Information Technology: The Implementation of Business Process - Dissertation Example

Information Technology: The Implementation of Business Process Change can be defined as the transformation in organizational structure. Organizational change is also referred to as the system-wide rescheduling of reporting relationship, authority and task division. The change in the organizational structure affects the information processing arrangement, rewards and appraisal, communication and decision making. There are two approaches related to the organizational change, rethinking and reengineering. Reengineering is said to be a difficult process but if implemented can yield better results in the process of organizational change. Reengineering requires that the management confront the assumptions regarding the work they do which have been long-held in the organization. They should rather set goals for themselves and work towards achieving these goals (Griffin & Moorhead 536). Change is an everyday process, but to implement change in the organizational structure requires more than the usual change process. Organizational change is the modification of core facets of the operations related to the organization. The operations of organization are greatly affected by the change in leadership, growth, expansion, merger and acquisition, technological change, competition, etc. These factors are basically the reason behind the need of organizational change (J. Mills, Dye, & A. Mills 4). A change in the form of information technology is deployed by organizations thinking that this will improve the existing communication pattern and will help to communicate more efficiently. Change is a usual process which is brought into effect for the betterment of the organization and the people associated with it. But unfortunately it is not possible to apply the new technological change due to various factors. The employees of the organization sometimes oppose the change as they feel the new technical change may not be obliging. Some of the prominent researchers suggested that people do not like changes in organization because they are unwilling to adopt new things. In other words people do not like change as they feel they are happy enough with their current state or they do not want to indulge themselves in learning new technologies. According to some other researcher people resist change due to the panic that they may have to undergo structural changes in the form of indecent allocation of responsibilities and loss of authority (Robbins 187). It has been also suggested that the actual reason for resisting an organizational change is a combination of psychological and structural reasons (Leonardi 408). Apart from the mentioned reasons for opposing change in an organization some of the other factors which also plays a part in opposing change are as follows:- Fear – This is by far the biggest reason why people do not like change in their organization thinking that the change may not be adaptable to them and can face different consequences. Comfort – People do not want to get away from their comfort zone. If they are happy in their present job roles and responsibilities, it’s tough for them to break the shackle and adapt to a new role and responsibility. Do not identify a change is required – People sometimes feel that when something is on track, there is no need for a change. Lack of Trust – Employees of an organization do not faiths the new technology if they lack prior experiences. Force to adapt – The managers of organization sometimes forces the employees to adopt the new technology. But the fact is that people have to be guided towards the change not forced. Personal preferences – Some people prefers their own style, which makes them heard to get familiarize with the change. Scarcity of Knowledge – Lack of knowledge of the new technology makes them feel that they may get exploited in situations. Business Process A business process can be defined as the set of logically related tasks required to be performed for producing a specific service or product or to reach a particular organization goal. A business process is considered as a core competency for a business, as companies feel that their business process distinguishes them from the competitors (Vandersluis 90). The business process of an organization is often displayed in a flowchart with the sequence of activities. During the past few years the business process change occurred mainly in the form of information technology (Harmon, xxviii). The field of business process management deals with automating, monitoring and controlling of the existing system (Sheth, Fiadeiro & Dustdar 1). On the other hand a business process improvement is a systematic way of improving the design. Some of the simple steps by which a business process can be improved are as follows:- Develop the business range – This is the first step of improving a business process. An organization has different activities within the business but to schedule it properly this process is used. This step helps to decide the initiation point. In other words it helps in prioritizing the activities. Establish the plan – The second step is about the formulation of the business plan keeping in view the available tools and materials which will be needed during the course of action. Designing the path- The third step is to draw the path by which the organizational goals are to be reached. Approximation of time and cost – The next step comes in the form of estimating the total cost and time required for the completion of the project. Validation of the path – The fifth step to check the validity of the chosen path and to look after whether the possibilities of any trouble in the way. Application of improvement techniques – The next step is to apply improvement techniques in the business process to develop its functionality. Creation of Control measures – This step is for creating internal control measures. The step is also known as the monitoring step of a business process. Testing of the plan- In this step the process so formulated is tested and if there is any rework needed, that is also carried out. Implementation – This step is about the implementation of the formed business process. Maintenance – The final step is the maintenance of the process (Page 8-15). Business Process Reengineering The change in economic scenario has been the reason for increased interest in BPR around the world (Attaran 585). Business Process Reengineering or what is commonly known as BPR became a buzzword from the 1990’s generating incredible interest for redesigning the business process. BPR was earlier adopted by private sectors but later public institutions also adopted it (Unpan 67). The