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MANAGEMENT DEVELOPMENT ISNTUTUTE COLLEGE OF BUSINESS ADMINSTRATION MISSOURI STATE UNIVERSITY

Mini MBA: Information Technology and Business Process Reengineering

UNIVERSITY Mini MBA: Information Technology and Business Process Reengineering Presented by: Waleed El-Naggar, MBA, PMP

Presented by:

Waleed El-Naggar, MBA, PMP

UNIVERSITY Mini MBA: Information Technology and Business Process Reengineering Presented by: Waleed El-Naggar, MBA, PMP
UNIVERSITY Mini MBA: Information Technology and Business Process Reengineering Presented by: Waleed El-Naggar, MBA, PMP
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Contents

Introduction: The Information Age

Management Information Systems

Business Process Reengineering

E-Commerce

٢ Contents Introduction: The Information Age Management Information Systems Business Process Reengineering E-Commerce
٢ Contents Introduction: The Information Age Management Information Systems Business Process Reengineering E-Commerce
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Learning Objectives

Explain the importance of the use of Information Technology in Business Explain the role of Business Process Reengineering (BPR) within the organization Identify the basic steps of BPR Explain the use of e-commerce

Process Reengineering (BPR) within the organization Identify the basic steps of BPR Explain the use of
Process Reengineering (BPR) within the organization Identify the basic steps of BPR Explain the use of
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THE INFORMATION AGE

“The stone age was marked by man's clever use of crude tools; the information age, to date, has been marked by man's crude use of clever tools.”

clever use of crude tools; the information age, to date, has been marked by man's crude
clever use of crude tools; the information age, to date, has been marked by man's crude
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Information Age

Adam Smith in his book “Wealth of Nations”, stated that the wealth of a nations is dependent on how well a society organizes its production in national businesses and factors.

The wealth of nations will be dependent upon how well a society can organize information & knowledge

Knowledge workers are those who use, manipulate, process and transmit information.

organize information & knowledge Knowledge workers are those who use, manipulate, process and transmit information.
organize information & knowledge Knowledge workers are those who use, manipulate, process and transmit information.
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Computers

Personal computer (PC) is a general-purpose computer whose original price, size, and capabilities make it useful for individuals, and which is intended to be operated directly by an end user, with no intervening computer operator.

Today a PC may be a desktop computer or a laptop.

operated directly by an end user, with no intervening computer operator. Today a PC may be
operated directly by an end user, with no intervening computer operator. Today a PC may be
operated directly by an end user, with no intervening computer operator. Today a PC may be
operated directly by an end user, with no intervening computer operator. Today a PC may be
operated directly by an end user, with no intervening computer operator. Today a PC may be
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Internet

The Internet is a global network of interconnected computers, enabling users to share information along multiple channels

The World Wide Web (www) is a very large set of interlinked hypertext documents accessed via the Internet.

Electronic mail (e-mail) is any method of creating, transmitting, or storing primarily text-based human communications with digital communications systems File Transfer/Sharing

or storing primarily text-based human communications with digital communications systems File Transfer/Sharing
or storing primarily text-based human communications with digital communications systems File Transfer/Sharing
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Management Information Systems

An 'MIS' is a planned system of the collecting, processing, storing & disseminating data in the form of information needed to carry out the functions of management

Academically, the term is commonly used to refer to the group of information management methods tied to the automation or support of human decision making

used to refer to the group of information management methods tied to the automation or support
used to refer to the group of information management methods tied to the automation or support
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Microsoft Office

Microsoft Word (Text Editor) Microsoft Excel (Spreadsheets) Microsoft Power Point (Presentations). Microsoft Project (Project Management) Microsoft Outlook (Email)

Microsoft Power Point (Presentations). Microsoft Project (Project Management) Microsoft Outlook (Email)
Microsoft Power Point (Presentations). Microsoft Project (Project Management) Microsoft Outlook (Email)
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Enterprise Resource Planning

Enterprise resource planning (ERP) is an enterprise- wide information system designed to coordinate all the resources, information, and activities needed to complete business processes such as order fulfillment or billing

ERP delivers a single database that contains all data for the software modules

such as order fulfillment or billing ERP delivers a single database that contains all data for
such as order fulfillment or billing ERP delivers a single database that contains all data for
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Enterprise Resource Planning

