ManagementSci

ence Uni
t-
VI

Uni
t6-Cont
empor
aryManagementPr
act
ices

ConceptofMI
S
Amanagementi
nfor
mat
ionsy
stem (
MIS)i
sani
nfor
mat
ionsy
stem usedf
ordeci
sion
-
maki
ng,andf
ort
hecoor
dinat
ion,cont
rol
,anal
ysi
s,andv
isual
i
zat
ionofi
nfor
mat
ion
i
nanor
gani
zat
ion.Thest
udyofmanagementi
nfor
mat
ionsy
stemsexami
nespeopl
e,
pr
ocessesandt
echnol
ogyi
nanor
gani
zat
ionalcont
ext
.Inacor
por
ateset
ti
ng,t
he
ul
ti
mat
egoaloft
heuseofamanagementi
nfor
mat
ionsy
stem i
stoi
ncr
easet
he
v
alueandpr
ofi
tsoft
hebusi
ness.

Thef
oll
owi
ngar
ety
pesofi
nfor
mat
ionsy
stemsusedt
ocr
eat
erepor
ts,ext
ractdat
a,
and assi
sti
nthe deci
sion maki
ng pr
ocesses ofmi
ddl
e and oper
ati
onall
evel
manager
s.

Deci
sionsuppor
tsy
stems(
DSS)ar
ecomput
erpr
ogr
am appl
i
cat
ionsusedby
mi
ddl
eandhi
ghermanagementt
ocompi
l
einf
ormat
ionf
rom awi
der
angeof
sour
cest
osuppor
tpr
obl
em sol
vi
nganddeci
sionmaki
ng.ADSSi
susedmost
ly
f
orsemi
-st
ruct
uredandunst
ruct
ureddeci
sionpr
obl
ems.

Execut
ivei
nfor
mat
ion sy
stems (
EIS)i
sar
epor
ti
ng t
oolt
hatpr
ovi
des qui
ck
accesst
osummar
izedr
epor
tscomi
ngf
rom al
lcompanyl
evel
sanddepar
tment
s
suchasaccount
ing,
humanr
esour
cesandoper
ati
ons.

Mar
ket
ingi
nfor
mat
ionsy
stemsar
emanagementI
nfor
mat
ionSy
stemsdesi
gned
speci
fi
cal
l
yformanagi
ngt
hemar
ket
ingaspect
soft
hebusi
ness.

Account
ingi
nfor
mat
ionsy
stemsar
efocusedaccount
ingf
unct
ions.

Humanr
esour
cemanagementsy
stemsar
eusedf
orper
sonnel
aspect
s.

Of
fi
ceaut
omat
ionsy
stems(
OAS)suppor
tcommuni
cat
ionandpr
oduct
ivi
tyi
nthe
ent
erpr
isebyaut
omat
ingwor
kfl
ow andel
i
minat
ingbot
tl
enecks.OASmaybe
i
mpl
ement
edatanyandal
ll
evel
sofmanagement
.

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ManagementSci
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VI

School
Inf
ormat
ionManagementSy
stems(
SIMS)cov
erschool
admi
nist
rat
ion,
of
teni
ncl
udi
ngt
eachi
ngandl
ear
ningmat
eri
als.
Ent
erpr
iser
esour
cepl
anni
ng(
ERP)sof
twar
efaci
l
itat
est
hef
low ofi
nfor
mat
ion
bet
weenal
lbusi
nessf
unct
ionsi
nsi
det
heboundar
iesoft
heor
gani
zat
ionand
managet
heconnect
ionst
oout
sidest
akehol
der
s

Local
Dat
abases,
canbesmal
l
,si
mpl
i
fiedt
ool
sformanager
sandar
econsi
der
ed
t
obeapr
imal
orbasel
evel
ver
sionofaMI
S.

Ent
erpr
iseAppl
i
cat
ions

Ent
erpr
isesy
stems—al
soknownasent
erpr
iser
esour
cepl
anni
ng(
ERP)sy
stems
—pr
ovi
dei
ntegr
atedsof
twar
emodul
esandauni
fi
eddat
abaset
hatper
sonneluse
t
opl
an,
manage,
andcont
rolcor
ebusi
nesspr
ocessesacr
ossmul
ti
plel
ocat
ions.
Modul
esofERP sy
stemsmayi
ncl
udef
inance,account
ing,mar
ket
ing,human
r
esour
ces,
product
ion,
inv
ent
orymanagement
,anddi
str
ibut
ion

Suppl
ychai
nmanagement(
SCM)sy
stemsenabl
emor
eef
fi
cientmanagementof
t
hesuppl
ychai
nbyi
ntegr
ati
ngt
hel
i
nksi
nasuppl
ychai
n.Thi
smayi
ncl
ude
suppl
i
ers,
manuf
act
urer
s,whol
esal
ers,
ret
ail
ers,
andf
inal
cust
omer
s

Cust
omerr
elat
ionshi
pmanagement(
CRM)sy
stemshel
pbusi
nessesmanage
r
elat
ionshi
pswi
thpot
ent
ialandcur
rentcust
omer
sandbusi
nesspar
tner
sacr
oss
mar
ket
ing,
sal
es,
andser
vice

Knowl
edge management sy
stem (
KMS) hel
ps or
gani
zat
ions f
aci
l
itat
ethe
col
l
ect
ion,r
ecor
ding,or
gani
zat
ion,r
etr
iev
al,anddi
ssemi
nat
ionofknowl
edge.
Thi
s may i
ncl
ude document
s,account
ing r
ecor
ds,unr
ecor
ded pr
ocedur
es,
pr
act
ices,andski
l
ls.Knowl
edgemanagement(
KM)asasy
stem cov
erst
he
pr
ocessofknowl
edgecr
eat
ionandacqui
sit
ionf
rom i
nter
nalpr
ocessesandt
he
ext
ernal
wor
ld.Thecol
l
ect
edknowl
edgei
sincor
por
atedi
nor
gani
zat
ional
pol
i
cies
andpr
ocedur
es,
andt
hendi
ssemi
nat
edt
othest
akehol
der
s.

Adv
ant
ages

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ManagementSci
ence Uni
t-
VI

 I
mpr
oveanor
gani
zat
ion'
soper
ati
onal
eff
ici
ency
,addv
aluet
oexi
sti
ngpr
oduct
s,
engenderi
nnov
ati
onandnewpr
oductdev
elopment
,andhel
pmanager
smake
bet
terdeci
sions.
 Compani
esar
eabl
etoi
dent
if
ythei
rst
rengt
hsand weaknessesduet
othe
pr
esenceofr
evenuer
epor
ts,empl
oyees'per
for
mancer
ecor
det
c.I
dent
if
ying
t
hese aspect
s can hel
p a company i
mpr
ovei
ts busi
ness pr
ocesses and
oper
ati
ons.

 Gi
vi
nganov
eral
lpi
ctur
eoft
hecompany
.

 Act
ingasacommuni
cat
ionandpl
anni
ngt
ool
.

Theav
ail
abi
l
ityofcust
omerdat
aandf
eedbackcanhel
pthecompanyt
oal
i
gni
ts
busi
nesspr
ocessesaccor
ding t
otheneedsofi
tscust
omer
s.Theef
fect
ive
managementofcust
omerdat
a can hel
pthe company t
o per
for
m di
rect
mar
ket
ingandpr
omot
ionact
ivi
ti
es.

MI
Scanhel
pacompanygai
nacompet
it
iveadv
ant
age.

 MI
Srepor
tscanhel
pwi
thdeci
sion-
maki
ngaswel
lasr
educedownt
imef
or
act
ionabl
eit
ems.

Di
sadv
ant
ages
 Ret
ri
eval
anddi
ssemi
nat
ioni
sdependantont
echnol
ogyhar
dwar
eandsof
twar
e.

 Pot
ent
ial
fori
naccur
atei
nfor
mat
ion.