globalization and the liberalization of the economy and the trade markets have created different conditions in the business market. These conditions are distinguished by serious competition and volatility in the business environment. Competition has become intense and is seen to increase continuously with respect to quality, price, selection, promptness of delivery and service. Further international cooperation, extinction of barriers and innovations related to technology has intensified the competition. The jobs in context to task-oriented have become very much outdated in world of competition, change and customers. It is recommended to the business entities to rather organize their work as a process. These changes have emphasized on the need for transformation of organization. In the process of transformation the organization, structure, environment or rather entire process sees the light of change. Business Process Reengineering (BPR) can be defined as follows: Reengineering is the business process implemented to achieve spectacular improvements in the performance related to service, quality, speed and price. Process is an arrangement or set of various activities which are designed in order to achieve specific yield for the business market. Process largely emphasizes on the kind or work performed within a business entity. In other words business process reengineering is the evaluation and design of work activities and internal process of the organization. Reengineering is also considered as the base for much recent developments in the management field. Some of the areas where BPR played a major role include Supply chain management, Enterprise resource planning, Knowledge management systems, Human resource management, group-ware system and customer relationship management. An organization can get striking improvements through the redesign of its process. BPR emphasizes on the need of restricting the business processes before organizations restructure themselves. It has been a fact that information technology can facilitate the implementation of the best strategy. BPR is that process which bridges the gap and provides a link between the information technology and the strategy. Information technology plays an important role in the redesign of a business process. According to the author of ‘BPR’ the harmonization between Information Technology and Business Process Reengineering is changing the way a business is carried out (Srinivasan 10). Business Process Reengineering must be treated as a project that holds a special value for the future of an organization. Therefore like any other project BPR will also have the design phase, the analysis phase and the implementation phase (Ramachandran 3-7). In the analysis phase a thorough understanding of the market and customer needs are undertaken. Apart from the external assessment internal focus is also given in the form of how the work will be done in attaining the goal. In the design phase generally designing takes place by which a customer is satisfied to the fullest extent. And in the implementation phase based on the analysis and designing phase the process is implemented. Business Process Methodology A business methodology is developed to carry out the business process (Aalst 380). There is availability of several methodologies of business process reengineering. Some of the methodologies would incur fundamental changes and some will bring upon incremental changes. But the best type of approach would be the adaptation of methodology which would be a combination of both fundamentals as well as incremental changes. The key phases of a methodology are described below:- Develop tactical vision – Business Process Reengineering is carried out by a well defined business vision. The business vision can be different type of objectives like reduction in cost, reduction in time, increasing the quality of the output product etc. Recognize and select the Business Process Reengineering prospects – Approaches such as high-impact approach is used to focus on the most important processes and exhaustive approach to identify all the processes within the organization. And according to the redesign necessity activities are scheduled. Evaluation of the current process – This phase is concerned with the identification of the problems and measures are taken to avoid the old mistakes. Benchmarking – It examines the best practices by the competitors which helps the organization in analyzing the market standings. Identification of Information technology capabilities – The capabilities of information technology must be taken into account for the process redesign. New Process Design – In this phase the new design of the reengineering process is designed. Develop an alternative – This phase is characterized by providing alternative solution and a careful evaluation of cost and benefit associated with the implementation is carried out. Pilot Program – This step is about the way the management is convinced regarding the fact that the solution is executed in a time bound frame and should cover implementation mechanism, timeline and important milestones. Review and approval – This is the last phase of a business process methodology, this phase is concerned about getting the consent from the board for execution (Balasubramanium & Radhakrishnan 39-40). The diagram for BPR implementation is shown below:- (SOURCE : Radhakrisnan) Success of Business Process Reengineering Business Process Reengineering does not only mean a mere change but it acts as a revolution. BPR has the potential to impact every aspect of the business. There have been a large number of factors which contributes to the success of Business Process Reengineering (Khosrowpour 3). The success factors of BPR are illustrated below:- Communication – Communication should be such that it should not leave any doubt in the minds of the employees of the organization. Methodology – The methodology should be developed not only according to the need of the project but also considering the particulars executable by BPR. Change Management – The process of organizational change should be carried out by frequent communication and open leadership. Reengineering Team – The reengineering team should be a mix of members who have full knowledge of the process and members who do not have any knowledge about the process. Ideally a reengineering team can be customers, technology experts, stakeholders, cross functional resource and supervisor. Management Support – In order to facilitate change such as technology, business process, job roles and responsibility support of the top management is very much essential (Srinivasan 107-108). Failures of Business Process Reengineering A number