safa: Business pressure, organizational responses, and IT support
An organization's information technology infrastructure consists of the Discuss the relationships among business pressures, organizational responses, and. Strategic Organizational Responses to the Environmental Pressures: systems proposition that organizations are not able to internally generate all the information, resource flows, and relations of a selected organization, Scott () sees .. cooptation, joining trade associations, cartels, reciprocal trade agreements. Business Drivers(Pressures). ▫ Globalisation and systems. ▫ Transformation of Industrial Economies. Knowledge- and information-based economies, Productivity, Organizational Responses relationships with customers, suppliers, and.
The organization also decides that, in order to protect the competitive advantage that this returns policy will bring, they will develop their own customization to their ERP system to implement this returns policy. As they prepare to roll out the system, they invest in training for all of their customer-service employees, showing them how to use the new system and specifically how to process returns.
Once the updated returns process is implemented, the organization will be able to measure several key indicators about returns that will allow them to adjust the policy as needed. As changes to the returns policy are made, the changes are rolled out via internal communications, and updates to the returns processing on the system are made. In our example, the system would no longer allow a dress to be returned after fourteen days without an approved reason.
If done properly, business process management will provide several key benefits to an organization, which can be used to contribute to competitive advantage.
When a business process is designed correctly and supported with information technology, employees will be able to implement it on their own authority. In our returns-policy example, an employee would be able to accept returns made before fourteen days or use the system to make determinations on what returns would be allowed after fourteen days. By building measurement into the programming, the organization can keep up to date on key metrics regarding their processes.
In our example, these can be used to improve the returns process and also, ideally, to reduce returns.Smith School of Business 2018 Winter Commencement
As an organization implements processes supported by information systems, it can work to implement the best practices for that class of business process. In our example, the organization may want to require that all customers returning a product without a receipt show a legal ID. This requirement can be built into the system so that the return will not be processed unless a valid ID number is entered.
By creating a process and enforcing it with information technology, it is possible to create a consistency across the entire organization. In our example, all stores in the retail chain can enforce the same returns policy. And if the returns policy changes, the change can be instantly enforced across the entire chain. Business Process Reengineering As organizations look to manage their processes to gain a competitive advantage, they also need to understand that their existing ways of doing things may not be the most effective or efficient.
A process developed in the s is not going to be better just because it is now supported by technology. He states in the introduction to the article: They are geared towards greater efficiency and control. Yet the watchwords of the new decade are innovation and speed, service, and quality. It is time to stop paving the cow paths.
Instead of embedding outdated processes in silicon and software, we should obliterate them and start over. Business process reengineering is not just taking an existing process and automating it.
BPR is fully understanding the goals of a process and then dramatically redesigning it from the ground up to achieve dramatic improvements in productivity and quality. But this is easier said than done. Most of us think in terms of how to do small, local improvements to a process; complete redesign requires thinking on a larger scale.
Hammer provides some guidelines for how to go about doing business process reengineering: Organize around outcomes, not tasks. This simply means to design the process so that, if possible, one person performs all the steps.
Instead of repeating one step in the process over and over, the person stays involved in the process from start to finish. Have those who use the outcomes of the process perform the process. Using information technology, many simple tasks are now automated, so we can empower the person who needs the outcome of the process to perform it.
Chapter 8: Business Processes – Information Systems for Business and Beyond
The example Hammer gives here is purchasing: Subsume information-processing work into the real work that produces the information. When one part of the company creates information like sales information, or payment informationit should be processed by that same department.
There is no need for one part of the company to process information created in another part of the company. Treat geographically dispersed resources as though they were centralized.
With the communications technologies in place today, it becomes easier than ever to not worry about physical location. A multinational organization does not need separate support departments such as IT, purchasing, etc.
Link parallel activities instead of integrating their results. Departments that work in parallel should be sharing data and communicating with each other during their activities instead of waiting until each group is done and then comparing notes.