ConceptofMRP
Mat
eri
alr
equi
rement
spl
anni
ng(
MRP)i
sacomput
er-
basedi
nvent
orymanagement
sy
stem desi
gnedt
oassi
stpr
oduct
ionmanager
sinschedul
i
ngandpl
aci
ngor
der
sfor
i
temsofdependentdemand.Dependentdemandi
temsar
ecomponent
soff
ini
shed
goods—suchasr
awmat
eri
als,componentpar
ts,andsubassembl
i
es—f
orwhi
cht
he
amountofi
nvent
oryneededdependsont
hel
evelofpr
oduct
ionoft
hef
inalpr
oduct
.
Forexampl
e,i
napl
antt
hatmanuf
act
uredbi
cycl
es,dependentdemandi
nvent
ory
i
temsmi
ghti
ncl
udeal
umi
num,
tir
es,
seat
s,andbi
kechai
ns.

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ManagementSci
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MRP was expanded t

oincl
ude i
nfor
mat
ion f
eedback l
oops so t
hatpr
oduct
ion
per
sonnelcoul
dchangeandupdat
ethei
nput
sint
othesy
stem asneeded.Thenext
gener
ati
onofMRP,knownasManuf
act
uri
ngResour
cesPl
anni
ngorMRPI
I,al
so
i
ncor
por
ated mar
ket
ing,f
inance,account
ing,engi
neer
ing,and human r
esour
ces
aspect
sint
othepl
anni
ngpr
ocess.MRPi
susedt
ogener
atemat
eri
alr
equi
rement
s
and hel
p pr
oduct
ion manager
s pl
an capaci
ty.MRP I
Isy
stems of
ten i
ncl
ude
si
mul
ati
oncapabi
l
iti
essomanager
scanev
aluat
evar
iousopt
ions.

Thei
nfor
mat
ioni
nputi
ntoMRPsy
stemscomesf
rom t
hreemai
nsour
ces:abi
l
lof
mat
eri
als,amast
erschedul
e,andani
nvent
oryr
ecor
dsf
il
e.Thebi
l
lofmat
eri
alsi
sa
l
i
sti
ngofal
lther
aw mat
eri
als,componentpar
ts,subassembl
i
es,andassembl
i
es
r
equi
redt
opr
oduceoneuni
tofaspeci
fi
cfi
nishedpr
oduct
.Eachdi
ff
erentpr
oduct
madebyagi
venmanuf
act
urerwi
l
lhav
eit
sownsepar
atebi
l
lofmat
eri
als.Thebi
l
lof
mat
eri
alsi
sar
rangedi
nahi
erar
chy
,sot
hatmanager
scanseewhatmat
eri
alsar
e
neededt
ocompl
eteeachl
evelofpr
oduct
ion.MRP usest
hebi
l
lofmat
eri
alst
o
det
ermi
net
hequant
it
yofeachcomponentt
hati
sneededt
opr
oduceacer
tai
n
numberoff
ini
shedpr
oduct
s.Fr
om t
hisquant
it
y,t
hesy
stem subt
ract
sthequant
it
y
oft
hati
tem al
readyi
ninv
ent
oryt
odet
ermi
neor
derr
equi
rement
s.

Themai
nout
put
sfr
om MRP i
ncl
udet
hreepr
imar
yrepor
tsandt
hreesecondar
y
r
epor
ts.Thepr
imar
yrepor
tsconsi
stof
:pl
annedor
derschedul
es,whi
chout
li
net
he
quant
it
yandt
imi
ngoff
utur
emat
eri
alor
der
s;or
derr
eleases,whi
chaut
hor
izeor
der
s
t
obemade;andchangest
opl
annedor
der
s,whi
chmi
ghti
ncl
udecancel
l
ati
onsor
r
evi
sionsoft
hequant
it
yort
imef
rame.Thesecondar
yrepor
tsgener
atedbyMRP
i
ncl
ude:per
for
mancecont
rolr
epor
ts,whi
char
eusedt
otr
ackpr
obl
emsl
i
kemi
ssed
del
i
ver
ydat
esandst
ockout
sinor
dert
oev
aluat
esy
stem per
for
mance;pl
anni
ng
r
epor
ts,whi
ch can be used i
nfor
ecast
ing f
utur
einv
ent
oryr
equi
rement
s;and
except
ionr
epor
ts,whi
chcal
lmanager
s'at
tent
iont
omaj
orpr
obl
emsl
i
kel
ateor
der
s
orexcessi
vescr
apr
ates.

Adv
ant
ages&Di
sadv
ant
ages
Themai
nbenef
it
sincl
udehel
pingpr
oduct
ionmanager
stomi
nimi
zei
nvent
oryl
evel
s
andt
heassoci
atedcar
ryi
ngcost
s,t
rackmat
eri
alr
equi
rement
s,det
ermi
net
hemost
economi
call
otsi
zesf
oror
der
s,comput
equant
it
iesneededassaf
etyst
ock,
all
ocat
e

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ManagementSci
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pr
oduct
iont
imeamongv
ari
ouspr
oduct
s,andpl
anf
orf
utur
ecapaci
tyneeds.

Ther
eisal
arger
angeofpeopl
einamanuf
act
uri
ngcompanyt
hatmayf
indt
heuse
ofi
nfor
mat
ionpr
ovi
dedbyanMRPsy
stem v
eryhel
pful
.Pr
oduct
ionpl
anner
sar
e
obv
ioususer
sofMRP,asar
epr
oduct
ionmanager
s,whomustbal
ancewor
kloads
acr
ossdepar
tment
sandmakedeci
sionsaboutschedul
i
ngwor
k.

Pl
antf
oremen,r
esponsi
blef
ori
ssui
ng wor
kor
der
sand mai
ntai
ning pr
oduct
ion
schedul
es,al
sor
elyheav
il
yonMRPout
put
.Ot
heruser
sincl
udecust
omerser
vice
r
epr
esent
ati
ves,
whoneedt
obeabl
etopr
ovi
depr
oject
eddel
i
ver
ydat
es,
pur
chasi
ng
manager
s,andi
nvent
orymanager
s.

MRPsy
stemsal
sohav
esev
eral
pot
ent
ial
drawbacks.Fi
rst
,MRPr
eli
esuponaccur
ate
i
nputi
nfor
mat
ion.I
fasmal
lbusi
nesshasnotmai
ntai
nedgoodi
nvent
oryr
ecor
dsor
hasnotupdat
edi
tsbi
l
lsofmat
eri
alswi
thal
lrel
evantchanges,i
tmayencount
er
ser
iouspr
obl
emswi
tht
heout
put
sofi
tsMRPsy
stem.

Thepr
obl
emscoul
drangef
rom mi
ssi
ngpar
tsandexcessi
veor
derquant
it
iest
o
schedul
edel
aysandmi
sseddel
i
ver
ydat
es.Atami
nimum,anMRPsy
stem must
hav
eanaccur
atemast
erpr
oduct
ionschedul
e,goodl
ead-
ti
meest
imat
es,
andcur
rent
i
nvent
oryr
ecor
dsi
nor
dert
ofunct
ionef
fect
ivel
yandpr
oduceusef
uli
nfor
mat
ion.

Anot
herpot
ent
ial
drawbackassoci
atedwi
thMRPi
sthatt
hesy
stemscanbedi
ff
icul
t,
t
imeconsumi
ng,andcost
lyt
oimpl
ement
.Manybusi
nessesencount
err
esi
stance
f
rom empl
oyeeswhent
heyt
ryt
oimpl
ementMRP.

ConceptofJI
T
Just
-i
n-t
ime (
JIT)i
nvent
orysy
stem i
s a managementst
rat
egyt
hatal
i
gns r
aw
mat
eri
alor
der
sfr
om suppl
i
ersdi
rect
lywi
thpr
oduct
ionschedul
es.Compani
esuse
t
hisi
nvent
oryst
rat
egyt
oincr
easeef
fi
ciencyanddecr
easewast
ebyr
ecei
vi
nggoods
onl
yast
heyneedt
hem f
ort
hepr
oduct
ionpr
ocess,whi
chr
educesi
nvent
orycost
s.
Thi
smet
hodr
equi
respr
oducer
stof
orecastdemandaccur
atel
y.Just
-i
n-t
ime(
JIT)
manuf
act
uri
ngi
sal
soknownast
heToy
otaPr
oduct
ionSy
stem (
TPS)becauset
he
carmanuf
act
urerToy
otaadopt
edt
hesy
stem i
nthe1970s.

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ManagementSci
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Thesuccessoft
heJI
Tpr
oduct
ionpr
ocessr
eli
esonst
eadypr
oduct
ion,hi
gh-
qual
i
ty
wor
kmanshi
p,nomachi
nebr
eakdowns,
andr
eli
abl
esuppl
i
ers.