of issues have been identified for the failure of Business Process Reengineering. The factors of failure are divided into five categories. The factors include change in the system of management in the organization, support from the upper management, structure of the organization, business process reengineering project management factors, infrastructure of information technology. Now the problems which exist in change of system management are communication gap, resistance from the employees, improper training and knowledge transfer and the issue related to developing a culture for adapting the change. The problems pertains to the support from upper management includes commitment & leadership from the top management and the problem related to sponsorships. The issues related to structures of the organization include allocation of job responsibilities, ineffective business process reengineering team. The project management factors are improper project planning, scheduling and monitoring. The other problems which belong to this category are unsuccessful process redesign, impractical expectations and inadequate use of consultants. The last factor is about the lack of IT infrastructure. The problems in this category are insufficient information system and the problems pertain to IT investments and outsourcing decisions. Benefits of Using Information Technology The primary advantage of using information technology in Business Process Reengineering is that it gives a competitive advantage to the organization. IT has the power to break the existing rule and can make people sense inductively. An example can be cited where ebay.com broke the rules of selling products from outlets rather they going online for selling the commodities without being physically present in the market. In undertaking the system they have redefined the meaning of business and have shown that business is also possible through the use of information technology. The added advantage of using information technology in business lies in its capability to transmit data around the world within seconds. Business houses are focusing more on IT to take advantage from it. The tool is also used for other purposes like real time monitoring, e-commerce and management information system. Apart from that Information technology is also helpful in creating unique Identity for each product through the use of bar code system. This system is very much useful in manufacturing industries. In order to implement a successful BPR, IT infrastructure plays a crucial role. To design a receptive Information system there should be appropriate determination of the business process information needs. A sound understanding of the technologies which will be used for the business process redesign is very much essential. Role of Information Technology in Business Process Reengineering The reach and application of Information technology is increasing rapidly. IT has changed the way business is carried out (Bradshaw et al. 328). There is presence of information technology almost in all the sectors of the business. Information technology can be defined as the branch of science and engineering which deals with the information, computers and telecommunication top store, retrieve and transfer the information from one part of the world to the other part. It is an integral part of a reengineering process of a company. Information technology is considered to be the key implementer of business process reengineering. According to scholars information technology should not be viewed as only the process automation tool but also as the tool which will redesign the business system. It has been also identified that Information technology and Business process reengineering enjoys a recursive relationship. In other words IT functions must support the business requirements and the business requirements are according to the IT infrastructure. Information Technology not only plays the role to automate the engineering process but also to enable the process. But sometimes IT acts as a preventer of Engineering if the organization lacks adequate IT support. Reengineering is an inductive thinking process i.e. the solution is to be generated and later the problems are needed to be identified which it can solve. The organizations have to think how a technology helps them but not the way which technology will help them in getting rid of their existing problem. Reengineering is simply about innovation i.e. by exploiting the current abilities of the technology achieve some new objectives. Based on this concept an example can be cited where Aloha Inc. announced the biggest ever project in the history i.e. to renovate their basic IT infrastructure. The project cost was around $150 million spread across 26 countries of the world. It took quite a few years to get it completed. The project was innovative and ambitious, but the objective was straightforward and clear i.e. to increase the efficiency in communication among the employees. The capabilities of IT in business process reengineering are described below:- Geographical capability – It can transfer information across the planet with very less time consumption, thereby making business independent of location. Automation capability – IT can reduce human labor to a large extent by making automated systems. Informational capability – IT has the power to fetch huge volume of information for the need of business. Tracking capability – IT has the power to track about the happenings in real time. For example the in departmental store the sales are tracked on real time and accordingly inventory requirement is generated. To a large extent it can reduce the number of intermediaries by its capacity of mass reach and through cross border communication. Table of Contents Business Process 4 Business Process Reengineering 6 Business Process Methodology 8 Success of Business Process Reengineering 11 Failures of Business Process Reengineering 12 Benefits of Using Information Technology 13 Role of Information Technology in Business Process Reengineering 13 Table of Contents 16 Reference 17 Bibliography 20 Reference Aalst, Wil Van der. Business Process Management: 3rd International Conference. US: Springer Science & Business, 2005. Print. Attaran, Mohsen. Exploring the relationship between information technologyand business process reengineering. (n.d.). Web. 27 April 2012. < http://dns2.asia.edu.tw/~psuhjw/paper/bpr-6.pdf> Balasubramanium and Radhakrishnan. Business Process Reengineering: Text and Cases. India: PHI Learning Pvt. Ltd, 2008. Print. Bradshaw et al. Using information technology to create global classrooms: Benefits and ethical dilemmas. (n.d.). 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