Week 1 – Introduction to BPM

Exercise 1.1

a) What is the relationship between strategy and process in organisations and how
do processes enable strategy?

Students to discuss in groups; Use the text below for reference when discussing the answer.

There is a strong relationship between strategy and business process in organisations as

processes are the method by which the organisation’s strategy is achieved; processes
operationalize the strategy through strategic alignment and the use of information
technology. Traditionally, when analysing a process diagram, there is often a strong focus on
the description of the operational performance of the tasks; the “whats” and not enough
focus on how they support the strategy; the “whys” (Nurcan et al., 2005). Adopting a “goal
perspective” enables the relationship between strategy and processes to be analysed. Firstly,
as the nature of the relationship dictates that processes are subservient to the organisation’s
goals; the business objectives and vision need to be articulated, and the processes that are
affected need to be redesigned, thus there is a sequential nature to the task (Davenport and
Short, 1990). Secondly, the processes need to be strategically aligned to the organisation’s
strategy in order to enable the organisation’s strategy. Processes are viewed as the internal
operationalization of the external strategic goals of the organisation in the Venkatram Model
of Strategic Alignment, with the degree of correspondence between the two elements being
described as “strategic fit” (Henderson and Venkatraman, 1993). Finally, IT can assist in
enabling business processes to support the strategy through functional integration and cross
dimensional alignments. Specially, IT integrates all the functional silos of the organisation
(Ould, 1995), providing horizontal integration and thus enabling the business processes to
support the business strategy. The use of information systems and other complementary
assets assists the business in achieving competitive advantage by aligning their business
processes with their strategy.

b) Conduct a value chain analysis of Woolworths Supermarket

Students to conduct a value chain analysis of Woolworths following the guide in Module 1
(p.29).

Exercise 1.3

1. What type of process is the above one: order-to-cash, procure-to-pay or issue-to-

resolution?
 Order-to-cash.
2. Who are the actors in this process? Who is/are the customer(s)?
The actors are the pharmacy’s customer (i.e. there is a clearly designated customer), the
pharmacy technician, the pharmacist, the doctor (who is called in some cases) and possibly
the insurance company (also called in some cases).
3. What are the tasks of this process?
 Receive new prescription (drop-off);
 Enter prescription into pharmacy system
 Perform automated DUR
 Review DUR Alarm
 Check insurance
 Resolve insurance issue (incl. call doctor if needed)
 Collect drugs
 Check drugs
 Deliver drugs (incl. collect payment)

4. What value does the process deliver to its customer(s)?

To obtain the correct drugs at the agreed pick-up time, with the minimum possible co-
payment amount given the rules of the health insurance plan.
5. What are the possible outcomes of this process?
Positive outcome:
 The correct drugs are delivered on time and the customer agrees with the co-
payment
Negative outcomes:
 The drugs are not available at pick-up time when the customer arrives due to
delays in the process.
 The customer does not agree with the co-payment amount and withdraws the
prescription at pick-up (customer not served).
 The prescription is filled incorrectly or incompletely.
6. Taking the perspective of the customer, what performance measures can be attached
to this process?
 Percentage of cases where the drugs are available at the requested pick-up time
 Percentage of cases where customer agrees to pay the co-payment
 Percentage of cases where prescriptions are fulfilled correctly

7. What potential issues do you foresee this process might have? What information
would you need to collect in order to analyze these issues?
 Drugs are not available at pick-up – a count of these cases and reasons for the
delays should be made
 The customer does not agree to pay the co-payment – count of these cases and
reasons for discrepancies should be made
 The pharmacist needs to deal with too many automated DUR alerts –
percentage/count of false positives among drug alerts is needed, categorized by
reasons.
 The pharmacist rejects too many prescriptions during the quality check –
percentage/count of errors made by technicians is needed, categorized by
reasons.

8. What possible changes do you think could be made to this process in order to
address the above issues?
The customer does not get to know how much they will co-pay until the last minute. This
information should be given to the customer as early as possible.
Prescriptions are always being entered into the system only one hour before they are due,
thus not leaving enough time to resolve issues and inform the customer. The process needs
to be front-loaded a bit more.