Exampl
e-Toy
otai
sfamousf
ori
tsi
mpl
ement
ati
onofaJI
Tinv
ent
orysy
stem.Toy
ota
or
der
spar
tsonl
ywheni
trecei
vesnewor
der
sfr
om cust
omer
s.Thecompanyst
art
ed
t
hismet
hodi
nthe1970s,andi
ttookov
er15y
ear
stoper
fect
.Sev
eralel
ement
sof
JI
Tmanuf
act
uri
ngneedt
ooccurf
orToy
otat
osucceed.Thecompanymusthav
e
st
eadypr
oduct
ion,hi
gh-
qual
i
tywor
kmanshi
p,nomachi
nebr
eakdownsatt
hepl
ant
,
r
eli
abl
esuppl
i
ers,
andqui
ckway
stoassembl
emachi
nest
hatassembl
ethev
ehi
cles.

Adv
ant
ages
JI
Tinv
ent
orysy
stemshav
esev
eraladv
ant
agesov
ert
radi
ti
onalmodel
s.Pr
oduct
ion
r
unsar
eshor
t,whi
chmeanst
hatmanuf
act
urer
scanqui
ckl
ymov
efr
om onepr
oduct
t
oanot
her
.Thi
smet
hodr
educescost
sbymi
nimi
zi
ngwar
ehouseneeds.Compani
es
al
sospendl
essmoneyonr
awmat
eri
alsbecauset
heybuyj
ustenoughr
esour
cest
o
maket
heor
der
edpr
oduct
sandnomor
e.

Di
sadv
ant
ages
Thedi
sadv
ant
agesofJI
Tinv
ent
orysy
stemsi
nvol
vedi
srupt
ionsi
nthesuppl
ychai
n.
I
far
aw mat
eri
alssuppl
i
erhasabr
eakdownandcannotdel
i
vert
hegoodsont
ime,
t
hatsuppl
i
ercanshutdownt
heent
ir
epr
oduct
ionpr
ocess.Asuddenunexpect
ed
or
derf
orgoodsmaydel
ayt
hedel
i
ver
yoff
ini
shedpr
oduct
stocl
i
ent
s.

ConceptofTQM
Tot
alQual
i
tyManagement
,TQM,
isamet
hodbywhi
chmanagementandempl
oyees
canbecomei
nvol
vedi
nthecont
inuousi
mpr
ovementoft
hepr
oduct
ionofgoodsand
ser
vices.I
tisacombi
nat
ionofqual
i
tyandmanagementt
ool
sai
medati
ncr
easi
ng
busi
nessandr
educi
ngl
ossesduet
owast
efulpr
act
ices.TQM i
samanagement
phi
l
osophyt
hatseekst
oint
egr
ateal
lor
gani
zat
ionalf
unct
ions(
mar
ket
ing,f
inance,
desi
gn,engi
neer
ing,andpr
oduct
ion,cust
omerser
vice,et
c.)t
ofocusonmeet
ing
cust
omerneedsandor
gani
zat
ional
obj
ect
ives.

Thesi
mpl
eobj
ect
iveofTQM i
s“Dot
her
ightt
hings,r
ightt
hef
ir
stt
ime,ev
eryt
ime.
”

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ManagementSci
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TQM i
sinf
ini
tel
yvar
iabl
eandadapt
abl
e.TQM canbeapower
fult
echni
quef
or
unl
eashi
ngempl
oyeecr
eat
ivi
tyandpot
ent
ial
,reduci
ngbur
eaucr
acyandcost
s,and
i
mpr
ovi
ngser
vicet
ocl
i
ent
sandt
hecommuni
ty.

Pr
inci
plesofTQM
1.
Focusoncust
omer

Whenusi
ngTQM,i
tisofcr
uci
ali
mpor
tancet
oremembert
hatonl
ycust
omer
s
det
ermi
net
hel
evelofqual
i
ty.What
everef
for
tsar
emadewi
thr
espectt
otr
aini
ng
empl
oyeesori
mpr
ovi
ngpr
ocesses,onl
ycust
omer
sdet
ermi
ne,f
orexampl
ethr
ough
ev
aluat
ionorsat
isf
act
ionmeasur
ement
,whet
hery
ouref
for
tshav
econt
ri
but
edt
othe
cont
inuousi
mpr
ovementofpr
oductqual
i
tyandser
vices.
2.
Empl
oyeei
nvol
vement
Empl
oyeesar
eanor
gani
zat
ion’
sint
ernalcust
omer
s.Empl
oyeei
nvol
vementi
nthe
dev
elopmentofpr
oduct
sorser
vicesofan or
gani
zat
ion l
argel
ydet
ermi
nest
he
qual
i
tyoft
hesepr
oduct
sorser
vices.Ensur
ethaty
ouhav
ecr
eat
edacul
tur
einwhi
ch
empl
oyeesf
eel
theyar
einv
olv
edwi
tht
heor
gani
zat
ionandi
tspr
oduct
sandser
vices.
3.
Processcent
ered
Pr
ocesst
hinki
ng and pr
ocesshandl
i
ng ar
ea f
undament
alpar
toft
otalqual
i
ty
management
.Pr
ocesses ar
ethe gui
ding pr
inci
ple and peopl
e suppor
tthese
pr
ocessesbasedonbasi
sobj
ect
ivest
hatar
eli
nkedt
othemi
ssi
on,v
isi
onand
st
rat
egy
.
4.
Int
egr
atedsy
stem
Fol
l
owi
ng pr
inci
ple Pr
ocess cent
ered,i
tisi
mpor
tantt
o hav
e an i
ntegr
ated
or
gani
zat
ionsy
stem t
hatcanbemodel
l
edf
orexampl
eISO 9000oracompany
qual
i
tysy
stem f
ort
heunder
standi
ngandhandl
i
ngoft
hequal
i
tyoft
hepr
oduct
sor
ser
vicesofanor
gani
zat
ion.
5.
Str
ategi
candsy
stemat
icappr
oach
A st
rat
egi
cpl
anmustembr
acet
hei
ntegr
ati
onandqual
i
tydev
elopmentandt
he
dev
elopmentorser
vicesofanor
gani
zat
ion.

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ManagementSci
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6.
Deci
sion-
maki
ngbasedonf
act
s
Deci
sion-
maki
ngwi
thi
ntheor
gani
zat
ionmustonl
ybebasedonf
act
sandnoton
opi
nions(
emot
ionsand per
sonali
nter
est
s).Dat
a shoul
d suppor
tthi
sdeci
sion-
maki
ngpr
ocess.
7.
Communi
cat
ion
Acommuni
cat
ionst
rat
egymustbef
ormul
atedi
nsuchawayt
hati
tisi
nli
newi
tht
he
mi
ssi
on,v
isi
onandobj
ect
ivesoft
heor
gani
zat
ion.Thi
sst
rat
egycompr
isest
he
st
akehol
der
s,t
hel
evelwi
thi
ntheor
gani
zat
ion,t
hecommuni
cat
ionschannel
s,t
he
measur
abi
l
ityofef
fect
iveness,
timel
i
ness,
etc.
8.
Cont
inuousi
mpr
ovement
Byusi
ngt
her
ightmeasur
ingt
ool
sandi
nnov
ati
veandcr
eat
ivet
hinki
ng,cont
inuous
i
mpr
ovementpr
oposal
swi
l
lbei
nit
iat
edandi
mpl
ement
edsot
hatt
heor
gani
zat
ion
candev
elopi
ntoahi
gherl
evel
ofqual
i
ty.
Asuppor
ti
ngTot
alQual
i
tyManagementt
oolt
hatcoul
dbeusedi
stheDemi
ngcy
cle
(
Plan-
Do-
Check-
Act
)ort
heDMAI
Cpr
ocess.
ManagementCommi
tmentPl
an(
dri
ve,
dir
ect
);

Check(
rev
iew)
;

Act(
recogni
ze,
communi
cat
e,r
evi
se)

Do(
depl
oy,
suppor
t,par
ti
cipat
e);

St
epsf
orManagi
ngaTr
ansi
ti
oni
ntoanewsy
stem ofTQM -
I
dent
if
yingt
askst
obedone
Cr
eat
ingnecessar
ymanagementst
ruct
ures
Dev
elopi
ngst
rat
egi
esf
orbui
l
dingcommi
tment
Desi
gni
ngmechani
smst
ocommuni
cat
ethechange
Assi
gni
ngr
esour
ces
ConceptofSi
xsi
gma
Thewor
d Si
gmai
sast
ati
sti
calt
erm t
hatmeasur
eshow f
aragi
venpr
ocess
dev
iat
esf
rom per
fect
ion.

