That quality assurance all contribute to the competitive advantage would suggest increased efficiency of meetings, as the use of of a business unit.
However, the constant identification and information technology then replaces other means of analysis of new risks and opportunities are critical to the interaction for some types of exchanges.
On the other hand, ongoing success of a business. Evolving Internet aggregation the use of information technology may require additional technologies, including social networks, blogs and meetings, if the technology is difficult use or the purpose of subscription databases, are becoming important tools needed its employment is another than making the information to achieve and maintain advantages within the business exchange more efficient by decreasing the need for sector.
The transfer of information is a significant impact of meetings. The reasons why the use of information information technology in business. Companies gather technology in business relationships would decrease or information from both internal and external sources with increase the need for personal meetings can only be more efficiently than in previous years.
Email is now a speculated on. This paper analyses the extent to which the need for personal meetings has decreased or increased in the investigated 2. The Role of Information Technology business relationships as a result of the use of information technology, as well as to the extent which such a change is 2.
If the use of information technology affects the need for personal meetings, and that effect is related to when The social interaction of a business relationship can be the use is lower or higher, it is interesting to analyze why discussed in terms of how often people from the companies and how the need for personal meetings is affected by the meet, or how well the parties know each other.
It is argued use of information technology. Now, most organizations in that depending on the extent of the use of information all sectors of industry, commerce and government are technology for different exchanges, the impact on the social fundamentally dependent on their information technologies. One argument that could be The information revolution is sweeping through our raised in the theorizing on the effect of use of information economy.
Dramatic technology in business relationships is that the number of reduction in the cost of achieving, processing, and meetings, or need for meetings will decrease, as the use of transmitting information is changing the mode by which we the technology handles a great deal of information do business.
This article moves towards the explaining and exchanges, i. The information revolution is sweeping through information is changing the The question is if the need for personal meetings decreases mode by which we do business.
Many companies in most when the levels of information technology use increase. That our economy; no company can escape its effects. Dramatic would suggest increased efficiency of meetings, as the use of reduction in the cost of achieving, processing, and information technology then replaces other means of transmitting industries have little choice but to implement interaction for some types of exchanges.
On the other hand, some form of information technology in order to remain the use of information technology may require additional both innovative and on the cutting edge of competitive meetings, if the technology is difficult use or the purpose of advantage. The reasons why the use of information Business technology in business relationships would decrease or increase the need for personal meetings can only be There are two basic concepts or principles that can be speculated on.
One argument that could be Maintaining focus on the overall goals and mission of an raised in the theorizing on the effect of use of information organization while looking at Information Technology technology in business relationships is that the number of enables management to make appropriate investments, meetings, or need for meetings will decrease, as the use of reduce cost, and provide value.
We recommend a top-down the technology handles a great deal of information approach and have found the seven layer OSI Open Volume 3 Issue 12, December www.
OSI is an the more complicated it becomes as well as inflexible. By keeping IT simple we have found funds can be reallocated from maintenance and routine operational We found the same approach can be used when thinking activities to spending on strategic information technology about your Information Technology needs.
How can the preceding and Information Technology needs with the overall strategy competitive strategy concepts be applied to the strategic role and goals of your organisation. Strategy, Goals, Mission and of information systems? Information technology can be used Culture drive Business Processes. Business Processes to implement a variety of competitive strategies. These determine necessary tasks who, what, why, where and include the five basic competitive strategies differentiation, how.
The tasks define the Information Technology cost, innovation, growth, alliance , as well as other ways that requirements software and hardware to be investigated, companies can use information systems strategically to gain decided upon, and implemented.
For example: The challenge occurs when discussing the tasks and 1 Lower Costs Information Technology requirements. The communication 2 Differentiate channel tends to break down. Both sides have their own jargon, 4 Promote Growth abbreviations, and unique experiences. And the alignment of business processes switching costs that lock in customers and suppliers. Everyone on the team needs to take a look at the total picture and approach the products unattractive.