Manufacturing Supply chain management Financials Projects Human resources Access control

Financials Projects Human resources Access control Customer relationship management Sales and marketing,

Customer relationship management Sales and marketing, commissions, service, customer contact and call center support Data warehouse

management Sales and marketing, commissions, service, customer contact and call center support Data warehouse
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Enterprise Resource Planning

SAP

SAP ERP Financials

SAP ERP Logistics

SAP ERP Human Resource Management

Oracle ERP

١٢ Enterprise Resource Planning SAP SAP ERP Financials SAP ERP Logistics SAP ERP Human Resource Management
١٢ Enterprise Resource Planning SAP SAP ERP Financials SAP ERP Logistics SAP ERP Human Resource Management
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In-class Case Study

A software development company needs to implement an ERP system. Discuss what the company needs for successful implementation. Systems Analysis (HR, Accounting, HR, project reporting, Supplier chain, sales, marketing Required Resources (Machines, software, employees). Training. Vendors

reporting, Supplier chain, sales, marketing Required Resources (Machines, software, employees). Training. Vendors
reporting, Supplier chain, sales, marketing Required Resources (Machines, software, employees). Training. Vendors
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Business Information Technology

Business Information Technology (BIT) is concerned with a range of factors that determine the effective and efficient design, development and integration of information systems and Information technology to increase the income or profit. According to an American survey in 1990, over 50% of the employees in the US are knowledge workers. On average, over 75% of the national capital investment within modern information-based economics is on IT and IS.

On average, over 75% of the national capital investment within modern information-based economics is on IT
On average, over 75% of the national capital investment within modern information-based economics is on IT
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Information Technology & Information System

An information system within business results from the structure of integrates to handle , store and process data.

There are three components parts to an information system:

Inputs

are three components parts to an information system: Inputs Processing Outputs The data processing activity Data
Processing Outputs
Processing
Outputs

The data processing activity

Data

Inputs Processing Outputs The data processing activity Data Processing Information Information represent processed data
Processing Information
Processing
Information

Information represent processed data

Quality information for decision making is an essential asset for any competitive business.

represent processed data • Quality information for decision making is an essential asset for any competitive
represent processed data • Quality information for decision making is an essential asset for any competitive
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Technology Growth

١٦ Technology Growth
١٦ Technology Growth
١٦ Technology Growth
١٦ Technology Growth
١٦ Technology Growth
١٦ Technology Growth
١٦ Technology Growth
١٦ Technology Growth
١٦ Technology Growth
١٦ Technology Growth
١٦ Technology Growth
١٦ Technology Growth
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Business and Technology

Business organizations are often referred to as being information based retrieval e.g.:

Banking sectors Financial organization Airlines companies Stock keeping Payroll Professional Investment Systems (PIS)

Financial organization Airlines companies Stock keeping Payroll Professional Investment Systems (PIS)
Financial organization Airlines companies Stock keeping Payroll Professional Investment Systems (PIS)
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BUSINESS PROCESS REENGINEERING

“An organizational make-over”

“Reengineering is new, and it has to be done.” Peter F. Drucker

REENGINEERING “An organizational make-over” “Reengineering is new, and it has to be done.” Peter F. Drucker
REENGINEERING “An organizational make-over” “Reengineering is new, and it has to be done.” Peter F. Drucker
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What is “Process”?

“A specific ordering of work activities across time and space, with a beginning, an end, and clearly identified inputs and outputs: a structure for action”

1993)

space, with a beginning, an end, and clearly identified inputs and outputs: a structure for action”

(Davenport,

space, with a beginning, an end, and clearly identified inputs and outputs: a structure for action”
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Business Process Reengineering

The search for, and implementation of, radical change in business processes to achieve breakthrough results

Synonyms: business process redesign, business transformation, process innovation, business reinvention, change integration

Synonyms: business process redesign, business transformation, process innovation, business reinvention, change integration
Synonyms: business process redesign, business transformation, process innovation, business reinvention, change integration
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Business Process Reengineering

Rather than organizing a firm into functional specialties (like production, accounting, marketing, etc.); complete processes from materials acquisition, to production, to marketing and distribution should be considered.

