MIS Chapter 5

Incremental Change- TQM and Six Sigma

TQM: Outline set of activities for increasing quality and improving productivity Six Sigma: Incremental, data driven quality management approach for eliminating defects from a process.

Changing process to fit IT, changing IT to fit process?

*Don't change unless offering competitive advantage* - The enterprise system sometimes should drive business process redesign when: > Just starting out. > Organizational processes are not relied upon for strategic advantage. > Current systems are in crisis. - It is inappropriate for the enterprise system to drive business process redesign when: > Changing an organization's processes that are relied upon for strategic advantage. > The package does not fit the organization. > There is a lack of top management support.

Business Process Standardization

- High: The business has centralized design with high needs for reliability, predictably, and sharing data across business units, creating a single view of the process - Low: The business is focused on process standardization in which tasks are done the same way with the same systems across business units, but the business units have little need to interact.

Business Process Integration

- High: The business is focused on process integration, usually creating a single face to customers and suppliers but does not usually impose process standards on operating units - Low: Business has a decentralized design with which business units make local decisions on processes to meet customer needs

Adv/Disadv of Enterprise Systems

Advantages: - Represent "best practices" - Modules throughout the organization communicate with each other - Enable centralized decision-making - Eliminate redundant data entry - Enable standardized procedures in different locations Disadvantages: - Enormous amount of work - Require redesign of business practices for maximum benefit - Require customization if special features are needed - Very high cost - Sold as a suite, not individual modules - Requires extensive training - High risk of failure

Agile vs Dynamic

Agile: Processes that repeat through a constant renewal cycle of design, deliver, evaluate, redesign, and so on. - Designed to simplify redesign and reconfiguration Dynamic: Reconfigure themselves as they "learn" and the business utilizes them - Changing flow of data IT is required to pull this off well because the more processes that can be done with software, the easier it is to change, and more likely it can be designed to be agile or dynamic.

Product life cycle management

Automates the steps that take ideas for products and turn them into actual products.

Production Line Management (PLM)

Automates the steps that take ideas for products and turn them into actual products.

Enterprise information systems (EIS)

Comprehensive software packages that incorporate all modules needed to run the operations of a business.

Enterprise Resource Planning

Designed to help large companies manage the fragmentation of information stored in hundreds of individual desktop, department, and business unit computers across organization.

Radical Process Design- Business Process Reengineering (BPR)

Goal is to make a rapid, breakthrough impact on key metrics

Throughput

How many outputs can be produced per unit time

Six sigma

Incremental data-driven quality management approach for eliminating defects from a process.

Business Process Perspective

Interrelated, sequential set of activities and tasked that turns inputs into outputs.

Process

Interrelated, sequential set of activities and tasked that turns inputs into outputs.

Process Perspective

Keeps big picture in view and allows the manager to concentrate on the work that must be done to ensure the optimal creation of value.

Supply Chain MGT (SCM)

Manages the integrated supply - Processes are linked across companies - The single network optimizes costs and opportunities for all companies in the supply chain - Every part of the supply chain has the latest information about sales expected and inventories from source materials at all stages - Bullwhip effect occurs when the supplier at each stage adds a small "buffer" for its suppliers in case demand is higher than expected

Supply Chain Management (SCM)

Manages the integrated supply chain

Customer Relationship MGT (CRM)

Natural extension of applying the value chain model to customers - Includes management activities performed to.. >Obtain, enhance relationships with, and retain customers - Can lead to better customer service, which leads to comp adv - Common systems: > Oracle > SAP > Salesforce.com (web-based cloud system) > Oracle and SAP integrate into their ERP systems

Total Quality Management (TQM)

Outline set of activities for increasing quality and improving productivity.

Agile Business Processes

Processes that repeat through a constant renewal cycle of design, deliver, evaluate, redesign, and so on.

Silo perspective

Self-contained functional units such as marketing, operations, finance, and so on.

Workflow

Series of connected tasks and activities performed by people and computers that together form a business process.

Enterprise Systems

Set of informational systems tools that many organizations use to enable this information flow within and between processes across the organization. - Include ERP, SCM, CRM, PLM

Customer Relationship Management (CRM)

Set of software programs that supports management activities performed to obtain, enhance relationships with, and retain customers.

Workflow diagram

Shows a picture or map pf the business process sequence and detail of each process step.

Silo Perspective vs Business Process Perspective

Silo: Self-contained functional units such as marketing, operations, finance - Functional - Highlighting and developing core competencies; functional efficiencies - Redundancy of information throughout the organization; cross-functional inefficiencies; communication problems Business Process Perspective: Interrelated, sequential set of activities and tasks that turns inputs into outputs - Cross-functional - Optimizes on organizational goals, "big picture" - Avoiding work duplication and cross-functional communication gaps; organizational effectiveness - Difficult to find knowledgeable generalists; sophisticated software needed

Middleware

Software used to connect processes running in one or more computers across a network

Cycle Time

Time it takes for entire process to execute

Business Process Reengineering

Viewing the business as set of business processes rather than using a silo perspective.

Business Process Management

Well-defined and optimized set of IT processes, tools, and skills.