Day , 1994; Fields , 2007). Effective business processes helps employees to perform, takes in a more effective manners through knowledge and information sharing ( Fields ,2007).Business process analysis is vital for software implementation. 3. Business Process Principles The main principles of business process management are Performance driven change Stakeholder based change Business change decisions based on stakeholder criteria (customers, owners, staff, supplier, community and enterprise are stakeholders) Segmented business processes which are linked to synchronize changes Business process are holistically managed Process must inspire shared insight The process renewal should be done from outside in The process renewal initiative can be iterative having time box approach Business process change is made through people and the whole business change is not a destination -- it is journey 4. Business Process Models Organization changes are made, which involves structure and resources. Information is used, created, may be used and may be created for business process. Business process operations are designed to implement workflow. The business process behaviour focuses on workflow execution. Technology can be used for business process and external environment is included to improve the collaboration and communication with a third party. 4.1 The baseline model is ‘ As is ‘ ‘AS IS ‘model is created for actual process. In ‘AS IS ‘model the workflow is analysed and specific attention is paid to the cause and source of breakdown. The measure of performance covers the effectiveness, efficiency and adaptability. ‘AS IS’ model of business process reengineering is highly significant, which provides the organisation the method to analyse the existing processes and improve the current design of process. The main objectives are to identify the “disconnects” and “value added processes.” The time and cost of activity is calculated through activity based on costing and simulation. 4.2 The Intended Situation is ‘To-Be’ The model ‘To-Be ‘enables use of the technologies and process benchmark ideas. The opportunities to apply organisational trends through research are examined and it is combined into alterative approach, which is evaluated through business case review. The conceptual data model is developed and the design is reviewed for business event- to- outcome accountability. The To-Be model involves the development of stage for change, which includes the role and job description, training, organisation structure, reward recognition, policy changes related to human resources, team work and business and alignment of individual performance. 5. Business Processes Objectives and the Quality Gateway Software implementation is a form of change. Change can be anticipated, reactive change or a crisis. The four main strategic changes are environment, technology, business relationship and people. Small organisation is grouped as heterogeneous organizations which despite heterogeneity tend to point to a general characteristic. Small organisation provides highly specialized product or service ,and is geographically isolated. The organisation does not have clear competitors and its status vulnerable to changes in market trends. The organisation has direct information exchange with the customer. Small organisation has high dependency on single market or single product. Resource constraints may restrict can small organisation from pursuing cost leadership (Porter, 1985). SMART Objectives SMART objectives refer to the characteristics which are helpful in developing the desired outcome. In the desired software solution the smart objectives are Specific - Specific objectives are determined by answering to - What is being done? Why is it important? Who will do the work? When it is to be completed? How to compete it? The objectives are to automate the process of customer ordering process and the sales reporting systems. The second main objective is to reduce the overall cost on implementing change which will be completed through the coordination of technical and non-technical teams of the company. Measurable - The diagnostic questions are - how to measure the change ? The objectives of business process reengineering are measurable and it can be measured in term of ROI. Achievable - The project manager will have to assess the constraints , restrictions and set a time frame to assess if the project is achievable or not. Realistic - Resource and time allocation for the project will determine if the project objectives are realistic. Time - The time frame to achieve the objectives varies and it is determined when the deadline for project is determined. The methodology used by organizations to improve operational efficiency is called business process reengineering. The participants in the business process involves 1. Organisation structure 2. Organization population 3. The information of BPR 4. Technology 5. External environment TQM is designed for process improvement and business process orientation tools emphasize on assessing the inefficacies and drawbacks in business process to enable the organization to identify the areas, which requires performance improvement (Cook, 1996; Davenport, 1993b). 6. Plan of Activities Information management is the system where information exchange takes place between customer and service provider at an affordable cost. Information management also indicates interpersonal interaction which guarantees a steady flow of information. Cost is an important factor in determining efficiency ( Davenport , 1993) and process cost indicates the monetary resource which are used during the start and completion of business process .Reduced cost has impact on the quality of business process. Planning for reengineering- Planning is vital for implementing reengineering where the plan of action should give justification for change, prepare for activities, involve mandate for changing and create cross functional teams to handle the game plan for business process reengineering. The mission and vision statement of the company is formed and a yardstick to measure the progress of project is determined. The techniques used for project planning are Gantt Chart - These are Bar charts used for scheduling tasks and tracking progress. Critical Path Method - The Critical Path Method addressees the challenge of shutting down the regular system at the unit during the implementation process. As the project