Information Technology and Business Process Modelling

Question : For this report, you are to critically evaluate and write about the business reengineering experience on an information system redesign project. In doing so, you will emphasise on its key functions and business processes, organisational structure and culture and analysis and design approaches. For the main body of the report, you are advised to incorporate the four part structure outlined below: Part 1: Processes, Organisational Structure and Redesign Some points to consider are: Organisational background Functional units and processes Organisational structure and design Need for redesign Project vision Part 2: Project Goals, Structure and Staffing Some points to consider are: Project goals Project scope Project structure and staffing Part 3: Process Analysis and Design Some points to consider are: Process analysis Role of request for proposal Process design and rectifications Measuring progress/benchmarks Part 4: Potential Risk Management and Challenges Some points to consider are: Dealing with failure and external IT firms Barriers and enablers of effective process analysis and design Lessons learnt and path for future The points above are used as examples and should not limit you in your reasoning and critical analysis. Improvements, based on any identified shortcomings, should be provided in the Conclusion section of your report. Answer : Introduction BPR or Business Process Reengineering is the process through which an organization can achieve significant changes in business performance. The changes will be in time, cost, service and quality of service. A wide range of tools, techniques, methods, best practices are related in the BPR process. (Johansson, et al., 1994) In the following part of this report project management aspects of BRP in organizations will be explored. A case study of a larger government organization will be used for discussion in the rest of the report. Part 1: Processes, Organizational Structure and Redesign In this part of the report, there will be discussions on the background of the organization, organizational structure, the functional units and processes. These will help to understand the need for redesign and vision of the project. Organisational Background This report is based on the case study of a large quasi government organisation and the business process redesign for process of delivering compensation and benefits to the employees of the organisation. The organisation under consideration is one of the biggest employer from United States. The process to be redesigned has more than 800,000 employees from different locations in the US. The organisation structure was quite complicating. There were 5 senior vice presidents in the organisation. Under the vice presidents there were 10 area vice presidents. Under them, there were 85 district managers and there were more levels of functional managers in the organisation. The size and span of the organisation was really giant and spanned over the country. There were a number of field offices under the district offices. The skills and expertise of the employees were ranged from degrees from high schools to post doctorates from various Ivy League schools. Thus there were different levels of employees. The company was very much focused in advocating promotions from within the company and existing employee base. Their proactive approach in this case gave promotions of the employees to higher level staffing jobs faster. The most complex matter was communication across the levels in the organisation structure. The headquarters were responsible for issuing different policies. Before getting distributed among the field offices, the policies were needed to go through 2 managerial levels in between. As a result, when delivered to the field offices, the information used to become old news. Even sometimes, instead of the original information or policy, just a summary was delivered to the field offices from the district offices and other in between management level. Headquarters and filed offices were not synchronised at all and each used to suspect another for any problem. (Mehdi Khosrowpour;, 2006) Functional units and processes The business process that has been considered in this report is, the process of delivering compensation and benefits to the employees of the company. There were almost 12 separate functional units in the process of compensation and benefit delivery. There were 4 main functional components of the process. Those are, The processes The systems for measurement and management Different structures and jobs Beliefs and values of the organization Any process of an organization or business needs to get aligned with the strategies of the business. In general, for any organization, workforce management is very important for the survival of the business. Compensation and benefits are tools for managing workforce effectively. An effective compensation process should have the following attributes, The remuneration should be based on contribution to the organization or the business. The program should be designed in such a way that it attracts more talent and that will help the organization to grow and excel. The motivations of the staffs should be retained to get the best from them Compensation process is a basic need for that. Compensation structure and process promotes equality of the employees at workplace. The process should efficient for the administration. There should be a reward valued structure in the organizational behavior. Finally there should be compliances to the legal aspects. An efficient and good compensation program should have a balance among all these factors. A company must be aware that the compensation program is aligned and linked with the organizational culture and objective of the company and the program is able to motivate the employees based on different standards set on their performances. The components of compensation and benefits process of any company should have subsets of the following components. Organisational structure and design Typically a hierarchical structure representing the authorities, right, communication, duties etc. of an organization, is called organizational structure. It also represents how power is allocated to different designations in an organization, how different roles and responsibilities are assigned to different