If this occurs it is possible to align business processes and Information 3. Reengineering Business Processes Technology needs with the overall strategy and goals of an organization. The result is motivated employees, satisfied One of the most popular competitive strategies today is customers, and reduced costs.
Reengineering is the fundamental 2. BPR combines a strategy of promoting business complicate their Information Technology environment. It is innovation with a strategy of making major improvements to our belief that Information Technology should not and does business processes so that a company can become a much not need to be complicated. We believe organizations should stronger and more successful competitor in the marketplace.
This clear throughout the organization. Are they taking too much time to complete? Is the quality of the outcome being compromised? In reality, block, there is no chance of success. Although it may not be possible to achieve radical innovation the publisher, except fair uses permitted under U. Ultimately, a major challenge in process innovation is making a successful transition to a continuous improvement environment.
A company that does not institute continuous improvement after implementing process innovation is likely to revert to old ways of doing business. May not be reproduced in any form without permission from each of the three major enablers of change merits its own chapter.
Selecting processes for innovation, for example, should be done early in order to focus effort and resources. Aspects of team selection that influence the change management process are discussed in Chapter The team infrastructure required for innovation, though similar in some respects to that required for organizationwide continuous improvement, 3 differs most significantly in the need for innovation teams to be familiar not only with particular processes, but also with the enablers of change discussed later.
Notes 1 Richard D. Sanders, Gipsie B. Ranney, and Mary G. Both the overall listing of processes and the focus on those requiring immediate innovation initiatives are crucial to the success of innovation efforts. The selection process establishes the boundaries of the processes that are to be addressed, enabling a firm to focus on those most in need of radical change.
The first is to identify the major processes in the organization. An informed selection can be made only when all of the organization's processes are known. A survey also serves to determine process boundaries that help establish the scope of initiatives for individual processes.
Enumerate Major Processes Considerable controversy revolves around the number of processes appropriate to a given organization. The "appropriate" number of processes has been pegged at from two to more than one hundred. May not be reproduced in any form without permission from has focused its change efforts on those it considers most critical or core.
IBM, which in the s had defined at least processes across the corporation, is today working with 18 much broader processes. The objective of process identification is key to making these definitions and determining their implications. If the objective is incremental improvement, it is sufficient to work with many narrowly defined processes, as the risk of failure is relatively low, particularly if those responsible for improving a process are also responsible for managing and executing it.
But when the objective is radical process change, a process must be defined as broadly as possible. A key source of process benefit is improving handoffs between functions, which can occur only when processes are broadly defined.
Moreover, if a process output is minor, radically changing the way it is produced is likely to result in the publisher, except fair uses permitted under U. As noted earlier, most of the companies that have identified their processes in the context of process innovation have enumerated between 10 and The fewer and broader the processes, the greater the possibility of innovation through process integration, and the greater the problems of understanding, measuring, and changing the process.
Our experience leads us to set the appropriate number for major processes at between 10 and May not be reproduced in any form without permission from Development of Product maintenance Manage process hardware operation Development of Technology Provide personnel software management support Development of Production and Market products and services operations management services Production Market management Provide customer service the publisher, except fair uses permitted under U.
Constricting the range also permits us to identify both operational and management processes and to find different approaches to redesigning each type. This does not mean that all of the identified processes will be of the same importance, or even that innovations will be identified for all of them.
Some firms may wish to maintain both broad and narrow processes. While addressing broad processes in an innovation context, they may also be working on narrow processes from an improvement context. That is, a broad process like order management should be broken down into its constituent processes or subprocesses, if that is the preferred terminology. The mapping need not be perfect—a narrow process, for example, could cut across two broader processes—but it should provide some orientation for all participants in process management initiatives.
Among the firms we have researched, only British Telecom has developed such a hierarchy of broad and narrow processes.
Whatever the number of processes identified, the identification process should be understood to be exploratory and iterative. May not be reproduced in any form without permission from importance become much clearer. Most companies that have worked on their processes for a number of years have revised their original lists.