Put the decision points where the work is performed, and build controls into the process. The people who do the work should have decision-making authority and the process itself should have built-in controls using information technology.
Capture information once, at the source. Requiring information to be entered more than once causes delays and errors. With information technology, an organization can capture it once and then make it available whenever needed.
These principles may seem like common sense today, but in they took the business world by storm. Hammer gives example after example of how organizations improved their business processes by many orders of magnitude without adding any new employees, simply by changing how they did things see sidebar.
Unfortunately, business process reengineering got a bad name in many organizations. This was because it was used as an excuse for cost cutting that really had nothing to do with BPR. For example, many companies simply used it as an excuse for laying off part of their workforce.
Today, however, many of the principles of BPR have been integrated into businesses and are considered part of good business-process management.
Reengineering the College Bookstore The process of purchasing the correct textbooks in a timely manner for college classes has always been problematic.
But college bookstores have one big advantage over their competitors: In other words, once a student has registered for classes, the bookstore knows exactly what books that student will need for the upcoming term. To leverage this advantage and take advantage of new technologies, the bookstore wants to implement a new process that will make purchasing books through the bookstore advantageous to students.
Though they may not be able to compete on price, they can provide other advantages, such as reducing the time it takes to find the books and the ability to guarantee that the book is the correct one for the class. In order to do this, the bookstore will need to undertake a process redesign. The goal of the process redesign is simple: After diagramming the existing process and meeting with student focus groups, the bookstore comes up with a new process.
In the new process, the bookstore utilizes information technology to reduce the amount of work the students need to do in order to get their books. In this new process, the bookstore sends the students an e-mail with a list of all the books required for their upcoming classes.
By clicking a link in this e-mail, the students can log into the bookstore, confirm their books, and purchase the books. The bookstore will then deliver the books to the students.
College bookstore process redesign click to enlarge ISO Certification Many organizations now claim that they are using best practices when it comes to business processes.
In order to set themselves apart and prove to their customers and potential customers that they are indeed doing this, these organizations are seeking out an ISO certification. This body defines quality standards that organizations can implement to show that they are, indeed, managing business processes in an effective way.
The ISO certification is focused on quality management. In order to receive ISO certification, an organization must be audited and found to meet specific criteria. In its most simple form, the auditors perform the following review: Over the years, this certification has evolved and many branches of the certification now exist. ISO certification is one way to separate an organization from others. You can find out more about the ISO standard here. Summary The advent of information technologies has had a huge impact on how organizations design, implement, and support business processes.
From document management systems to ERP systems, information systems are tied into organizational processes. Using business process management, organizations can empower employees and leverage their processes for competitive advantage. Using business process reengineering, organizations can vastly improve their effectiveness and the quality of their products and services.
Integrating information technology with business processes is one way that information systems can bring an organization lasting competitive advantage. Study Questions What does the term business process mean?
What are three examples of business process from a job you have had or an organization you have observed? What is the value in documenting a business process? What is an ERP system? How does an ERP system enforce best practices for an organization? What is one of the criticisms of ERP systems? What is business process reengineering? How is it different from incrementally improving a process?
Why did BPR get a bad name? List the guidelines for redesigning a business process. These processes called creative tension. For managers, to be effective and efficiency, they must access and utilize these vast stores of data. So, lots of companies are spending more time or money to solve social problems and this called organizational social responsibility or individual social responsibility.
IT has helped in this side by created organization of IT green. The main social problem is Digital Divide which shows the gap among people who are using information technology and people who are not. So, companies are trying to close this gap by producing suitable products from both.
Compliance with Government Regulations and Deregulation: The process to be complaint is expensive and time-consuming. So, these organizations relay on IT to support and provide the information of complaint. Protection against Terrorist Attacks: So, IT helps these companies to protect themselves by providing security systems and possibly identifying pattern. Even so, the process of monitoring has become more available.
These responses are implementing by using the IT. They use IT to help them achieving these benefits.