persons. The flow of information through different levels of management is also represented in an organization structure. The strategies and objectives of an organization are reflected through a centralized structure where the top level management is responsible for the decision making tasks. They have total control over the divisions and sub-divisions following it. In some cases decentralized organization structure is also possible, where the power of decision making is distributed among the departments. Some of the departments may have some level of freedom. However, in the organization under consideration, the organizational structure is hierarchical. There are senior vice presidents, vice presidents, district officers and area officers. The organizational chart is given below, If it is looked closely, then the organization chart shows that the area offices are divided into several district offices and field offices. It the done by following a divisional structure. The functional areas of the organization have been divided into divisions. These divisions have their own resources and work independently to some degree. These divisions are created based on the geographical areas. There are total 10 area offices and 80 district offices. Need for redesign There were a bunch of benefits and compensation programs for the employees. Under the benefits program there were six parts and under the compensation program there were many. Under benefit program, there were plans like cafeteria plan, health coverage for the individuals and family of the employees, thrift spending account, retirement accounts and many. Most of the plans were not in use for many years. All of these plans were available for employees from all levels in the organization. The redesigning and reengineering process was for 13 programs. This was needed to be done within a very short period of time, as considered to be completed within 12 weeks. The processes were working in a very inefficient manner. There were lack of communication, lack of usage of technology, slower and time consuming, poor people management etc. Thus a redesign was very much needed. Project vision The vision of the project was to reengineering 13 business processes under benefits and compensation program within the 12 weeks time span. The reengineered process was supposed to be more aligned with the business process, faster and able to provide values across the business. Part 2: Project Goals, Structure and Staffing In this part of the report the goals of the project, project structure and staffing for the project will be discussed. Project goals The goals of the project was, Delivering better service to the employees for benefits and compensation program. Making the process faster. Eliminating redundant processes and modules. Delivering same services across the geographically separated sites. Building better communication. Project scope The scope of the project was building a better benefit and compensation program for the employees of the organization, accelerating the growth of the organization, helping then to make better ROI, building better strategies and win over the competitors. Project structure and staffing The project was supposed to follow 3 stage methodology of redesigning the process. The steps were, investigate, innovate and redesign. After formation of the project team, the team was supposed to document the current processes and then decide on some out of the box ideas. Then based on those ideas, the team needed to improve the processes in such a way that the business would be able to maximize benefits from the improved processes. Then there should be an implementation plan for the reengineering process. The in-house reengineering methodologies were being used in the process. There were two parts of the project team. One team from the consultancy appointed for the project. And another company team consisting of employees from different level and area offices of the organization. The company team members were mainly subject matter experts and had almost no idea about reengineering process. On the other hand the consultant team members were experienced in reengineering process and were highly qualified. Two different offices were responsible for selecting the team members from different domains. The selection process were also different. The office that manages the process of employee compensation and benefits, selected the company team members. On the other hand, the consultancy that was contracted for facilitation of the reengineering process, selected the consultancy team members. There was a three step process in selecting the consultancy team members. The steps are, Offer the solicitation. Submission of proposal Interview by the contracting officer. All team members from the consultant team possessed masters degree or higher degrees. The project leader on the team possessed a doctoral degree in organizational behavior. There were two more team members in the consultancy team. One had a masters degree in human resource and another had the same in management. On the other hand the team selection process for the company team was different. There were more steps followed in the selection process. The steps were, Participation of sponsors for solicitation. Awaiting responses. Taking interviews of prospective applicants Arrangement of the begin date and duration in details. Accommodation arrangement Sending acknowledgement letters to the selected candidates and their managers. From the very beginning the process was difficult. Request for selection was forwarded to all area offices. From all area and district offices only 7 employees applied. In a two stage process, the final selection had only 3 of them. A project leader was selected from these three. All three were subject matter experts for the process being reengineered. They had a varying educational background. The highest educational background of the company team members was college degree. Two of the members, one having the college degree worked in same level and had same responsibility at work. Another member worked at lower level and has lesser responsibility. So there is a huge gap between the company team and the consultancy team. The levels of skills, responsibility and expertise was different and that made bad impact on the project. So, the project team was combination of the company and consultancy