In the context of business process improvement, Harrington suggests having executives jot down the processes for which they are responsible and analyzing and distilling their lists to arrive at the company's slate of processes. A major manufacturing concern used a similar approach to define its key processes. Determine Process Boundaries Once the processes have been identified at a high level, the boundaries between those processes need to be managed. May not be reproduced in any form without permission from with other processes or subprocesses?
Inasmuch as the end of any process is the beginning of another, either within or outside the organization, process innovation will often result in changes to upstream and downstream processes. Consequently, process management is best viewed as an iterative activity, in which subsequent innovation in one process gives rise to a need to reinnovate, or at least modify, others. Assess Strategic Relevance Having identified the boundaries of its major processes, a company must select individual processes for innovation.
Our experience suggests that the scope of the publisher, except fair uses permitted under U. IBM has innovation initiatives under way in all 18 of its key processes at once, but most companies cannot successfully deal with innovation on such a scale. Even given a clear need to redesign, most organizations would lack sufficient resources—people, funds, and time—to do so.
Beyond resources, most organizations could not endure the magnitude of organizational change that innovating all processes simultaneously would precipitate. An organization must understand the level of change and upheaval it can endure and must use that knowledge to determine how many processes it can successfully innovate.
Moreover, simultaneous change in multiple processes can be difficult to coordinate. Because redesigned processes must still interface with upstream and downstream processes, process owners or managers must communicate frequently about directions and interface points. Nevertheless, some firms find that they must work on groups of processes to solve particular business problems.
Xerox, for example, found that to affect the time it takes to bring products to market it had to address not only its product design and engineering processes, but also processes such as manufacturing, service, and logistics. May not be reproduced in any form without permission from the most critical processes. Each successful initiative becomes a model for future efforts. We have identified four criteria that might guide process selection: 1 the process's centrality to the execution of the firm's business strategy, 2 process health, 3 process qualification, and 4 manageable project scope.
Many firms' strategies, for example, focus on improving relationships with customers. One aspect of a the publisher, except fair uses permitted under U.
Such companies are likely to select for innovation processes at the customer interface, such as order management and customer service. In a more formal approach, the associations between business goals and business processes are identified and some sort of prioritization is done, based, for example, on the number and importance of goals the process supports. This approach to process selection is part of a number of planning and improvement methods.
We have seen several insurance companies in which the time spent actively processing and underwriting an insurance policy was only two or three hours, in an overall process cycle of more than 20 days. Process health is also suspect if a process crosses many functions and involves many narrowly defined jobs or has no clear owner or customers.
Good indicators here are if no one gets upset when the process product is late or over budget, or no one is sure whom to call when deficiencies are noted. May not be reproduced in any form without permission from innovation efforts.
Upon receiving a request from a business unit, the group conducts a brief study to evaluate opportunities for process improvement. The group then advises the business unit whether to proceed with the innovation.
Believing that the division had no choice but to pursue radical change, the head of the business unit told her employees: "If we succeed, half of us will no longer have a job in this division. If we fail, none of us will. Some of the common ways of defining the process are by geography or by product the publisher, except fair uses permitted under U. One manufacturer seeking to improve the product development process decided to focus on its most profitable product line.
Afar achieving dramatic results for this product, the next step was to begin introducing the other products to the new process. A final point regarding process selection relates to process "qualification," an activity we observed in nearly every company in which we observed process innovation. The primary goal of process qualification is to gauge the cultural and political climate of a target process.
A process "consultant," a key role discussed in a later chapter, is engaged to select only processes that have a committed sponsor and exhibit a pressing business need for improvement. Where commitment is lukewarm or the business need less than dramatic, the consultant would be expected to advise against attempting process innovation. At Continental Bank, because the firm had focused heavily on building broad relationships with corporate customers, the relationship management process was a natural place to start.
