1

Business Process
Change
DISCUSS THE IMPORTANCE DESCRIBE THE FACTORS DESCRIBE THE IMPACT OF
OF PERFORMING BUSINESS DRIVE A BUSINESS PROCESS BUSINESS PROCESS
PROCESS CHANGE TO CHANGE CHANGE IN AN
ORGANIZATION
 ▪ A modification to a company's
existing business process.
▪ These changes are designed to
improve the performance and
productivity of a company.

WHAT IS ▪ Example 1:
▪ When one company merges with

BUSINESS another company, it usually requires

a significant business process

PROCESS
change. Typically, the parent
company already has different
business processes like sales,
CHANGE? accounting, and human resources,
which must be implemented by the
merger organization.
▪ Example 2:
▪ When a company hires a new
management team with a specific
mandate or goals to achieve.
▪ Market /Customer shift
demand
▪ Global competitiveness
▪ Technology
▪ Change of company’s
direction
▪ Problem solving
▪ Improve productivity,
quality, efficiency and
effectiveness
 ▪ An effective business process
change can be executed based on
the following consideration:
▪ An organization-wide effort involving
everyone from senior managers to
BUSINESS junior employees, i.e. creating
awareness
PROCESS ▪ Comprehensive, enterprise-wide
business process architecture,
CHANGE- WHAT ▪ Process measures that are aligned
ARE THE with company strategies i.e. the
attributes and standards applied
CONSIDERATIONS ▪ An ongoing management effort that
continually monitors processes and
introduces improvements,
▪ A common vocabulary that everyone
can use to describe and understand
business process change.
 THE PORTER’S VALUE CHAIN

Support
processes

Primary
processes

The goal of these activities is to offer the customer a level of value that
exceeds the cost of the activity, resulting in a profit
 Support Processes
Primary Processes
Business activities that
help support the day-
Business activities that
to-day operation of the
are directly related to
business (indirectly
the manufacture of
contribute to
products or delivery of
manufacturing of
service
product and delivery
of service)
 THE PORTER’S VALUE CHAIN
Primary Activities Description
Inbound Logistics Receiving, storing, and disseminating inputs to
products
Operations Transform inputs into the final product
Outbound Logistics Collecting, storing, and physically distributing the
products to buyers. E.g. transport and delivery
Marketing and Sales Inducing buyers to purchase the products and
providing a means for them to do so
Service Assisting customer’s use of the product and thus
maintaining and enhancing the product’s value. E.g.
Helpdesk

Source: Kroenke, D,M. (2010)

Experiencing MIS, 2nd Edition
Pearson
BUSINESS PROCESS- VALUE CHAIN

Example 2 : Revised Value Chain System (source: Google)

How the technology trigger the changes?
▪ Scenario 1: Manufacturing industry
▪ Electricity was introduced in the manufacturing
environment to replace steam engines.
▪ No immediate/major change to current
infrastructure
▪ However, the invention of electric motor had
caused some changes to the building but not to
productivity improvements.
▪ Why?
▪ Because the building and machines were still
designed in the same manners.
▪ After 40 years, the productivity started increasing.
▪ Lesson: the technology did not cause the
changes to occur but allow the changes to take
place
▪ Manufacturing –
▪ the actual production process has been
reevaluated and redesigned
▪ The processes were redesigned to gain
benefits of the technology
▪ Due to this, productivity and quality were
increased, and costs were decreased
▪ Focus on process, not product.
▪ 1960s- computers were introduced to
business world.
▪ More than 40 years later- computers
were replacing processes either
previously done manually or by
mechanical machines (e.g., Typewriter)
▪ The functions or processes have not
changed but the technology has just
been applied to it.
IT = AN ENABLER
 Scenario: Office environment
 Today, secretary uses computer to prepare
letters while manager still recite/read letter
manually as before.
 The secretary still types the letter, print it and
send a copy for the manager to review.
 Lesson: replacing a typewriter with a
computer does not contribute to productivity
improvement but the flow of the business
communication process must be reevaluated
 This includes
 the office arrangement,
 procedures, and
 all related matters needs to be reevaluated
accordingly.
 Ex. Purchase requisition forms in a system
 ▪ Processes may take place in every
functional area such as:
▪ Document preparation
▪ Business communication
▪ Problem solving
▪ Decision making

OFFICE WORKS ▪ Order processing

▪ Strategic planning and etc.

& PROCESSES ▪ It can be defined in 2 dimensions:

▪ Ability to reproduce functions or tasks
▪ The level of frequency (daily, weekly and
annually)
▪ A clear definition of office processes is
essential to identify the problem.
 PRODUCTIVITY OF WORKERS
▪ In manufacturing
▪ Manual processes were automated,
the results:
Number of sales
▪ Minimize costs
▪ Increase productivity
▪ Increase quality
▪ Increase accuracy
▪ Because over the years, the business
processes may HAVE CHANGED
▪ Technology enables
processes to change in
order to increase
productivity.
▪ In the office environment-
It is difficult to have the
same impact as most of the
processes and procedures
are still the same.
▪ What need to be done?
 MOLDING FUTURE MANAGEMENT
The past
 Formal training
 To control current processes
 Do not question
management’s decision
 Do not question the user’s
requirements or needs
 On-the-job training
 Learn the way things are
done
 Learning by example
 Risk taking is not encouraged
Today/The future
 Formal training
 How to analyze current
process
 How to gather information
 To understand the rational
behind the users’ requests
 On-the-job training
 Learn to critically assess the
processes and procedures,
 Investigate any possible
alternative
 Learning by example
 Failure must be tolerated
 Risk taking is encouraged
 ▪ Procedures and processes developed in
an organization - to cope with internal and
external changes.
▪ Procedures that were developed in the
past - may not be necessary or applicable
anymore.

PRESSURES ▪ Among the reasons - automate or enhance

the existing processes (reduce money and
time)
ON TODAY’S ▪ However, it is not advisable for the

ORGANIZATION unstable foundations of old systems.

▪ Thus, the following questions need to be
asked:
▪ Should we need this service or perform
this process?
▪ Do we need this procedure?
▪ Could we provide this services in a
different /better manner?
 ▪ Do you know the axiom of “garbage in-
garbage out?
▪ The existing systems (manual
procedures and process) that are
automated without a close
investigation on how the technology
can increase the effectiveness and
efficiency of the processes will result
BUILDING ON with similar constraints and limitations
in the new system
OLD SYSTEMS ▪ Many organization automate or update
computer programs based on obsolete
procedures and processes-
assumptions: the written programs still
applicable.
▪ May not valid anymore as technology
rapidly changed, regulations changed
etc.
 ▪ The impact of automating current
systems
▪ Major concern: Payback
▪ Is it worth the effort?
▪ Major considerations involved
with legacy systems. What is a
THE IMPACT OF legacy system?
▪ Most of the automation issues :
AUTOMATING either to update the systems or
CURRENT automating manual processes
SYSTEMS ▪ Legacy systems are expensive to
maintain and difficult to modified.
▪ How to analyze legacy systems?
▪ Concentrate on what not how.
▪ Look how the current system is
designed
▪ Ex. Purchase requisition process
 ▪ Definitions of business
process
▪ Provide a few scenarios to :
▪ Understand the organizations’
situation
▪ Focus should be on the
SUMMARY processes not the products
▪ Solve the problems not the
symptom
▪ Discuss the reasons for
business process to change
 Any
Questions?