Thecent
ral
ideabehi
ndSi
xSi
gma:
Ify
oucanmeasur
ehowmany"
def
ect
s"y
ouhav
e

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ManagementSci
ence Uni
t-
VI

i
napr
ocess,y
oucansy
stemat
ical
l
yfi
gur
eouthow t
oel
i
minat
ethem andgetas
cl
oset
o"zer
odef
ect
s"aspossi
bleandspeci
fi
cal
l
yitmeansaf
ail
urer
ateof3.
4
par
tspermi
l
li
onor99.
9997%per
fect
.

Feat
uresofSi
xSi
gma:
 Si
xSi
gma'
sai
mist
oel
i
minat
ewast
eandi
nef
fi
ciency
,ther
ebyi
ncr
easi
ng
cust
omersat
isf
act
ionbydel
i
ver
ingwhatt
hecust
omeri
sexpect
ing.
 Si
xSi
gmaf
oll
owsast
ruct
uredmet
hodol
ogy
,andhasdef
inedr
olesf
ort
he
par
ti
cipant
s.

 Si
xSi
gmai
sadat
adr
ivenmet
hodol
ogy
,andr
equi
resaccur
atedat
acol
l
ect
ionf
or
t
hepr
ocessesbei
nganal
yzed.

 Si
xSi
gmai
saboutput
ti
ngr
esul
tsonFi
nanci
alSt
atement
s.

 Si
xSi
gmai
sabusi
ness-
dri
ven,
mul
ti
-di
mensi
onal
str
uct
uredappr
oachf
or−

o I
mpr
ovi
ngPr
ocesses

o Lower
ingDef
ect
s

o Reduci
ngpr
ocessv
ari
abi
l
ity

o Reduci
ngcost
s

o I
ncr
easi
ngcust
omersat
isf
act
ion

o I
ncr
easedpr
ofi
ts

 Cr
it
ical
toQual
i
ty−At
tri
but
esmosti
mpor
tantt
othecust
omer
.

 Def
ect−Fai
l
ingt
odel
i
verwhatt
hecust
omerwant
s.

 Pr
ocessCapabi
l
ity−Whaty
ourpr
ocesscandel
i
ver
.

 Var
iat
ion−Whatt
hecust
omerseesandf
eel
s.

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ManagementSci
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 St
abl
eOper
ati
ons−Ensur
ingconsi
stent
,pr
edi
ctabl
epr
ocessest
oimpr
ovewhat
t
hecust
omerseesandf
eel
s.

 Desi
gnf
orSi
xSi
gma−Desi
gni
ngt
omeetcust
omerneedsandpr
ocesscapabi
l
ity
.

Si
xSi
gmaf
ocusesf
ir
stonr
educi
ngpr
ocessv
ari
ati
onandt
henoni
mpr
ovi
ngt
he
pr
ocesscapabi
l
ity
.

Si
xSi
gmaof
fer
ssi
xmaj
orbenef
it
sthatat
tractcompani
es−
 Gener
atessust
ainedsuccess

 Set
saper
for
mancegoal
forev
ery
one

 Enhancesv
aluet
ocust
omer
s

 Accel
erat
est
her
ateofi
mpr
ovement

 Pr
omot
esl
ear
ningandcr
oss-
pol
l
inat
ion

 Execut
esst
rat
egi
cchange

ConceptofCMM
Capabi
l
ityMat
uri
tyModeli
susedasabenchmar
ktomeasur
ethemat
uri
tyofan
or
gani
zat
ion'
ssof
twar
epr
ocess.Al
so,
itwasi
mpl
ement
edt
otr
ackt
hequal
i
tyoft
he
sof
twar
edev
elopmentsy
stem.

Si
gni
fi
canceofCMM
TodayCMM actasa"
seal
ofappr
oval
"int
hesof
twar
eindust
ry.I
thel
psi
nvar
ious

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ManagementSci
ence Uni
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VI

way
stoi
mpr
ovet
hesof
twar
equal
i
ty.

 I
tgui
dest
owar
dsr
epeat
abl
est
andar
dpr
ocessandhencer
educet
hel
ear
ning
t
imeonhowt
ogett
hingsdone

 Pr
act
ici
ngCMM meanspr
act
ici
ngst
andar
dpr
otocol
fordev
elopment
,whi
ch
meansi
tnotonl
yhel
pst
het
eam t
osav
eti
mebutal
sogi
vesacl
earv
iewofwhat
t
odoandwhatt
oexpect

 Thequal
it
yact
ivi
ti
esgel
wel
lwi
tht
hepr
ojectr
athert
hant
houghtofasasepar
ate
ev
ent

 I
tact
sasacommut
erbet
weent
hepr
ojectandt
het
eam

 CMM ef
for
tsar
eal
way
stowar
dst
hei
mpr
ovementoft
hepr
ocess

Li
mit
ati
onsofCMM Model
s
 CMM det
ermi
neswhatapr
ocessshoul
daddr
essi
nst
eadofhowi
tshoul
dbe
i
mpl
ement
ed

 I
tdoesnotexpl
ainev
erypossi
bil
i
tyofsof
twar
epr
ocessi
mpr
ovement

 I
tconcent
rat
esonsof
twar
eissuesbutdoesnotconsi
derst
rat
egi
cbusi
ness
pl
anni
ng,
adopt
ingt
echnol
ogi
es,
est
abl
i
shi
ngpr
oductl
i
neandmanagi
nghuman
r
esour
ces

 I
tdoesnott
ell
onwhatki
ndofbusi
nessanor
gani
zat
ionshoul
dbei
n

 CMM wi
l
lnotbeusef
uli
nthepr
ojecthav
ingacr
isi
sri
ghtnow

ConceptofSuppl
ychai
nmanagement
Themai
nobj
ect
iveofsuppl
ychai
nmanagementi
stomoni
torandr
elat
epr
oduct
ion,
di
str
ibut
ion,andshi
pmentofpr
oduct
sandser
vices.Thi
scanbedonebycompani
es
wi
thav
erygoodandt
ighthol
dov
eri
nter
nali
nvent
ori
es,
product
ion,
dist
ri
but
ion,
int
ernal
pr
oduct
ionsandsal
es.

Suppl
ychai
n managementai
msatcont
ri
but
ing t
othef
inanci
alsuccessofan
ent
erpr
ise.I
tai
ms atl
eadi
ng ent
erpr
ises usi
ng t
he suppl
y chai
ntoi
mpr
ove
di
ff
erent
iat
ion,i
ncr
easesal
es,andpenet
rat
enewmar
ket
s.Theobj
ect
ivei
stodr
ive

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ManagementSci
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compet
it
ivebenef
itandshar
ehol
derv
alue.

Thekeybenef
it
sofsuppl
ychai
nmanagementar
easf
oll
ows−
 Devel
opsbet
tercust
omerr
elat
ionshi
pandser
vice.

 Cr
eat
esbet
terdel
i
ver
ymechani
smsf
orpr
oduct
sandser
vicesi
ndemandwi
th
mi
nimum del
ay.
 I
mpr
ovi
sespr
oduct
ivi
tyandbusi
nessf
unct
ions.

 Mi
nimi
zeswar
ehouseandt
ranspor
tat
ioncost
s.

 Mi
nimi
zesdi
rectandi
ndi
rectcost
s.

 Assi
stsi
nachi
evi
ngshi
ppi
ngofr
ightpr
oduct
stot
her
ightpl
aceatt
her
ightt
ime.

 Enhancesi
nvent
orymanagement
,suppor
ti
ngt
hesuccessf
ulexecut
ionofj
ust
-i
n-
t
imest
ockmodel
s.

 Assi
stscompani
esi
nadapt
ingt
othechal
l
engesofgl
obal
i
zat
ion,
economi
c
upheav
al,
expandi
ngconsumerexpect
ati
ons,
andr
elat
eddi
ff
erences.