At Bethlehem Steel, the process of scheduling a customer order into the production schedule was chaotic and inefficient and often led to customer dissatisfaction and sales force frustration. Therefore, the customer service process, which included production scheduling, was an easy selection. When Federal Mogul's Chassis Products Division analyzed its business, executives concluded that the failure to deliver new product prototypes quickly was a major impediment to increased sales.
Applying radical change to this process was then not a difficult decision. May not be reproduced in any form without permission from Regardless of how much care is taken in the identification and selection of processes, the process landscape will almost inevitably change with time and experience.
The firms we have studied spent several years traveling the process innovation path, in the course of which most changed the number of processes they defined, the boundaries of individual processes, and the relative priorities of processes as candidates for innovation initiatives. The Fate of Processes Not Selected Processes not selected for early innovation initiatives must still be addressed.
Recognizing that it can only be approximate, since business directions often change quickly and the resources for process innovation may rise and fall the publisher, except fair uses permitted under U.
We do not recommend extending such a timetable over more than three years, since beyond this period predictions of business priority and resources are likely to be poor.
Finally, innovation initiatives should be undertaken soon after detailed process qualification activities, since management commitments and process capabilities are also volatile over a period of several years. Another alternative, discussed in the previous chapter, is to apply process improvement to processes not selected for innovation. This poses two problems. One, process improvement relies on a completely different set of methods and approaches.
And two, it is difficult to apply incremental improvement to processes scoped broadly for purposes of achieving radical change. Should it later become a candidate for an innovation initiative, the process can be attacked in its broader form. At least one firm, IBM, is pursuing improvement efforts concurrently with process innovation within the same process.
The innovation efforts focus on broad processes, the improvement efforts on narrower constituent subprocesses. May not be reproduced in any form without permission from the process improvement activity is likely to be for naught, inasmuch as teams might strive to improve narrow processes that do not even exist in the new process design.
Summary Identifying and selecting processes for innovation is an important prerequisite to process change. But this step is also significant in its own right. Without some focus on critical processes, an organization's energies, resources, and the publisher, except fair uses permitted under U. Especially during the early phases of process innovation, it is important that an organization demonstrate some successes.
It can do so only if it is selective in the processes it chooses to innovate. After a process has been selected for innovation, a firm can begin to think about how it will create quantum improvements in the process and what change tools it will employ. The next three chapters address the issue of how radical change in process designs is enabled.
Each considers a different enabler of process change. Rockart and James E. Shapiro, John J. Sviokla, and V. Because business processes define how work is done, we are dealing with the relationship between strategy and process. Process innovation is meaningful only if it improves a business in ways that are consistent with its strategy. May not be reproduced in any form without permission from with particular strategic objectives in mind. Even the powerful enablers of process innovation discussed above should be applied, not indiscriminately, but in the context of a strategic focus.
Earlier, we discussed the selection of strategic processes for innovation. Here, the focus is on embodying an organization's strategy in a vision of the future process state. Inspiring a vision for operational processes clearly is not the only role for strategy. This is not always the case with companies that make quality—which is not a strategy, but a way of implementing strategy—a key aspect of their strategies. Examples of this problem abound.
A defense industry that has invested heavily in quality at a the publisher, except fair uses permitted under U. Congruence or alignment between strategies and processes is essential to radical change in business processes. Strategy and process objectives must reinforce one another and echo similar themes.
Fit between strategy and process, always important, is particularly important when the goal is radical business change. Radical change cannot be accomplished without clear direction. May not be reproduced in any form without permission from process vision. A process vision consisting of specific, measurable objectives and attributes of the future process state provides the necessary linkage between strategy and action. Unless such a vision is shared and understood by all the participants in a process innovation initiative—before redesign begins— the effort will all too easily slip from innovation to improvement.
Use of the terms "process simplification" or "process rationalization" in a process change initiative usually indicates that no vision is present, and that only marginal change is likely to be achieved. These terms pertain to the elimination of obvious bottlenecks and inefficiencies, with no particular business vision as context. Harvard Business School: A good manager. It questions conventional wisdom about what is easy and economical and thus at times leads to more complex, rather than simpler, processes.
