Technology and Business Management - Maersk Line - Case Study Example

Technology and Business Management of the affiliation with information about affiliation, research grants, how tocontact.Abstract As a consequence of the improvements in the business management area the business performance management ( BPM) appears nowadays as very developed practice . Related to this practice are the automation, standardization and real-time analysis. Therefore is important to choose the right tools and technology in order to meet the BPM goals. This article aims to evaluate how the information technology enables the BPM process. In the first part is presented the definition of BPM and its road-map. After is presented the definition of information technology . By introducing the main characteristics of the IT is shown how IT can enable the BPM. Finally will be presented a real case-study of a BPM solution implementation. Technology and Business Management Today’s organizations are confronted with the need of improving the business management. Under these conditions, the traditional management approaches that focus on financial figures are being substituted for new and more developed practices. The performance is related to the efficiency of an organization to meet their goals. With the evolution it´s expected to develop practices that reduce the errors by improving standardization and automation of the activities. The Business Performance Management appears as a very developed approach. It’s important to understand how the technology can enable this practice. The choice of the proper tool and technology in a BPM solution is critical to the success of the operation. The improvements related to the information technologies seems to serve and meet the BPM goals. The main purpose of this article is to prove how IT enables the BPM. How the report will achieve the purpose? The report will provide a summary of BPM definition and goals; After will be presented the BPM road-map in order to prove how closely the BPM process is within the automation process; After proving this, is presented the IT definition; After is shown how the IT and BPM converges into similar lines; Finally is presented a case-study. Business Performance Management ( BPM) A business process is a set of activities which are defined in order to reach a specific organizational goal. The Business performance management (BPM) is a systematic approach of the Business management. The main goals of BPM are: reduce human error and miscommunication, focus stakeholders on the requirements of their roles and on making an organizations workflow more effective, more efficient and more capable of adapting to an ever-changing environment. In general BPM is developed within three types of frameworks: Vertical, Horizontal and Full-service BPM. Horizontal BPM is related to the the development of business process and the technology application. On the other hand the Vertical BPM is focused on coordinating of a specific set of activities. The Full-service BPM deals with five basic tasks: process discovering, process modeling, business procedures, workflow and finally testing. BPM is several times linked within the information technology(IT) and it has increased the demand for IT services. The concern with the business process optimization is not recent. It has been developed since the industrial revolution. In the last decade the notion of business process optimization is intrinsically related to the BPM. The BPM provides flexible business process therefore the business process became dynamic and adaptable when confronted with changes. The BPM is a powerful tool for an organization. It promotes the continuous operational improvement and the cost reduction cost through continued process improvement and automation. The main difference between BPM and traditional process management approaches is the focus on customer value. The main goals of a BPM solution are related to the optimization and automation of the process outcomes, the rapid response to a business event, delivery ( in real-time) new solutions. Theses goals are usually achieved by modeling and simulation. BPM solutions are mostly related to IT. All the BPM process could be orchestrated through IT and the cost could be reduced by the IT automation. Yet BPM solutions could deliver without IT enablement. In order to analyze and measure the IT importance in a BPM solution is critical to understand the BPM roadmap. BPM Roadmap The main goal of a BPM Roadmap is to design a plan focused on preparing the business process for automated management. Oracle published a guide to creating a BPM roadmap. In this guide the BPM roadmap is defined in four main phases: Current State Assessment, Future Vision Definition, Gap Analysis, and Activity Selection & Scheduling. The current state assessment is the first phase and its main goal is to define in a consist scale the current state focused on capabilities important to BPM . For this stage Oracle gives an important tool: the Oracle BPM Maturity Model. The Future Vision Definition phase is important to define the main purpose and reasons for the BPM program. After the definition of the Future Vision is important to measure the difference between the the current state and the future vision for each of the capabilities. The Gap Analysis phase is the appropriate stage to make that evaluation. The next and final phase is the Activity Selection & Scheduling phase. At this phase the main goal is to plan the work . The purpose is the logical definition of the activities in order to reach the Future Vision from the Current state. The outputs for all these phases are defined in the oracle guidance. In the first phase is defined a maturity and adoption score for each of the capabilities in the BPM Maturity Matrix. The output related to the second phase is the overall goal of the initiative, the scope of the initiative, the expected benefits, and the guiding principles to achieve the goal and the benefits. During the Gap Analysis phase provides the understanding about which assets and capabilities are enablers of the BPM success. The last stage provides a detail plan of activities from the current stage till the future vision. The BPM roadmap main goal is to reach the success of the BPM implementation. Information technology Kathleen Guinee defined information technology, “By information technology, I mean the tools we use to perform calculations, to store and manipulate text, and to communicate. Some of these twentieth century tools include: the adding machine, slide rule, and calculator for performing calculations, the typewriter and word processor for processing text, and the telephone, radio, and television for communicating.” (www.cs.princeton.edu/~kguinee/thesis.html) Information technology is the technology used to store, manipulate, distribute or create information. In the last decades the development of the information technologies is huge and it modified the society, the communication, the way of connecting people and the business sector. Intrinsically related to the IT and BPM is the Enterprise Application Integration (EAI). EAI is an integrated support of business processes by addressing the