 Assi
stscompani
esi
nmi
nimi
zi
ngwast
e,dr
ivi
ngoutcost
s,andachi
evi
ng
ef
fi
cienci
est
hroughoutt
hesuppl
ychai
npr
ocess.

ConceptofERP
Ent
erpr
iser
esour
cepl
anni
ngorERPsof
twar
eisasui
teofappl
i
cat
ionst
hatmanages
cor
ebusi
nesspr
ocesses,suchassal
es,pur
chasi
ng,account
ing,humanr
esour
ce,
cust
omersuppor
t,CRM andi
nvent
ory
.It
’sani
ntegr
atedsy
stem asopposedt
o
i
ndi
vi
dualsof
twar
e desi
gned speci
fi
cal
l
yforbusi
ness pr
ocess.ERP sof
twar
e
sol
uti
onshav
eincr
easi
ngl
ygai
nedt
ract
ionamongent
erpr
isesbot
hbi
gandsmal
lfor
i
tscent
ral
i
zed appr
oach t
o busi
nesspr
ocesses.Wi
thi
t,y
ou can col
l
ect
,st
ore,
manage,andi
nter
pretdat
afr
om v
ari
ousbusi
nessuni
ts.Li
kewi
se,ERPi
susedt
o
aut
omat
eback-
off
icet
asksandst
reaml
i
necr
oss-
depar
tment
alwor
kfl
ows.When
opt
imi
zed,
thesol
uti
oncandr
iveef
fi
ciency
,lowercost
sandi
ncr
easepr
ofi
tabi
l
ity
.

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ManagementSci
ence Uni
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VI

ERPusedt
obeaccessi
bleonl
ytol
argeent
erpr
isesbecauseoft
hecapi
talhar
dwar
e
r
equi
redl
i
keser
ver
sandmul
ti
plewor
kst
ati
ons,anddedi
cat
edt
eamst
ohandl
eit
s
compl
exdepl
oyment
,upgr
ades,andmai
ntenance.Howev
er,i
nAccent
ure’
s2019
ERPt
rendsst
udy
,theypr
edi
ctedt
hatSaaSERPdepl
oymenti
saccel
erat
ingasa
mai
nst
ream del
i
ver
ymodelwi
thcl
oudv
endor
schi
ppi
ngawaychunksoft
hemar
ket
f
rom l
egacydev
eloper
s.

Today
,SaaSt
echnol
ogyenabl
esv
endor
stoal
soof
ferERPsol
uti
onst
osmal
land
medi
um ent
erpr
ises.Modul
es ar
e sol
d separ
atel
yorbundl
ed as a pl
an,whi
l
e
har
dwar
eandt
echni
calmai
ntenancear
emanagedbyv
endor
s.Thef
eat
uresofERP
sof
twar
emaybepar
eddownorl
i
mit
edt
oacoupl
eoff
unct
ionsbutt
hisst
il
lal
l
ows
compani
esofal
lsi
zest
oreapt
hebenef
it
sofERPsof
twar
e.Someoft
her
easons
t
heyi
mpl
ementt
heseERPpl
atf
ormsar
etoi
mpr
ovebusi
nessper
for
mance(
64%)
,to
posi
ti
oncompanyf
orgr
owt
h(57%)
,ort
oreducewor
kingcapi
tal(
57%)
.Inaddi
ti
on,
st
art
upsandSMBscannow r
elyl
essonmanpowert
ogoaboutt
hei
rday
-to-
day
oper
ati
ons.

Si
gni
fi
canceofERP
Toi
mpr
ovebusi
nessper
for
mance
Toposi
ti
ont
hecompanyf
orgr
owt
h
Tor
educewor
kingcapi
tal
Tobet
terser
vecust
omer
s
Tomakeempl
oyeej
obseasi
er
Tobet
teri
ntegr
atesy
stemsacr
ossmul
ti
plel
ocat
ions
Tor
epl
aceanol
dERPorl
egacysy
stem
Toensur
erepor
ti
ngorr
egul
ator
ycompl
i
ance
Tost
andar
dizegl
obal
busi
nessoper
ati
ons

Adv
ant
ages

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ManagementSci
ence Uni
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VI

 I
ntegr
atedsy
stemst
ypi
cal
l
yimpr
ovecommuni
cat
ionbet
weendepar
tment
sand
busi
nesspr
ocessest
hroughdat
ast
andar
dizat
ionandaut
omat
edwor
kfl
ow
pr
ocessi
ng.
 Ev
ery
oneusest
hesamesour
ceofdat
a,sor
epor
ti
ngbecomesmor
econsi
stent
,
accur
ate,
andt
imel
y.

 Thev
ari
oussy
stemsshar
eacommondat
amet
hodol
ogy
,sot
hedat
ais
consi
stentacr
ossdepar
tment
s,busi
nessuni
ts,
regi
ons,
andcount
ri
es.

 ManyERP sy
stemsi
ncl
udeani
ntegr
atedr
epor
ti
ngappl
i
cat
ion.Byusi
ngt
his
r
epor
ti
ngappl
i
cat
ion,cust
omer
scanqui
ckl
ygai
ninsi
ghti
ntodat
athatmaynot
hav
ebeenpr
evi
ousl
yav
ail
abl
e.

ConceptofPer
for
manceManagement
Per
for
mancemanagementi
samuchbr
oaderandacompl
i
cat
edf
unct
ionofHR,
asi
t
encompassesact
ivi
ti
essuchasj
ointgoalset
ti
ng,cont
inuouspr
ogr
essr
evi
ew and
f
requent communi
cat
ion,f
eedback and coachi
ng f
or i
mpr
oved per
for
mance,
i
mpl
ement
ati
on of empl
oyee dev
elopment pr
ogr
ammes and r
ewar
ding
achi
evement
s.Per
for
mancemanagementcanber
egar
dedasasy
stemat
icpr
ocess
bywhi
cht
heov
eral
lper
for
manceofanor
gani
zat
ioncanbei
mpr
ovedbyi
mpr
ovi
ng
t
heper
for
manceofi
ndi
vi
dual
swi
thi
nat
eam f
ramewor
k.I
tisameansf
orpr
omot
ing
super
iorper
for
mance by communi
cat
ing expect
ati
ons,def
ini
ng r
oles wi
thi
na
r
equi
red compet
ence f
ramewor
k and est
abl
i
shi
ng achi
evabl
e benchmar
ks.
Per
for
manceManagementSy
stem i
ncl
udest
hef
oll
owi
ngcomponent
s:

1.Per
for
mancePl
anni
ng:Per
for
mancepl
anni
ngi
sthef
ir
stcr
uci
alcomponentof
anyper
for
mancemanagementpr
ocesswhi
chf
ormst
hebasi
sofper
for
mance
appr
aisal
s.Per
for
mancepl
anni
ngi
sjoi
ntl
ydonebyt
heappr
aiseeandal
sot
he
r
evi
eweei
nthebegi
nni
ngofaper
for
mancesessi
on.Dur
ingt
hisper
iod,t
he
empl
oyeesdeci
deupont
het
arget
sandt
hekeyper
for
mancear
easwhi
chcanbe
per
for
medov
eray
earwi
thi
ntheper
for
mancebudget
.,whi
chi
sfi
nal
i
zedaf
tera
mut
ual
agr
eementbet
weent
her
epor
ti
ngof
fi
cerandt
heempl
oyee.

2.Per
for
manceAppr
aisal
andRev
iewi
ng:
Theappr
aisal
sar
enor
mal
l
yper
for
med
t
wicei
nay
eari
nanor
gani
zat
ioni
nthef
orm ofmi
drev
iewsandannual

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ManagementSci
ence Uni
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r
evi
ewswhi
chi
shel
dint
heendoft
hef
inanci
aly
ear
.Int
hispr
ocess,t
he
appr
aiseef
ir
stof
fer
sthesel
ffi
l
ledupr
ati
ngsi
nthesel
fappr
aisalf
orm and
al
sodescr
ibeshi
s/herachi
evement
sov
eraper
iodoft
imei
nquant
if
iabl
e
t
erms.Af
tert
hesel
fappr
aisal
,thef
inalr
ati
ngsar
epr
ovi
dedbyt
heappr
aiser
f
ort
hequant
if
iabl
eandmeasur
abl
eachi
evement
soft
heempl
oyeebei
ng
appr
aised.Theent
ir
epr
ocessofr
evi
ewseeksanact
ivepar
ti
cipat
ionofbot
h
t
heempl
oyeeandt
heappr
aiserf
oranal
yzi
ngt
hecausesofl
oophol
esi
nthe
per
for
manceandhow i
tcanbeov
ercome.Thi
shasbeendi
scussedi
nthe
per
for
mancef
eedbacksect
ion.