Process visions, like strategies, should be easy to communicate to the organization, nonthreatening to those who must implement or who are affected by them, and as inspirational as measurable targets can be. These criteria generally make cost or headcount reduction objectives less than satisfactory, since they are rarely inspiring and are almost certain to be perceived as threatening by employees. When cost reduction is the ultimate objective, it should be mixed with other intermediate objectives, such as time reduction or quality improvement, that might lead to cost savings.
May not be reproduced in any form without permission from otherwise aid the program. Process change without strategy and vision seldom goes beyond streamlining, with a resulting incremental reduction in time and cost. Change is much more likely to be successfully implemented by and to benefit a business when it is focused on what matters most. A masterpiece of employee communication that encourages overworked employees to try to find ways to reduce their own workloads, the program has been praised in the popular press, and analysis has revealed examples of functional productivity improvements.
This plant's business strategy was to reverse several years of poor financial results in the circuit breaker business through innovation in process, organizational structure, and technology. This contrast of two operational improvement initiatives at GE suggests that business units are the appropriate locus for process innovation efforts. It may not be possible for an organization the size of General Electric to define at the corporate level strategies that can inspire process innovation in specific businesses.
A firm's business strategy provides the overall context for an innovation effort and is assumed to be an input into the innovation initiative. The primary output is process vision, consisting of specific objectives and attributes. In this chapter, we discuss how business strategy should inform process visions and what role customer perspectives and external benchmarking should play in formulating them, and we consider in depth what their context ought to be, including performance objectives and specific process attributes.
Definitions of strategy and vision abound. Vision is thus more tactical than strategy, although both must be formulated at a high level. Moreover, a strategy should be visionary i.
May not be reproduced in any form without permission from into the future , and a vision strategic i. This gives rise to possibilities for confusion. We do not assume that there is a single, correct strategy for an industry or product.
Companies can succeed with very different strategies as long as they are well executed. A defined strategy is a primary determinant in both the selection of, and development of process visions for, processes to be innovated. Because it bears a heavy load in establishing a context for process innovation, a strategy, in addition to positing a broad view of a future state, must also meet the following criteria.
Nor do such visions help employees understand how their targets are to be achieved. It is, in fact, all too easy for executives to state financial strategies without knowing how they will be achieved. Yet a strategy is meaningless unless progress toward its goals can be assessed, a requirement frequently violated in many companies as noted in the literature on nonfinancial performance measures 9 and "strategic control.
May not be reproduced in any form without permission from company strategies that don't mention flying, and so forth. This aspect of strategy, although not important in itself, renders other requirements more likely to be met. In order to inspire, a strategy must be clearly understood and meaningful to its audience and be the genesis of a considerable amount of work. An inspirational strategy can provide energy when setbacks occur or implementation teams lose momentum.
The emotional content of a strategy is sometimes captured in its mission statement. This issue has often been ignored or paid lip service, but companies that have acknowledged it have had successful results. It should be broad enough to encompass a variety of opportunistic directions within its overall context.
For example, Baxter Healthcare, American Airlines, and a number of other firms that have created electronic distribution processes now use them to distribute products well outside their mainstream businesses in Baxter's case, office supplies, in American's, flowers and candy. Continental Bank's chairman Thomas Theobald's frequent spoken and written comments about the need for radical change in banks and banking regulation—e.
May not be reproduced in any form without permission from strong financial results, but it clearly has come a long way since its bankruptcy in the early s. Rank Xerox U. Indeed, in attacking 18 key processes simultaneously, the company is the publisher, except fair uses permitted under U. Yet any of these requirements can be taken too far. Nonfinancial strategies make sense only to the degree that they lead to better financial performance.