The firm should be re-engineered into a series of processes.

to marketing and distribution should be considered. • The firm should be re-engineered into a series
to marketing and distribution should be considered. • The firm should be re-engineered into a series
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BPR is NOT:

Automation

Outsourcing

Downsizing

٢٢ BPR is NOT: • Automation • Outsourcing • Downsizing
٢٢ BPR is NOT: • Automation • Outsourcing • Downsizing
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BPR vs. Continuous Improvement

Continuous Improvement

Incremental Change People Focus Low Investment Improve Existing Work Unit Driven

Focus Low Investment Improve Existing Work Unit Driven Process Reengineering Radical Transformation People

Process Reengineering

Radical Transformation People & Technology Focus High Investment Rebuild Champion Driven

Process Reengineering Radical Transformation People & Technology Focus High Investment Rebuild Champion Driven
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BPR, A System Perspective

Feedback

Transformation Outputs
Transformation
Outputs

Environment

Inputs

٢٤ BPR, A System Perspective Feedback Transformation Outputs Environment Inputs
٢٤ BPR, A System Perspective Feedback Transformation Outputs Environment Inputs
٢٤ BPR, A System Perspective Feedback Transformation Outputs Environment Inputs
٢٤ BPR, A System Perspective Feedback Transformation Outputs Environment Inputs
٢٤ BPR, A System Perspective Feedback Transformation Outputs Environment Inputs
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BPR in Action

Start from the future and work backwards BPR is not easy - serious work BPR is not free - financial & cultural BPR often driven by fear and greed Change is a “struggle”; BPR is a “war”

free - financial & cultural BPR often driven by fear and greed Change is a “struggle”;
free - financial & cultural BPR often driven by fear and greed Change is a “struggle”;
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BPR: Strategy

Stakeholder Assessment - shareholders, customers, employees

Determine which stakeholder expectations should be met to gain competitive advantage

Determine how to redesign to meet expectations

Map out IT solutions to support

Develop & implement new processes, etc.

Determine how to redesign to meet expectations Map out IT solutions to support Develop & implement
Determine how to redesign to meet expectations Map out IT solutions to support Develop & implement
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BPR Key Steps

Select The Process & Appoint Process Team

Understand The Current Process

Develop & Communicate Vision Of Improved Process

Identify Action Plan

Execute Plan

The Current Process • Develop & Communicate Vision Of Improved Process • Identify Action Plan •
The Current Process • Develop & Communicate Vision Of Improved Process • Identify Action Plan •
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1. Select the Process

Review Business Strategy & Customer Requirements Select Core Processes Understand Customer Needs Don’t Assume Anything Select Correct Path for Change Appoint BPR Champion

Understand Customer Needs Don’t Assume Anything Select Correct Path for Change Appoint BPR Champion
Understand Customer Needs Don’t Assume Anything Select Correct Path for Change Appoint BPR Champion
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1. Select the Process (Contd.)

Identify Process Owners Establish Executive Improvement Team Provide Training to Executive Team

the Process (Contd.) Identify Process Owners Establish Executive Improvement Team Provide Training to Executive Team
the Process (Contd.) Identify Process Owners Establish Executive Improvement Team Provide Training to Executive Team
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2. Understand the Current Process

Develop a Process Overview Clearly define the process (Scope & Boundaries) Set business and customer measurements Understand customers expectations from the process Clearly Identify Improvement Opportunities

customer measurements Understand customers expectations from the process Clearly Identify Improvement Opportunities
customer measurements Understand customers expectations from the process Clearly Identify Improvement Opportunities
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3. Develop & Communicate Vision of Improved Process

Shared understanding among all stakeholders

Provide information on the progress of the BPR

Assure that the BPR is necessary & properly managed

Indicate actions required and those responsible

Tackle any actions that need resolution

Direct communication to reinforce new patterns of desired behavior

responsible Tackle any actions that need resolution Direct communication to reinforce new patterns of desired behavior
responsible Tackle any actions that need resolution Direct communication to reinforce new patterns of desired behavior
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4. Identify Action Plan

Develop an Improvement Plan & appoint Process Owners

Simplify the Process to Reduce Process Time

Remove Bureaucracy that may hinder implementation

Remove non-value-added activities

the Process to Reduce Process Time Remove Bureaucracy that may hinder implementation Remove non-value-added activities
the Process to Reduce Process Time Remove Bureaucracy that may hinder implementation Remove non-value-added activities
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4. Identify Action Plan (Contd.)