3.Feedback on t
he Per
for
mance f
oll
owed by per
sonalcounsel
i
ng and
per
for
mance f
aci
l
itat
ion:Feedback and counsel
i
ng i
s gi
ven a l
ot of
i
mpor
tancei
ntheper
for
mancemanagementpr
ocess.Thi
sist
hest
agei
n
whi
cht
heempl
oyeeacqui
resawar
enessf
rom t
heappr
aiseraboutt
hear
eas
of i
mpr
ovement
s and al
so i
nfor
mat
ion on whet
her t
he empl
oyee i
s
cont
ri
but
ing t
he expect
ed l
evel
s ofper
for
mance ornot
.The empl
oyee
r
ecei
vesanopenandav
eryt
ranspar
entf
eedbackandal
ongwi
tht
hist
he
t
rai
ning and dev
elopmentneeds oft
he empl
oyee i
s al
so i
dent
if
ied.The
appr
aiseradopt
sal
lthepossi
blest
epst
oensur
ethatt
heempl
oyeemeet
sthe
expect
edout
comesf
oranor
gani
zat
iont
hroughef
fect
iveper
sonalcounsel
i
ng
and gui
dance,ment
ori
ng and r
epr
esent
ing t
he empl
oyee i
n t
rai
ning
pr
ogr
ammes whi
ch dev
elop t
he compet
enci
es and i
mpr
ovet
he ov
eral
l
pr
oduct
ivi
ty.

4.Rewar
ding good per
for
mance:Thi
sisav
eryv
italcomponentas i
twi
l
l
det
ermi
ne t
he wor
k mot
ivat
ion ofan empl
oyee.Dur
ing t
his st
age,an
empl
oyeei
spubl
i
clyr
ecogni
zedf
orgoodper
for
manceandi
srewar
ded.Thi
s
st
agei
sver
ysensi
ti
vef
oranempl
oyeeast
hismayhav
eadi
recti
nfl
uenceon
t
he sel
f est
eem and achi
evement or
ient
ati
on.Any cont
ri
but
ions dul
y
r
ecogni
zed byan or
gani
zat
ion hel
psan empl
oyeei
n copi
ng up wi
tht
he
f
ail
uressuccessf
ull
yandsat
isf
iest
heneedf
oraf
fect
ion.

5.Per
for
mance I
mpr
ovementPl
ans:I
nthi
s st
age,f
resh setofgoal
s ar
e
est
abl
i
shedf
oranempl
oyeeandnewdeadl
i
nei
spr
ovi
dedf
oraccompl
i
shi
ng

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ManagementSci
ence Uni
t-
VI

t
hoseobj
ect
ives.Theempl
oyeei
scl
ear
lycommuni
cat
edaboutt
hear
easi
n
whi
cht
heempl
oyeei
sexpect
edt
oimpr
oveandast
ipul
ateddeadl
i
nei
sal
so
assi
gnedwi
thi
nwhi
cht
heempl
oyeemustshowt
hisi
mpr
ovement
.Thi
spl
an
i
sjoi
ntl
ydev
eloped byt
he appr
aisee and t
he appr
aiserand i
s mut
ual
l
y
appr
oved.

6.Pot
ent
ialAppr
aisal
:Pot
ent
ialappr
aisalf
ormsabasi
sforbot
hlat
eraland
v
ert
icalmov
ementofempl
oyees.Byi
mpl
ement
ingcompet
encymappi
ngand
v
ari
ousassessmentt
echni
ques,pot
ent
ialappr
aisali
sper
for
med.Pot
ent
ial
appr
aisal
prov
idescr
uci
ali
nput
sforsuccessi
onpl
anni
ngandj
obr
otat
ion.

ConceptofBPO
Busi
nessPr
ocessOut
sour
cing(
BPO)i
sout
sour
cingofbusi
nessf
unct
ionsgener
all
y
per
for
medbywhi
tecol
l
arandcl
eri
cal
empl
oyeest
oachi
evev
ari
ousbenef
it
ssuchas
costsav
ings,bet
terqual
i
tyandabi
l
ityt
ofocusoncor
ecompet
ence.BPOi
nvol
ves
out
sour
cingpr
ocessest
hatar
enotcor
etoacompany
,howev
er,ar
eessent
ialf
or
smoot
h oper
ati
on of t
he company
. The cust
omer t
ransf
erst
he compl
ete
r
esponsi
bil
i
tyoft
hesef
unct
ionst
othev
endorwhoguar
ant
eescer
tai
nser
vicequal
i
ty
st
andar
ds.Suchpr
ocessesi
ncl
udecust
omerser
vice,pay
rol
lpr
ocessi
ng,i
nvent
ory
management
,et
c.

BPOConst
it
utest
hef
oll
owi
ngpr
ocessesi
nanor
gani
zat
ion–
Admi
nist
rat
ivesuppor
t:Out
sour
cingofadmi
nist
rat
ivesuppor
tfunct
ionsi
ncl
udes
dat
aent
ry,documentconv
ersi
on,f
ormspr
ocessi
ng,documentscanni
ng,i
ndexi
ng,
secr
etar
ial
taskssuppor
t,et
c.

Cust
omer r
elat
ionshi
p management
: Cust
omer ser
vice out
sour
cing i
ncl
udes
out
sour
cingoff
unct
ionssuchascust
omersuppor
t,or
dert
aki
ng,cust
omerser
vice,
pr
oductsuppor
t,t
echni
calhel
pdesk,col
l
ect
ionsandmar
ketr
esear
ch.Ref
ert
othe
r
epor
tonCust
omerSer
viceOut
sour
cingf
ormor
edet
ail
s.

Documentpr
ocesses:Documentpr
ocess out
sour
cing i
ncl
udes out
sour
cing of
cust
omerf
aci
ng,t
echni
cal
,mar
ket
ingandcommuni
cat
ions,f
inanci
alaccount
ing,
andr
egul
ator
ycompl
i
ancedocument
s.

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ManagementSci
ence Uni
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Fi
nanceandaccount
ing:Fi
nanceandaccount
ingout
sour
cingi
ncl
udesser
vicessuch
asi
nter
nalaudi
ti
ng,
timeandexpensemanagement
,tr
avelexpenses,
credi
tanddebt
anal
ysi
s,col
l
ect
ions,i
nvoi
cing,account
spay
abl
e,account
srecei
vabl
eandbi
l
li
ng-
di
sput
eresol
uti
on.

Humanr
esour
cesandt
rai
ning:Humanr
esour
ces(
HR)i
soneoft
hemostcr
it
ical
asset
sofacompanyandcompani
esneedt
o car
ryoutv
ari
oust
askssuchas
r
ecr
uit
ment
,tr
aini
ng,at
tri
ti
on/
ret
ent
ion,dat
abase management
,cont
ract
-wor
ker
management
,et
c.,f
ort
hei
rempl
oyees.Car
ryi
ngoutt
heset
askst
hroughani
nter
nal
HRdepar
tmenti
scost
lyanddi
ver
tst
heat
tent
ionoft
hemanagementf
rom i
tscor
e
busi
nessi
ssues.Hence,
compani
esar
enowr
esor
ti
ngt
oHRout
sour
cingbi
gti
me.

I
ntel
l
ect
ualpr
oper
tyr
esear
ch and document
ati
on:Out
sour
cing i
nint
ell
ect
ual
pr
oper
tyr
esear
ch and document
ati
on i
ncl
udes f
il
ing and dr
aft
ing of pat
ent
appl
i
cat
ions,
pri
orar
tresear
ch,
li
censi
ngsuppor
t,andpat
entpor
tfol
i
oanal
ysi
s.

Legalser
vices:Legalpr
ocess out
sour
cing (
LPO)i
nvol
ves consul
ti
ng,r
esear
ch,
t
ranscr
ipt
ion,document
smanagement
,bi
l
li
ng,t
ransl
ati
onandot
heradmi
nist
rat
ive
and secr
etar
ialsuppor
tser
vices r
equi
red f
orv
ari
ous l
egalf
unct
ions such as
commer
ciall
i
tigat
ion,ar
bit
rat
ion and medi
ati
on,appeal
s,gov
ernmentcont
ract
s,
l
egal
riskev
aluat
ion,
etc.