Strategy, moreover, provides only an internal perspective in creating a process vision. To incorporate these sources into its visioning activity, an organization must include in its process innovation initiative both a structured exercise to understand customer perspectives and a round of external benchmarking. Customer Inputs into Process Visions A key aspect of creating a process vision is to understand the customer's perspective on the process. May not be reproduced in any form without permission from Asking customers what they require of processes serves multiple purposes.
In the context of creating visions, the customer perspective furnishes both ideas and objectives for process performance. Seeking customer input also demonstrates a desire for a close relationship, although this input must be actually factored into process designs to fully achieve this objective. Finally, new processes may require that customers change their own behavior for the process to be fully effective. Seeking input at an early stage starts building customer commitment to the needed changes and lets customers begin their own process transition.
Of course, most processes have multiple customers. It is often not very useful the publisher, except fair uses permitted under U. It is much more valuable to select a limited set of customers, based either on their importance to the firm or their ability and willingness to furnish thoughtful input, and spend more time with each one.
Focusing on a few customers also allows for less structured interview processes in which innovative ideas can be sought. The type of inputs that should be solicited from customers are broad, encompassing desired process outputs, performance, flow, enablers, and other relevant factors.
The method of customer contact may take several forms. A focus group may be the best way to deal with individual, rather than organizational, customers. Some firms prefer to send consultants to talk to customers, so that they will not hold back on their true feelings.
Other firms would never pass up an opportunity to build closer personal relatiouships with customer executives. In our experience, customers rarely provide breakthrough ideas for process innovations. If the customer feedback process is somewhat iterative, taking place throughout a process innovation initiative, customers can react to successively more concrete process designs. May not be reproduced in any form without permission from participation in the design of information systems, customers often do not know what they want until they see what they can get, or until they see something that they know they don't want.
Process Benchmarking As practiced in the quality movement, benchmarking helps companies formulate objectives for continuous improvement programs. But it can also be an effective tool for determining process objectives and identifying innovative process attributes. Most appropriate for the purposes of process innovation is a "best practice" or "innovation" benchmark that selects companies on the basis of the performance of a particular process, without regard to the industry, and addresses specific innovations and uses of change enablers as well as overall process performance.
A company attempting to innovate its order management process, for example, might study Digital Equipment Corporation's expert systems for automated configuration or USAA's empowered customer service representatives, whereas a firm studying new product development might analyze how J. Penney employs videoconferencing to place new fashion designs in stores.
Process measures and costs may help to establish objectives for a new process, but even a poorly performed process in a poorly performing company can have innovative aspects. It is also important to benchmark distinctive uses of enablers and innovative work designs. Even relatively narrow aspects of processes can be worthy of analysis.
This innovation, although it does not comprise a complete process, can be an important component of an order management approach. May not be reproduced in any form without permission from Other industry innovations should not be neglected in formulating the objectives and attributes of a process vision, but managers may be more readily disposed to adopt innovations for which there is evidence of use in their own industry.
The sources of benchmarks are varied, ranging from company visits to telephone discussions with consultants and executives in other firms to industry publications and academic case studies. These visions provide necessary direction for the design team. May not be reproduced in any form without permission from Process objectives include the overall process goal, specific type of improvement desired, and numeric target for the innovation, as well as the time frame in which the objectives are to be accomplished.
Both general process functionality and change goals should be addressed by these objectives. Process objective creation begins with a vision team asking itself, and key stakeholders, "What business objective is this process supposed to accomplish? To avoid what Ted Levitt has called "marketing myopia," it should concern itself not only with traditional outputs of the process, but also with real customer needs.
The analysis should also address the aspects of the business that are most important to customers. May not be reproduced in any form without permission from would willingly pay more for a better product or service. Process objectives must be quantified as specific targets for change.
Process objectives should be derived from strategy. Hackman, J. Work redesign. Reading, MA:Addison-Wesley. Hammer, M. New York: Harper Business. Hub, M. Jackson, B. September, 5 MacDonald, J. Understanding Business Process Reengineering in a Week. L
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