requires a series of facilities to allow a parallel path to ensure certain activities which are necessary for the business to run, are not stopped. The whole series of activities and a parallel set of tasks modelled and it is the CPM model. The steps of implementation CPM involves Defining the state of activities Determining the sequences Designing the network Estimating the time for completing the activities Identifying the Critical path Updating the CPM diagram PERT - The Program Evaluation and Review Technique (PERT) allows modelling and completion of activities on time. PERT aims to reduce the budget and time to complete the project; the stages of PERT planning involves: Identifying the activities - milestones Determining the sequence Constructing the network Estimating the time Determining the critical path Improve Process Continuously 7. Breakdown and Work Authorization Systems The reengineering process is implemented and it first meets resistance from current employee for which appropriate cultural change program is created. The plan should be about rapid implementation of information system and the IDEF model, which is created in “As- Is” mapped to the “To- Be” components to form the Work breakdown structure (WBS) - which involves automotive migration of the activities into process modelling environment. The latest business reengineering process involves software technologies which provide automated Work Beak Down activities to create process modelling environment. Business involves cross functional process, physical facilities ( tools, equipments, factories and offices), computing and communication technology( for information flow, human communication) and knowledge sharing and the human resource . Business process is the baseline for integrating deliveries Improving business performance Increasing customer satisfaction Integrating business solution Implementing new processes New measurement systems Managing process environment Implementing new mechanisms Developing new skills, HR support and incentives Improving staff behaviour and attitude The business performance indicates the key performance indicators and evaluates the requirement against the business owners. It applies to a number of reusable resources which supports transformation. Impact of Breakdown and Work Authorization Systems Quality process is based on the use of technology and robustness, which minimizes manual filling work and it is vital to business process activities, which renders processes efficiency and robustness .It reduces paperwork and encourages better use of employee (Keen, 1991). It serves as a strategic method to leverage process ( Venkatraman, 1994) but the mechanism should be implemented in a cost effective manner . Rather the process of using technology should be aimed to achieve high performance ( Furey,1993, Hammer, 1990). The goals of Six Sigma and BPM software - to reduce cost, improve customer relation, increase profits are defined. The challenges faced are poor standardization and system, which cannot be monitored or improved. 8. Duration and Implementation Cost of BPR The process of BPR takes six to eight months for implementation and the time period varies depending on the consulting company and the technology that is implemented. The project stages include Preparation & coordination of processes Business models Designing strategies for change Technical designs Employee training Realization of changes Implementation Cost Business process modelling project provides appropriate outcome in the form of value for the customer and reduced cost for the company to increase in profits. In the knowledge based economies, the business process provides the method to attain operational efficiency, reduce cost and time to do a work (Davenport, 1993b).Cost is an important factor which effects efficiency (Davenport, 1993; Hammer and Champy, 1993; Harrison and Pratt, 1993; Tenner and DeToro, 2000). Process cost refers to the resource used during the start and end of the process . Although cost reduction is important but reduced cost may have reverse impact on quality, which may cause customer dissatisfaction and have negative impact on long term viability for the organization (Gronroo&Ojasalo, 2004). The cost of implementation of the new system is determined through 2 processes The management and redesign study Consulting Implementation of re-designed process IT tools Employee training One an average cost of process management, consulting and redesigning varies from 4000 Euros to 7000 Euros and the cost of IT tools , implementation, employee training and change in organisation structure varies from euro 5000 to euro 10000 . 9. Quality Systems Many secondary situations arise from Business Process Modelling, which is a tool used for increasing competitive advantage, improving staff retention, increasing staff morale and market growth. Performance is measured through all Total Quality Management programs and manager has to direct organisations into responsibilities to know the cause behind the range of changes. Total Quality Management (TQM) was started in 1980 as business process theory was championed by Deming and Juran. The aim of quality is to achieve incremental improvement to process, quality, service, and speed, and reduce the overall cost. Lean manufacturing and Six Sigma are some of the best known quality management methodologies. TQM TQM refers to the mutual cooperation with associated business process, which guarantees proper deliver of products and services to meet the expectations of the customer. TQM is the method used to improve competitiveness, flexibility and efficiency of the organisation as a whole. The most important aspect of TQM is it is based on facts and it calls attention to the importance of knowledge regarding control variation. The improvement program is the approach which considers variation and is called Six Sigma. TQM for implementing organisational change TQM is a management system which takes care of all activities in the organisation. TQM implementation in small organisation is determined by direct customer demand. For example- supplier of large organisation demand for ISO 9000. 10. Improve Process Continuously 1. The process is reengineering and the success of reengineering depends on the monitoring and assessing the process of action. 2. The results determine the progress and also show how people are committed or are accepting the changes. 