Medi
calt
ranscr
ipt
ion:Medi
calt
ranscr
ipt
ioni
swr
it
ingdownmedi
calr
ecor
dsdi
ctat
ed
byphy
sici
ansandot
herheal
thcar
epr
ofessi
onal
s.Theser
ecor
dsi
ncl
udepat
ient
hi
stor
yandphy
sicalr
epor
ts,cl
i
nicnot
es,t
her
apeut
icpr
ocedur
es,cl
i
nicalcour
se,
di
agnosi
s,pr
ognosi
s,di
schar
gesummar
ies,
etc.

Pay
rol
lmai
ntenance and ot
hert
ransact
ion pr
ocessi
ng:Thi
s segmenti
ncl
udes
pay
rol
l
,pay
ment
,check,cr
edi
tcar
dandst
ockt
radepr
ocessi
ng.For
est
err
esear
ch
pr
edi
ctst
ransact
ionpr
ocessi
ngt
obeal
argesegmentwi
thi
ntheBPOi
ndust
rysoon,
wi
thamar
ketsi
zeofUSD 58bi
l
li
oni
n2008.Somev
ert
icalpr
ocessessuchas
mor
tgage,
loansandi
nsur
ancecl
aimspr
ocessi
ngar
eal
sobei
ngout
sour
ced.

Pr
oductdev
elopment
:Compani
esneedt
oconst
ant
lyi
nnov
atet
oremai
ncompet
it
ive
i
nthemar
ket
.Wi
tht
hei
ncr
easi
ngspeci
ali
zat
ionofexper
ti
ser
equi
redt
ocar
ryout

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ManagementSci
ence Uni
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VI

pr
oductdev
elopment
,compani
es choose t
o out
sour
ce t
hei
rR&D f
unct
ions t
o
v
endor
swhohav
eexper
ti
sei
nagi
venf
iel
d.Ov
ert
hepastf
ew y
ear
s,numer
ous
MNCshav
eini
ti
atedof
fshor
ingR&D t
oot
hercount
ri
esi
ncl
udi
ngI
ndi
awhi
chi
s
emer
gingasahubf
orR&Dout
sour
cing.

Publ
i
shi
ng:
Publ
i
shi
ngout
sour
cingi
nvol
vesout
sour
cingofpubl
i
shi
ngf
unct
ionssuch
asbookdesi
gn,bookdi
git
izat
ion,e-
publ
i
shi
ng,dr
awi
ngsandgr
aphi
cs,i
ndexi
ng,
j
our
nal
admi
nist
rat
ion,
etc.

Resear
chandanal
ysi
s:Compani
esr
equi
redat
aandi
tsanal
ysi
sformaki
ngi
nfor
med
st
rat
egi
cdeci
sions.Thesecompani
eshav
est
art
edout
sour
cingt
hei
rresear
chand
anal
ysi
srequi
rement
stov
endor
swhospeci
ali
zei
nty
picalr
esear
chandanal
ysi
s
wor
ksuchdat
aanal
yti
cs,f
inanci
alanal
yti
cs,mar
ketr
esear
ch,secondar
yresear
ch,
pr
imar
yresear
ch,
indust
ryov
erv
iew,
compet
it
ivei
ntel
l
igence,
etc.

Sal
es and mar
ket
ing (
incl
udi
ng t
elemar
ket
ing)
:Sal
e and mar
ket
ing out
sour
cing
i
nvol
vesdel
egat
ingpar
tsofsal
esandmar
ket
ingf
unct
ionssuchascol
dcal
l
ing,
emai
lpi
tches,t
elephone sur
vey
s,l
ead gener
ati
on,l
ead qual
i
fyi
ng,appoi
ntment
set
ti
ng,
sal
est
eam management
,et
c.

Secur
it
y:Compani
eshav
etosear
chf
ornew t
echnol
ogi
esandempl
oyqual
i
fied
secur
it
ypr
ofessi
onal
sto keep t
hei
rdat
a secur
efr
om t
hef
t.Mai
ntai
ning t
hese
r
esour
cesandi
mpl
ement
ingaf
ool
-pr
oofsecur
it
ypol
i
cyi
sadi
ff
icul
ttaskwhi
chcan
bebet
terhandl
edbyexper
iencedt
hir
dpar
tysecur
it
yagenci
es.Secur
it
yout
sour
cing
i
nvol
vesmanagementofi
nvest
igat
iveser
vices,phy
sicalsecur
it
y,el
ect
roni
csecur
it
y
sy
stems,
comput
erandnet
wor
ksecur
it
y,et
c.

Suppl
ychai
n management
:Out
sour
cing i
n suppl
ychai
n managementi
nvol
ves
l
ogi
sti
cs,pr
ocur
ement
,war
ehouse management
,cont
ractmanagement
,suppl
y
chai
nrel
ati
onshi
pmanagement
,et
c.

ConceptofBusi
nesspr
ocessRe-
engi
neer
ing
TheBusi
nessPr
ocessReengi
neer
ingorBPRi
stheanal
ysi
sandr
edesi
gnofcor
e
busi
nesspr
ocessest
oachi
evet
hesubst
ant
iali
mpr
ovement
sini
tsper
for
mance,
pr
oduct
ivi
ty,andqual
i
ty.Thebusi
nesspr
ocessr
efer
stot
hesetofi
nter
li
nkedt
asks

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ManagementSci
ence Uni
t-
VI

oract
ivi
ti
esper
for
medt
oachi
eveaspeci
fi
edout
come.

Si
mpl
y,t
hebusi
nesspr
ocessr
eengi
neer
ingmeanst
ochanget
hewayani
ndi
vi
dual
per
for
mst
hewor
ksuch t
hatbet
terr
esul
tsar
eaccompl
i
shed.Thepur
poseof
busi
nesspr
ocessr
eengi
neer
ingi
stor
edesi
gnt
hewor
kfl
owsi
nor
dert
odr
amat
ical
l
y
i
mpr
ovet
hecust
omerser
vice,achi
evehi
gherl
evel
sofef
fi
ciency
,cutoper
ati
onal
cost
sandbecomeawor
ld-
classcompet
it
or.

Thebusi
nesspr
ocessr
eengi
neer
ingi
nvol
vesaser
iesofst
eps.Thesear
e:
St
ep1:
Def
ineObj
ect
ivesandFr
amewor
k
St
ep2:
Ident
if
yCust
omerNeeds
St
ep3:
Studyt
heexi
sti
ngbusi
nesspr
ocess
St
ep4:
For
mul
atear
edesi
gnbusi
nesspl
an
St
ep5:
Impl
ementt
heRedesi
gnPl
an
Thebusinesspr
ocessi
srequi
redt
ober
eengi
neer
edbecauseoft
hef
oll
owi
ng
reasons:
 Thepr
ocessest
hecompanyi
susi
ngmi
ghthav
ebecomeout
dat
edorhol
ds
nor
elev
ancei
nthecur
rentmar
ketscenar
io.
 Of
ten,
thesub-
div
isi
onsi
ntheor
gani
zat
ionai
msati
mpr
ovi
ngt
hei
rrespect
ive
di
vi
sion per
for
mance and ov
erl
ook t
he r
esul
tantef
fect
s on t
he ot
her
depar
tment
s.Thi
smi
ghtl
eadt
otheunder
per
for
manceoft
hef
ir
m asawhol
e.
 Duet
othedepar
tment
ali
zat
ion,eachempl
oyeef
ocusesont
heper
for
mance
ofhi
srespect
ivedepar
tmentandmayov
erl
ookt
hecr
it
icali
ssuesemer
gingi
n
ot
herar
easoft
hef
ir
m,andt
her
efor
e,t
heneedf
orr
e-engi
neer
ingar
isesso
t
hatt
her
oleoft
heempl
oyeescoul
dbebr
oadenedandshal
lbemademor
e
r
esponsi
blet
owar
dst
hef
ir
m.
 The exi
sti
ng busi
ness pr
ocess coul
d be l
engt
hy,t
ime-
consumi
ng,cost
ly,
obsol
ete,t
her
efor
e,i
srequi
redt
ober
edesi
gnedt
omat
chi
twi
tht
hecur
rent
busi
nessr
equi
rement
s.