teams. Other than the project team there was management team. Management team had people like sponsoring organization, contracting officer, and many interested people from information technology, legal, labor union, payroll and accounting sections of the organization. Part 3: Process Analysis and Design In this part of the report, there will be discussions on analysis of the process, role of the RFP or Request for Proposal, design and rectification of the process, measurement or benchmarking of progress etc. Process analysis The process under consideration was the process of delivering compensation and benefit programs to the customers. It was necessary to visit the local sites to understand the whole process, local viewpoints etc. the project team was divided into groups and divided the sites into three geographical location based categories. Those categories are, North and north east West and North West South and south east. On sites each of these categories the team visited to collect data. Initially, the objective of the visit was to understand the process and finding out the best practice from these sites. Then modifying it and implementing the same. This was useful to shorten the delivery time of the project. However, the process did not turn out to be that much beneficial as there was lack of synchronization among the team. Each of the sub teams did not followed same process for process analysis and data collection. Only one sub team used computerized method for this purpose. Others just used transcriptions and it was hard to work faster from these collections and information base. A business consists of several processes. Analysis of any business process helps a business to improve its activities and functional areas, reduce cost, efficient resource allocation, better customer service etc. Process reengineering is closely related to it. Process analysis gives ample scope to rethink about the process, modify it and making it more valuable. (Grover, et al., 1995) Technology is important here. It helps to automate some parts or the whole process analysis part by using streamlining method or automation. A business process analysis also helps to understand where application of technology will be useful. Possible outputs of a business process analysis can be, Understanding of the process as a model called AS-IS Understanding of the improvement in the process as a model called TO-BE. Definitions for the suppliers and customers. Understanding of the governance and ownership of the process Impacts from the process Impacts of organization on the process Impact on the system due to the process Risks associated with the process Types of impacts from the risks Levels of impacts from the risks Expected outcomes from a business process reengineering of a process. Functionality of a business process This diagram represents functionalities of the business process, its relation to the project and reengineering. The AS-IS model is focused on the current process, its activities etc. It defined the structure of the process. There are several standards for defining the structure of a process. Then the TO-BE part of the diagram represents the project of reengineering the process and the outcomes and impacts. The impacts of a process are identified and analyzed during process analysis. Then those are documented for future reference. The size of the project decided the ASIS and TO-BE models of a business process. The impacts are then studied further during the project of reengineering the business process starts. Those are then documented in the scope document. Scope document is a documentation about the requirements and expectation of the stakeholders. Information systems provide support to a process analysis project. Before implementation of any such automation tools in the business process analysis, it is needed to be understood first and then documenting the same in the requirement document. Role of request for proposal Request for proposal or RFP is an important solicitation for a project. It is a documentation about the bidding by a company that is interested in the project. It provides an outline to the cost, duration and other aspects of the project. Thus the organization or project sponsors can decide on the RFPs from several companies that are interested in the project. A RFP defined the minimum requirement for the project. It helps in feasibility study of the project. An RFP includes the following information in any case, Information for the suppliers who may be interested in making a deal with the organization and will provide their best efforts in the project. The details provides by the company about what they want to procure. The requirement analysis process is needed to be done before creating an RFP. Then the requirements can be easily incorporated into the RFP document. It informs the suppliers or consultancies about the criteria of the selection process for bidding. It informs the suppliers that their responses should be factual and follow some criteria posed by the organization. A structured evaluation process details that will be followed in the selection process. Process design and rectifications Process design and rectification is involved with designing a new business process from scratch. Or as it says, thinking about designing the process from a whole new perspective. In the redesign process including rectification the business process will be designed around the people, information technology and systems. (Jeston Nelis, 2014) The objectives of design of process are, Designing flexible, responsive and streamlined process. Elimination of any activity that is not productive and has no positive impact on the process. Improvement in the collaboration. Improved utilization of the resources, specially the scarce resources. Improvement in decision making activities and better and stronger synergy. There may be more than one antiquated processes and methods in a business process. As in the case study of the quasi-government agency, benefits and compensation process, there were many methods and processes that were never used. Application of latest technology can make those process improved and faster. It can eliminate redundant parts from those processes. Integration of technology with BPR or Business Process Reengineering is a common issue. But before implementation of any technology it should be evaluated to understand