3. Communication within the organization, ongoing measurement, team review of performance and feedback is set where the processes can be remapped , reanalysed and redesigned. 4. Total quality management is the tool which can be used to handle a range of problem of BPR and to improve the overall process of change. 5. The redesign measures involve time, quality, cost and flexibility. Flexibility in business process reengineering and in framework of software solution provides the scope for improving process continuously. The framework is oriented towards customer to improve contact and service to the customer. 11. Health & Safety (H&S) Business process reengineering face financial risks, technical risks, project risks , functional risks and political risks. Organizational resistance is a common risk were benchmarking exercises is promoted to reduce performance shortfalls. The legislation involves the copyright of automation and third party software. The environmental factors are government policies, regulatory norms , guidelines , legalities and public resistance . Use of legislation and standards for doing business reduces the efforts needed for coordination. On implementing a new software improved safety and reduces risks are required. For health and safety , the process requires a risk assessment of the information system. The first phase of implementation involves improving the efficiency of internal operation, the second phase aims to add value and enhancement, and the third phase provides competitive advantage. Risk assessment Risks assessment involves identifying the vulnerability of the software solution and the new process to define the goals for risk analysis. The goals can be determined to allocate resources towards information system and evaluate the systems quantitatively. Risks assessment is needed to determine the level of risk and the system components. The risk assessment information enables to prioritise resources and allocate resources for mitigation of risks and make appropriate management decision. 12. Conclusion The business process model provides the method to measure the outcome and the final output is depicted through business process works. Business process models are designed to assess the demand of internal and external customers of the business process, the products of the business process, the operation view about the method of workflow operation (which includes tasks in a job, size of the takes, degree of customization and nature of tasks) and the behaviour view where the workflow is executed. It involves sequencing of tasks, consolidation of tasks, job scheduling etc. Planning for reengineering involves determining the smart objectives, aim, mission, vision, and designing the Gantt chart, PERT and Critical path to achieve the objectives within the resources and time limit. The goals of an organisation can be achieved through business process goals. The focus of business process improvement is value added actions, which ensures effective customer service, experience and reducing time and effort. Without financial support the process is unlikely to be implemented appropriately .Quality measures are determined for each process, and TQM and risk assessment contain set of practices, training methods, tools for managing organisation in the changing environment. The new system is developed through the process to provide complete customer satisfaction, improve performance of the organisation, and eliminate product defects and speeds up delivery of services and product. 13. Recommendations The organisation U Win Ltd., is a fairly small and a low cost technical solution having provisions of customization, with limited features for a small organisation can be implemented. The need of customer should be assessed effectively to determine the software design and overcome barrier. A careful monitoring of technology is needed to achieve results. Relationships of customer and external consultant should be smooth for effective implementation. Outsourcing is considered for cost reduction during BPR and outsourcing can also be done through strategic partnerships. HR initiatives involving mass training programmes, effective communication and compensation can reduce resistance to the process of re-engineering. Strategic partnership with customer will reduce resistance from customer. It will ensure effective design and development of project. 14. References 1. Aversano, L., Canfora, G., Cimitile, A., De Lucia, A., 2001a. Migrating legacy systems to the web. In: Proceedings of European Conference on Software Maintenance and Reengineering, Lisbon, Portugal. IEEE Computer Society Press, Los Alamitos, CA, pp.148–157. 2. Canfora, G., Cimitile, A., 1997. A reference life-cycle for legacy systems. In: Proceedings of ICSE’97 Workshop on Migration Strategies for Legacy Systems, Boston, MA. 3. Cook, S., 1996. Process Improvement: A Handbook for Managers. Hampshire, England: Gower Publishing. 4. Davenport, T. H., 1993a. Process Innovation: Reengineering Work through Information Technology. Boston, Massachusetts: Harvard Business School Press. 5. Davenport, T. H., 1993b. “Need radical innovation and continuous improvement? Integrate process reengineering and TQM”, Planning Review, 21(3), 6-12. 6. Davenport, T. H., and Short, J. E., 1990. “The new industrial engineering: information technology and business process redesign”, Sloan Management Review, 31(4), 11-27. 7. Day, G. S., 1994. “The capabilities of market-driven organizations”, Journal of Marketing,58(4), 37-52. Retrieved April 04, 2008, from JSTOR database, http://www.jstor.org 8. Fields, J., 2007. Conducting a business process analysis. The Dream Institute 2007. Retrieved August 10, 2007, from Achieving the Dream Institute Web site: 9. http://www.achievingthedream.org/_pdfs/_strategyinstitute07/Business_Process_Analysis_Overview%5B1%5D.pdf 10. Furey, T. R., 1993. “A six-step guide to process reengineering”, Planning Review, 21(2), 20-23. 11. Hammer, M., and Champy, J., 1993. Reengineering the Corporation: A Manifesto for Business Revolution. New York: Harper Business. 12. Keen, P. G. W., 1991. “Redesigning the organization through information technology”,Strategy and Leadership, 19(3), 4-9. 13. Porter, M. E.,1980, Competitive Strategy, The Free Press, 1980, 41. 14. Sethi, V., and King, W. R., 2003. Organizational Transformation through Business Process Reengineering. Singapore: Pearson Education, 2003. Read More