information systems inside of and across enterprises. The benefits and the main reasons to choose the EAI are related to the improvement of the efficiency and effectiveness of business processes, creation of new business processes by connecting existing information systems and save the investment in existing systems. IT as a BPM enabler How the IT appears as an enabler of the BPM conception? Florian Melchert and Robert Winter in their article “The Enabling Role of Information Technology for Business Performance Management” studied the BPM process in based on a large-scale cooperation project of a business school and five large service companies. With this research Melchert and Winter defined the connection between the BPM and IT. They found three lines of convergence with the mail goals of a BPM conception: Business process automation, Real-time analytics and process performance management. In a BPM analysis the Business process automation is one of the main goals. The BPM main purpose is to connect process design to application integration services. This purpose enables the automation of business process implementation and allow for the execution of workflows that involve multiple heterogeneous applications. The use of EAI promotes the automation process by reducing the manual task and by increasing process model as a workflow design. The real-time analytics in a BPM conception promotes the fast response to a business event, the reduction of time in decision support, and the reduction of the time needed to take a good decision in the business management. The IT enables the real-time analytics by the use of data whare-house systems, operational data store, EAI platforms. The use of the IT tools improves the automating certain decisions replacing the manual process. Therefore the design of a decision engine could replace in certain situation the manual decision taking based on workers, business rules and notifies people for conducting further actions (White 2002). The process performance management provides rapidly the identification of process improvement. It enables the comparison between as-is and to-be process models. In order to make it order two mechanisms are needed: a mechanism for measuring process performance and a mechanism for efficient analysis the process results. Kueng and Krahn recommend a model to reach from a process model to a process performance management system. (Kueng, Krahn 1999). One relevant step of this model is the definition of performance indicators and process goals for each process that is to be analyzed (e.g. Österle 1995). The IT enable the integration of these indicators within a platform which promotes the use of those indicators in a standardized format. The purpose of the second mechanism is to transform the business results into further actions for improvements of the process design. Improvements are possible when the process model is refined by a design-automation-analysis cycle. Therefore the IT appears as a enable of this process by the use of special tools, examples: ARIS toolset and a special purpose process data warehouse (ARIS PPM, cf. IDS Scheer AG 2002). Case study – Maersk Line Maersk Line is the world‟s largest ocean carrier. They are represented all over the world with over 325 offices in 125 countries. The company has 25,000 employees and operates with 600 vessels. The port calls a year is estimated around 65,000 and the revenues in 2010 were around $26 billion. The goals related to the BPM implementation were: standardisation of work, reducing human factor on the emails and communication and improving the efficiency in the business process. The BPM tool chosen was Oracle‟s BPM Suite. The implementation of the BPM programme was made using a platform and more focused on the development of the automation capabilities than on simulation. Yet the team was attending the simulation of operational performance and opportunities for improvement. Another topic of concern was the standards related to the integration of systems within the company. The critical challenges related to the implementation of the BPM programme were related to the heritage IT investment practices at the company, to the integration infrastructure technologies and architecture practice and to the engagement of stakeholders. In the past there was no practice related to centrally co-ordinated process in Maersk Line. Therefore it increases the difficulty of finding the best way to approach standardisation, simplification and improvement of processes. The main recommendations of the Maersk Line‟s BPM programme team are related to the: . Delivery time: is not recommended a delivery time for a BPM solution longer ( something within 90 days in order to keep employees and stakeholders motivated); . Localization of business and technology; . Selection of the right technology for the business and its specific rules; This case study shows in practice the recommendations and challenges of the business and technology engagement. Discussion and Conclusions This paper aimed to show how the information technology enables the improvement of business management. The Business Process Management is a business management practice which is very focused on the improvement of the business process, on the standardizations and on the automation of the activities. This process begins with the road-map BPM design. It was shown that the main goals of a BPM solution are related to the automation of business process, real-time analytics and process performance management. The developments in the IT market meets perfectly the BPM needs. The IT solutions appear as an enabler of a new management concept like BPM. Is critical to have a clear understanding of the organizational processes, and the main goals of the BPM in order to choose and design properly the information technology. This understanding begins with the BPM Road-Map conception. In the first part of the article the BPM and the Road-Map conception is discussed from a management perspective. The second part of the article defines information technology and shows how it can enable a BPM solution. Finally was presented a case-study. This case study is related to the Maersk Line BPM solution showing the main challenges and relating the main recommendations of the BPM team. References Jensen, T., Cline, O., Owen, M. (2011), Combining Business Process Management and Enterprise Architecture for Better Business Outcomes, IBM. Kueng, Peter, Krahn, Adrian (1999) Building a Process Performance Measurement System: some early experiences. Journal of Scientific & Industrial Research, 58, 3/4 (March/April). Linthicum, D. S. (2000) Enterprise Application Integration. Reading, Massachusetts. Melchert, F., Winter, R. (2004), The Enabling Role of Information Technology for Business Performance Management, Institute of Information Management, Switzerland. Österle, H. (1995) Business in the Information Age - Heading for New Processes, Springer, New York. Ward-Dutton, N., (2011), BPM case study: Maersk Line, MWD Advisors. White, Colin (2002). Intelligent Business Strategies: Near Real-Time and Automated Decision Making, DMReview. Wilkins, M., (2010), Creating a BPM Roadmap, Oracle. Read More