Standardize Process & Automate Where Possible Up-grade Equipment Plan/schedule the changes Construct in-house metrics and targets Introduce and firmly establish a feedback system

Plan/schedule the changes Construct in-house metrics and targets Introduce and firmly establish a feedback system
Plan/schedule the changes Construct in-house metrics and targets Introduce and firmly establish a feedback system
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5. Execute the Plan

Qualify/certify the process

Perform periodic qualification reviews

Define and eliminate process problems

Evaluate the change impact on the business and on customers

Benchmark the process

Provide advanced team training

Evaluate the Results

change impact on the business and on customers Benchmark the process Provide advanced team training Evaluate
change impact on the business and on customers Benchmark the process Provide advanced team training Evaluate
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Reengineering Success Factors

Strong Top Management Sponsorship

Alignment with company strategic direction

Measurable objectives

Proven Methodology

Effective Change Management.

Line Ownership (pair ownership with accountability)

Reengineering Team Composition (breadth & knowledge)

Management. Line Ownership (pair ownership with accountability) Reengineering Team Composition (breadth & knowledge)
Management. Line Ownership (pair ownership with accountability) Reengineering Team Composition (breadth & knowledge)
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Case: Ford Motors, Reengineering the Accounts Payable Department

Results of BPR effort Reduction of paper flow (invoice-less processing) Up-to-date data Personnel reduction by 75% Accurate financial information

of paper flow (invoice-less processing) Up-to-date data Personnel reduction by 75% Accurate financial information
of paper flow (invoice-less processing) Up-to-date data Personnel reduction by 75% Accurate financial information
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Reengineered Process Enabled by IT

Process: Accounts Payable

Account Payable Department: 500 Personnel (400 after improvement) vs. 15 in Mazda

Enormous paperwork, non-matching data: Purchase order, Receiving documents, invoices

BPR: Just-in-time Purchasing – Eliminate non-value- adding activities

Purchase order, Receiving documents, invoices BPR: Just-in-time Purchasing – Eliminate non-value- adding activities
Purchase order, Receiving documents, invoices BPR: Just-in-time Purchasing – Eliminate non-value- adding activities
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Reengineered Process Enabled by IT

٣٨ Reengineered Process Enabled by IT
٣٨ Reengineered Process Enabled by IT
٣٨ Reengineered Process Enabled by IT
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Reengineered Process Enabled by IT

Technology Facilitates the Process People drive the Process
Technology Facilitates the Process
People drive the Process
٣٩ Reengineered Process Enabled by IT Technology Facilitates the Process People drive the Process
٣٩ Reengineered Process Enabled by IT Technology Facilitates the Process People drive the Process
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E-Commerce

Buying and selling of products or services over electronic systems such as the Internet.

The amount of trade conducted electronically grew extraordinarily since the spread of the Internet.

Modern electronic commerce typically uses the World Wide Web at least at some point in the transaction's lifecycle, although it can encompass a wider range of technologies such as e-mail as well.

point in the transaction's lifecycle, although it can encompass a wider range of technologies such as
point in the transaction's lifecycle, although it can encompass a wider range of technologies such as
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Online Activities

Buying online (amazon.com, ebay.com, … etc) – Eliminate distance

On-line auctions.

Virtual Banking.

Travel and booking information.

E-library

E-government

E-advertising (free services)

On-line auctions. Virtual Banking. Travel and booking information. E-library E-government E-advertising (free services)
On-line auctions. Virtual Banking. Travel and booking information. E-library E-government E-advertising (free services)
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Case Study – Send Results by Email

Search engines are free tools used to search for anything on the Internets.

Main Revenue: Advertising

Smart engines: which advertisement to show?

▫ User location

▫ User Interests

Engines evolve into portals (Google, Yahoo, … etc)

advertisement to show? ▫ User location ▫ User Interests Engines evolve into portals (Google, Yahoo, …
advertisement to show? ▫ User location ▫ User Interests Engines evolve into portals (Google, Yahoo, …
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