whether that is suitable for the business or can improve the business process. Business Process Reengineering is very crucial for a business. The industry is becoming competitive day by day. For survival in the industry a business needs to reengineer its processes as and when required. Some of the compelling factors towards business process reengineering is, Elimination of the steps from the business process that does not add any value. Exploitation of inherent parallelism in the system, if anything such exists. Check for validation first and as early as possible to grab an opportunity. Shorten the distance between the requirements of a customer and satisfaction of the customer. Gather information as early as possible. Track progress all time. Elimination of problems like black holes, bottlenecks etc. Measuring progress/benchmarks There are different types of measurements to the improvements of a process from business process reengineering. Those are, Type 1 The focus of this measurement is the reduction in overall cost from the BPR. It evaluates improvement of the process in terms of cost reduction. Type 2 It is focused on achieving parity or best in classes. This is a competitive measurement process. Type 3 This measurement process searches for the breakpoints in the core business processes, then it writes down the rules for evaluating the same. On the other hand, benchmarking is basically finding out the best practice that will give better performance from the process. There are different kind of benchmarking available. Those are, Benchmarking for performance This category of benchmarking will find suitable candidates for studying the benchmarking evaluation. Benchmarking for process This category of benchmarking will depend on best practices from the industry. Depending on the structure of the organization there are three types of benchmarking. Those are, internal, generic or functional and competitive benchmarking. Internal benchmarking will compare the business process to similar business processes in the same organization. Generic or functional benchmarking will compare the business process with the same in some standard and international company beyond industry or within the same industry. Competitive benchmarking will compare the process against the toughest competitor or international companies within the same industry. (O'Neill Sohal, 1999) Benchmarking Process Benchmarking is a step by step process including the following steps. Organization This is the first step toward benchmarking. In this step the process of benchmarking gets organized. The buy in from management is obtained. It communicates about educating the concepts of benchmarking. The planning for overall benchmarking process is done. All concerns and fears about the benchmarking is addressed. Preparation for benchmarking In this step the preparation for benchmarking is done. The processes that need benchmarking, are identified. Then a benchmarking team is established. It needs to understand the existing process. Finally the metrics for benchmarking is determined. Research on benchmarking Research on benchmarking will help in uncovering the details on who performs same processed, the best performer, what are the useful information needed etc. Selection of an organization for benchmarking In this step a relationship is needed to be established with the organization for benchmarking. Then an exchange agreement will be created. Collection of data and information In this step data and information are collected from visits to sites, interviews, documents, third parties etc. There should be proper planning of collection of those data. Analysis and adoption of the process In this step all related activities for analysis and adoption of the process will be done. The data and information collected from the previous step will be compared. The gaps between the processes will be determined. The goals will be established. Then improved processed will be designed further. Improvements will be estimated. Implementation of new process This is the final step in the benchmarking process. The new process will be implemented in this step. There are various related processes to the implementation process. The staffs who will be affected by this process are needed to the trained. Then trial and error method will be used during implementation. The results from the implementation will be monitored. The results will be adjusted and adopted. Finally the whole new implemented process will be adopted. Part 4: Potential Risk Management and Challenges In this part, it will discuss about the risks management and related challenges in BPR and in relation to the BPR process in the government agency. Dealing with failure and external IT firms As it was clear from the case study of the BPR process in the large government process that BPR processes are involved with high risks if not carried out properly. BPR process is more than mere changes in the business process. It brings radical changes. The factors behind success or failure of BPR process are, Commitment to the project from whole organization BPR process directly affects the people and their roles in the business. Job is important to any employee. A common fear is about losing the job due to BRP. So, employees become resistant to any BPR process easily. As, it has been seen, there were lack of commitment from the whole organization. Another change in the business process early to the BRP process had led to cut down of employment in the same organization. Thus the employees were naturally reluctant to any other change in the organization. Some of the employees did take part in the project only to secure their jobs. There were lack of participations from the employees selected as project team member. They did not took the project seriously. Lack of dedication in the BRP management team is a stepping stone towards failure. (Langer, 2012) Composition of the BPR team The BPR team is like the nucleus of the project team. Utmost care should be taken while building the BPR team. The team will be responsible to take decisions on behalf of the organization. There are various deterministic factors to be considered while building BPR team, The team members should have competency and motivation. They should be enough credible and creative within the organization. There should be processes like empowerment of the team, training, brainstorming