1 the importance of business processes

8/9/2019 1 the Importance of Business Processes

1/17

Chapter 14

IT and Business

Processes


2/17

14-2

Introduction


3/17

14-3


4/17

14-4

Questions

What is the impact of business process change on ITimplementation


5/17

14-!

14"2 The Importance of BusinessProcesses

Companies with mature business processeshave lower inventory levels

Improvements in certain areas demand ITinvestmentsBICS companies with mature processesachieve superior financial performance

Investing only in IT infrastructure leads tosignificant inefficiencies Priority in IT investments depends on yourobjectives


6/17

14-#

Characteristics of the $e%el ofBusiness &aturit'

Based on the (C)* modelConsists of four stages

+isconnected processes

Internal integrationIntra-Compan' integration and limited e,ternalintegration&ulti-enterprise integration


7/1714-

(C)* $e%el I

+isconnected Processes&an' independent processes")rgani.ed functionall' /ith no or lo/ degree ofintegration"

(uppl' chain planning t'picall' done for eachsite independentl' of other sites"Characteristics0

unctional silo strategies"$ac of clear5 consistent suppl' chain managementprocesses"6o measurements5 or measurements not aligned /ithcompan' ob7ecti%es"


8/1714-8

(C)* $e%el II

Internal Integration)rgani.ed functionall'5 /ith a high degree ofintegration"+ecisions made through the integration of e'functional areas"Common forecasts applied throughout theorgani.ation"Characteristics0

Integration of some functional information"+ocumented processes follo/ed across the entireorgani.ation"9e' measurements that are used departmentall'"


9/1714-:

(C)* $e%el III0 Intra-Compan' Integrationand $imited ;,ternal Integration

Cross-functionall' organi.ed"In%ol%es e' suppliers and customers indecision ma ing processes"

Characteristics0+ecisions optimi.ed across the internal suppl' chain"(ophisticated processes that in%ol%e all affectedinternal organi.ations"9e' suppliers and customers are included in suppl'chain planning"


10/1714-1e,tensi%e

no/ledge of the suppliers and customersbusiness en%ironments"Collaboration lin s trading partners and enablesthem to operate as one %irtual corporation"Characteristics0

Collaboration across the entire suppl' chain"Internal and e,ternal collaborati%e suppl' chainmanagement focus on e' ser%ice and financialgoals"&easures directl' lin suppl' chain results tocompan' goals"


11/1714-11

our Categories of IT ('stemsLevel I

Batch processes5 independent s'stems and redundantdata across the organi.ation"ocus on spreadsheet and manual manipulation of

data for decision ma ing"Level II

(hared data across the suppl' chain"+ecisions made using planning tools

Level III:Complete %isibilit' of internal data

9e' suppliers and customers ha%e access to some ofthis dataProcesses are also shared across the suppl' chain

Level I+ata and processes are shared internall' and

e,ternall'"


12/1714-12

?reas of P*T& +ata CollectionStrategic Planning 0 6et/or design5 In%entor' positioning

and &anufacturing strateg'!emand Planning 0 +emand forecasts and PromotionalplanningSupply Planning 0 Coordination of manufacturing5in%entor' and transportation acti%ities across the suppl'

chainSupply"!emand Balancing 0 Trade off bet/een supplierscapabilit' and customer demand are considered@ Pricingand promotional acti%ities are applied s'stematicall' tobetter match suppl' and demand

Procurement Planning 0 &aterials and commoditiessourcing strateg'#anufacturing Planning 0 (ingle site %s" ;nterprise /idestrateg'@!elivery Planning 0 Commitments to customers are based

on forecast5 a%ailable capacit'5 or real-time in%entor' andmanufacturing information"


13/1714-13

Companies /ith &ature BusinessProcesses Aa%e $o/er In%entor' $e%els

I *; 14-10 #ature"process companies have improved on inventoryperformance$ BICS companies that are process mature perform even better%


14/1714-14

Impro%ements in Certain ?reas+emand IT In%estments

I *; 14-20 &n"time delivery' fill rate level' and order"fulfillment lead time


15/1714-1!

BIC( Companies /ith &ature Processes ?chie%e (uperior inancial Performance

I *; 14-30 Process and systems maturity and financial performance


16/1714-1#

In%esting )nl' in IT Infrastructure$eads to (ignificant Inefficiencies

I *; 14-40 Impact of investment in IT infrastructure


17/1714 1

Priorit' in IT In%estments +ependson Dour )b7ecti%es

I *; 14-!0 Lin(ing processes and systems with operations andfinancial performance

1 the importance of business processes

Documents