Chapter 8: Business Processes

Business Process

A series of tasks that are completed in order to accomplish a goal; Focused on achieving a goal for business.

International Standards Organization (ISO)

Defines quality standards that organizations can implement to show that they are managing business processes in an effective way. Ex: ISO 9000 is focused on quality management.

How does an ERP system enforce best practices in an organization?

ERP systems drive consistency of processes across different locations and departments within an organization.

What are some of the benefits of BPM?

Employee empowerment Built-in reporting Enforces best practices Enforces consistency

What is the value in documenting a business process?

Ensures control over organizational activities Embeds consistency into a process Allows for standardization Presents a training tool for new performers

Business Process Management (BPM)

Intentional effort to plan, document, implement and distribute an organization's business processes using IT.

Why did BPR suffer a bad reputation in some organizations?

It was used as an excuse for cost-cutting that had nothing to do with BPR.

Document Management System

Manages process documentation Versions and timestamps Approvals and workflows Communication

What guidelines does Hammer provide for business process reengineering?

Organize around outcomes, not tasks. Have those who use the outcomes perform the process. Subsume information-processing work into real work that produces the information. Link parallel activities instead of integrating their results. Put the decision points where the work is performed, and build controls into the process. Capture information once, at the source.

What was the philosophy of Michael Hammer in his 1990 Harvard Business Review article, "Reengineering Work: Don't Automate, Obliterate"?

Simply automating a bad process does not make it better. He argued that companies should "blow up" existing processes & develop new ones that take advantages of new technologies.

Enterprise Resource Planning (ERP)

Software application with a centralized database that can be used to run an entire company. Ex: SAP, Microsoft, Oracle

What are some challenges with ERP systems?

They commoditize business processes, driving all businesses to use the same processes and thereby lose their uniqueness. Companies must ensure they are automating best practice processes. Customization and managing/maintaining those customizations.

What is BPR and what are the ultimate goals of it?

To fully understand the goals of process To dramatically redesign it To achieve dramatic improvements in productivity & quality