sessions and process mapping. The team leadership should be efficient. The organization of the team should be well balanced. The team members should have complementary skills. So that they can take cross functional roles and make the project a success. A well-built BPR team should have members from top management, different business processes, technical groups, finance etc. and end users. The knowledge and skills of the team members must be mixed with various depths covering the requirements of the BRP project. But in the larger government BRP process case, it has been seen that the team was not well balanced. There were lack of communication, co-ordination, skill, technical abilities etc. thus the team was not efficient. The root of the problem is inefficient selection of team by the company. Analysis of the requirement of business process In many cases it has been seen that the organizations just starts the BPR even without understanding and evaluating the requirements and processes. This should not be the case. A basic project pan for the BRP project consisting of the following at minimum should be there. Identification of different problem areas Solidification of different goals Definition of the objectives of the business It is the responsibility of the business to help the BRP team in reengineering the business processes, help them in setting priorities and focus on the related areas to determine the efforts for delivering improvements. If there is lack of alignment in the BRP and the strategies of the organization then that can lead to failure. The core competency of the company must be considered. Otherwise the whole reengineering process will be a waste. Without alignment with the strategies of the business the sponsors and key stakeholders of the business may find themselves out of focus of the business. (Altinkemer, et al., 2011) As, in the government project, there were no participation from the employees around all sites, there were lack of alignment with objectives and strategies. Without considering all requirements the duration of the project was set to some unrealistic number that made the project team confused and under tremendous pressure. Availability of adequate Information technology infrastructure Information technology infrastructure is important in BRP processes. It is a very important part of successful BRP project. Some of the factors of successful IT infrastructure are, Proper and efficient alignment of the strategies of BRP and IT infrastructure. Creation of an efficient IT infrastructure. Proper IT infrastructure is an investment. Integration of the information systems. Improved competency of the IT functions. Use of the software tools effectively. (Tsai, 2003) Efficient change management process Change management involves changes in the social and human factors related to the BRP project. An irony is, there are chances of resistance against a BRP process from the group of users who will be the ones with most benefits from the process. Organization culture is another important factor behind success or failure of a project. The ability of adopting the changes from a BRP process comes from the organization culture. Continuous improvement process BRP is actually an ongoing and successive process. This is a strategy to implement improvement to an organization whenever required. That should be understood. External IT firms As information technology is important, so external IT firms plays significant roles in BRP in different organizations. External IT firms provide support for databases, expert systems, decision support tools, telecommunication networks, high performance computing etc. Other than there are ERP vendors like SAP, Oracle, PeopleSoft, JD Edwards etc. they are prominent players in the IT field related to the BRP in organizations. (Attaran, 2004) Barriers and enablers of effective process analysis and design The barriers are enablers of the BRP processes are listed below, (Muthu, et al., 2006) The enablers are, Good management Well-built BRP teams Realistic project plan Dedication and commitment of the team members and from the whole organization. Proper IT infrastructure Consistency in the process. Synchronization between the management and the project team.etc. On the other hand, the barriers are, Lack of support from top level management. Setting unrealistic project goal Inefficient project planning Lack of understanding of the requirements of the project. Poor selection of the project team. Inefficient or no implementation of IT.etc. Lessons learnt and path for future A lot of lessons have been learnt from this project of BRP in large government agency. The summary of the learnings are, Business process reengineering is more than changing a part of the system. It has many socio, economic impacts on the lives of the people associated with the process, values and ROI of the organization etc. Effective team building, organizational structure and culture are important. Organizational structure and cultures build values among the employees. Team building becomes easier when the organization culture is good. Dedication and commitment from the organization and the employees from all levels are important for BRP project. Lack of enthusiasm kills a BRP project. As a BRP project is closely related to innovation, so enthusiasm and new ideas are very much needed. Appointing same people in BRP projects again and again restricts the scopes of the project because they will try to see the system from same viewpoint. Process analysis is very much important. Before analysis the process and requirement, the project plan should not be created. Otherwise it may end up in setting unrealistic milestones and goals. Planning and uncovering every aspects of the BRP project through brainstorming sessions is necessary. IT is an important part for such projects. But without understanding the IT requirements clearly, the implementation should not be done. Conclusion In this report, it has covered several aspects of business process reengineering project management. A case study of a large governmental agency has been considered for the project. In part 1 of the report various organizational aspects related to such projects have been discussed. There is also details of the case study. In part 2 the project scope, visions etc. are discussed. 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