SIT Chapter 5: Info Systems & Digital Transformation

Enterprise Info Systems (EIS)

- Comprehensive software packages that incorporate all modules needed to run the operations o a business i.e. supply chain, CRM - vendors = SAP, Oracle - keep track of info + monitor effectiveness

Digital Business Models

- Created by managers due to digital technologies that have enabled organizations to make radical change to business processes

Enterprise Resource Planning (ERP)

- Designed to help large companies manage the fragmentation of info stored in hundreds of individual/dept/business unit computers across the organization - Can handle changing business demands --> standardized processes

Agile business processes

- Designed to simplify redesign & reconfiguration - flexible + easily adaptable to changes in the business environment (with little effort) - i.e. software development

Santa Cruz Bicycles Problem

- Designing process to manufacture bikes is harder than innovating new tech - Company designed Virtual Pivot Point suspension system to absorb shocks from rough terrain - First few prototypes failed --> motivation for complete overhaul of processes - Company got sick of computer-aided design (too long + $$) so they adopt PLM software

Supply Chain Management (SCM)

- Enterprise system that manages the integrated supply chain (linked through a single network) - Bullwhip Effect: erratic changes to demand that must be linked to stay organized

Sloan Valve Company Solutions

- Invest in enterprise system —> communication + coordination problems continue - Underlying process is what's really broken - Redesign team led by IT manager, 6 sub-processes, upgraded IS to support product life cycle - Now: increases accountability, <12 months time to market, synthesis of info has improved

Business Process Perspective (aka process perspective)

- Keeps big picture in view + allows manager to concentrate on the work that must be done to ensure optimal creation of value - helps to: avoid duplicate work, facilitate communication, optimize business processes, best serve customers / stakeholders

Key Insights

- IS can enable or impede business change = right design + right technology - Change Management: manage business & CHANGE effectively through a process POV - Focus on business processes = focus on business goals

ERP Characteristics

- Integration (Manufacturing, Accounting, HR) - Packages - Best Practices - Evolving - Some Assembly Required*

Process

- Interrelated, sequential set of activities + tasks that turns inputs into outputs - Must have a set of metrics to measure effectiveness (throughput, cycle time) - i.e. order fulfillment, manufacturing planning, payroll, procurement

Carestream Health Timeline

- Main business & IT goal = create cost-savings through simplification; consolidate apps so that business is standardized in terms of processes/systems - Adopt customer-centric approach & create target digital architecture i.e. e-commerce software - 2016: strategically change focus from cost-savings to monetizing Carestream assets it had acquired; also sold digital dental biz - Hold workshops to plan for transformation & explore Film processes in depth - Visualize processes, consultants provide recs, build storyboards

Carestream Health Now

- New local adaptation & metrics to track business - 2018: operations were turned over to business owners - 85% adoption rate, increased customer satisfaction - Carestream in a place of "competitive advantage"

Sloan Valve Company Problems

- New product development (NPD) is core & strategic but complex & slow - Ideas don't make it through —> wasted resources - Info is blocked due to structure where no one is accountable for process

Silo POV is helpful to

- Organize & optimize expertise and training - Avoid redundancy in expertise by hiring one person who can serve as multipurpose across many functions - easier to benchmark outside organizations + understand each silo's role

Santa Cruz Bicycles Solution

- PLM helps analyze + model capabilities / tracks all variables - Team can easily make adjustments due to v quick simulation to watch impact - Company hired new master frame builder to build + test prototypes in-house - Also invested in huge machine to fabricate intricate parts for prototypes (no more outsourcing) - Decrease in design-to-prototype processes (28 mo --> 12-14 mo)

Carestream Health Solutions

- Proposal for new program was refined to reflect necessary organizational redesign - Transformation that involved + impacted many depts. --> large program team created (1. program manager, 2. business program manager, 3. project manager, 4. tech lead, 5. outsourcing manager) - Initial adoption + use = disappointing, rate of 20% but why so low? Ordering + processing requirements vary in different regions of the world

Silo (Functional) Perspective

- Self-contained functional units i.e. marketing, finance - recognize that businesses operate as a set of processes that flows across functional departments - enables manager to analyze processes in regards to larger goals - gives manager insights as to how these processes may better serve goals

Enterprise System

- Set of IS tools that organizations use to enable this info flow within + between processes across the organization... ensures integration + coordination

Customer Relationship Management (CRM)

- Set of software programs that supports management activities performed to obtain, enhance relationships with, and retain customers - i.e. Salesforce, Adobe, SAP, Microsoft

*Middleware

- Software used to connect processes running in 1+ computers across a network

Product Life Cycle Management (PLM)

- Systems that automate the steps that take ideas for products & turn them into actual products - Starts with idea for a product --> "end life"

2. Total quality management (TQM)

- approach that incorporates methods of continuous process improvement - follows the "14 Points" principles to transform business processes

1. Business process re-engineering

- good for tweaking existing processes, less effective for cross-functional - goal = make a rapid breakthrough impact on key metrics - causes greater internal resistance so it must be carefully planned & only used in time crunch

Six Sigma

- incremental, highly disciplined, data-driven quality management approach for eliminating defects from a process

Silo POV is unhelpful b/c

- individual departments often recreate info maintained by other departments - wide communication gaps between departments - problems due to handoffs between silos - lose sight of overall organization's objective —> lose business effectiveness

Dynamic business processes

- reconfigure themselves as they "learn" and businesses utilize them - i.e. a network with a changing flow of data needs dynamic IT applications

Workflow

- series of connected tasks + activities performed by people and computers that together form the business process - also: software products that document & automate processes (help answer q's)

Business Process Management (BPM)

- systems that provide a way to build, execute, + monitor automated processes that are intelligent, dynamic, + may cross organizational boundaries - offers many design + management capabilities

Workflow diagram

- tool used to understand a business process - shows picture or map of the sequence and detail of each process step —> understand and communicate

2 techniques to transform static business processes

1. Radical process redesign 2. Incremental, continuous process improvement