 Thet
echnol
ogykeepsonupdat
ingandi
nor
dert
ocat
chupwi
thi
t,r
eengi
neer
ing
isamust.
Thus,t
hebusi
nesspr
ocessr
eengi
neer
ingf
ocusesonobt
aini
ngt
hequant
um gai
nsi
n
t
ermsofcost
,ti
me,out
put
,qual
i
tyandr
esponsi
venesst
owar
dscust
omer
s.Al
so,i
t

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ManagementSci
ence Uni
t-
VI

emphasi
zesonsi
mpl
i
fyi
ngandst
reaml
i
ningt
hebusi
nesspr
ocessbyel
i
minat
ingt
he
unnecessar
yort
ime-
consumi
ngbusi
nessact
ivi
ti
esandspeedi
ngupt
hewor
kfl
owby
maki
ngt
heuseofhi
gh-
techsy
stems.

ConceptofBenchMar
king
Benchmar
kingi
sdef
inedast
he“
processofcont
inuousl
ycompar
ingandmeasur
ing
anor
gani
sat
ionwi
thbusi
nessl
eader
sany
wher
eint
hewor
ldt
ogai
ninf
ormat
iont
hat
wi
l
l hel
p t
he or
gani
sat
ion t
ake act
ion t
o i
mpr
ove i
ts per
for
mance”
. Al
so
“
Benchmar
king i
sthe pr
ocess ofcompar
ing somet
hing orsomeone wi
th best
pr
act
ice”
.Bestpr
act
icesar
ecol
l
ect
ionsofact
ivi
ti
eswi
thi
nanor
gani
sat
iont
hatar
e
donev
erywel
landul
ti
mat
ely
,ar
erecogni
sedassuchbyot
her
s.Benchmar
kingi
san
adv
ancedqual
i
tyi
mpr
ovementmet
hodol
ogy
,whi
chmaybei
ntegr
atedi
ntoaTQM
sy
stem.

Requi
rement
sforasuccessf
ulbenchmar
kingModel
Abenchmar
kingmodel
shoul
dhav
elogi
cal
flowofi
deas.Theat
tr
ibut
esoft
hemodel
shoul
d becl
earso t
hatpeopl
ecan descr
ibei
tto ot
her
sand t
hel
i
stenercan
under
standi
nor
dert
otr
ansl
atei
ntoact
ion.Abenchmar
kingmodelshoul
dhav
ethe
f
oll
owi
ngr
equi
rement
sbui
l
tin:

• Acl
earunder
standi
ngofbenchmar
kingr
equi
rement
s

• I
dent
if
icat
ionofbenchmar
kingt
eam

• Useofef
fect
ivepr
ojectpl
anni
ngt
ool
sandt
echni
ques

• Themodelhastocreat
easetofexpectat
ionsregardi
ngtheinf
ormat
ion;
how
iti
stobe
gat
her
ed,r
epor
tedandusedtorev
iewandadjustprogressofacti
vi
ty.
•I
dent
if
icat
ionandanal
ysi
sofgaps.

• Feedbackpr
ovi
si
ont
otakeact
ionandr
ecy
cle.

I
ngener
al,
ther
ear
efourt
ypesofbenchmar
king:
I
nter
nalBenchmar
king -I
nter
nalbenchmar
king means compar
ison o fi
nter
nal
oper
ati
onsbet
weendi
ff
erentdi
vi
sionsorsi
mil
arf
unct
ionsi
ndi
ff
erentoper
ati
ng
uni
ts wi
thi
n an or
gani
sat
ion.I
nter
nalbenchmar
king compar
es si
mil
ari
nter
nal

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ManagementSci
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VI

f
unct
ionswi
thi
nanor
gani
sat
ion,
andi
tof
tenser
vesasapi
l
otpr
ojectf
orconduct
ing
ext
ernal
benchmar
king.

Compet
it
iveBenchmar
king-Compet
it
ivebenchmar
kingcompar
esawor
kpr
ocess
wi
tht
hatoft
hebestcompet
it
ori
nthesamemar
ket
.Itr
eveal
stheper
for
mance
measur
e l
evel
s t
o be sur
passed. Compet
it
ive benchmar
king i
s basi
cal
l
y
benchmar
kingagai
nstext
ernal
dir
ectpr
oductcompet
it
ors.

Funct
ionalBenchmar
king-Funct
ionalbenchmar
kingcompar
esawor
kfunct
iont
o
t
hatoft
hef
unct
ionall
eaderi
nthesamei
ndust
ryorcr
oss-
indust
ry.Funct
ional
benchmar
kingi
sdonewi
thf
unct
ionalcompet
it
orsori
ndust
ryl
eaderf
ir
ms,ev
eni
f
t
hei
ndust
ri
est
hemsel
vesar
edi
ssi
mil
ar.

Gener
icBenchmar
king-Thi
sfocusesont
hebestwor
kpr
ocesses.I
nst
eadof
f
ocusi
ngonacompany
’sbusi
nesspr
act
ices,si
mil
arpr
ocedur
esandf
unct
ionsar
e
benchmar
ked.

ConceptofBal
anceScor
eCar
d
A bal
ancedscor
ecar
disaper
for
mancemet
ri
cusedi
nst
rat
egi
cmanagementt
o
i
dent
if
yandi
mpr
ovev
ari
ousi
nter
nalf
unct
ionsofabusi
nessandt
hei
rresul
ti
ng
ext
ernalout
comes.I
tisusedt
omeasur
eandpr
ovi
def
eedbackt
oor
gani
zat
ions.
Dat
a col
l
ect
ion i
s cr
uci
alt
o pr
ovi
ding quant
it
ati
ver
esul
ts,as t
he i
nfor
mat
ion
gat
her
ed i
sint
erpr
eted bymanager
sand execut
ives,and used t
o makebet
ter
deci
si
onsf
ort
heor
gani
zat
ion.

Thebal
ancedscor
ecar
disusedt
oat
tai
nobj
ect
ives,measur
ement
s,i
nit
iat
ives,and
goal
sthatr
esul
tfr
om t
hesef
ourpr
imar
yfunct
ionsofabusi
ness.Compani
escan
easi
l
yident
if
yfact
orshi
nder
ingbusi
nessper
for
manceandout
li
nest
rat
egi
cchanges
t
rackedbyf
utur
escor
ecar
ds.

TheFourLegsoft
heBal
ancedScor
ecar
d

I
nfor
mat
ioni
scol
l
ect
edandanal
yzedf
rom f
ouraspect
sofabusi
ness:
1.Lear
ning and gr
owt
h ar
e anal
yzed t
hrough t
he i
nvest
igat
ion oft
rai
ning and
knowl
edger
esour
ces.Thi
sfi
rstl
eghandl
eshowwel
li
nfor
mat
ioni
scapt
uredand

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ManagementSci
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how ef
fect
ivel
yempl
oyeesut
il
izet
hei
nfor
mat
iont
oconv
erti
ttoacompet
it
ive
adv
ant
ageov
ert
hei
ndust
ry.

2.Busi
ness pr
ocesses ar
e ev
aluat
ed by i
nvest
igat
ing how wel
lpr
oduct
s ar
e
manuf
act
ured.Oper
ati
onalmanagementi
sanal
yzedt
otr
ackanygaps,del
ays,
bot
tl
enecks,
shor
tages,
orwast
e.
3.Cust
omerper
spect
ivesar
ecol
l
ect
edt
ogaugecust
omersat
isf
act
ionwi
thqual
i
ty,
pr
ice,
andav
ail
abi
l
ityofpr
oduct
sorser
vices.Cust
omer
spr
ovi
def
eedbackabout
t
hei
rsat
isf
act
ionwi
thcur
rentpr
oduct
s.

4.Fi
nanci
aldat
asuchassal
es,expendi
tur
es,andi
ncomear
eusedt
ounder
stand
f
inanci
alper
for
mance.These f
inanci
almet
ri
cs mayi
ncl
ude dol
l
aramount
s,
f
inanci
alr
ati
os,
budgetv
ari
ances,
ori
ncomet
arget
s.

Thesef
ourl
egsencompasst
hev
isi
onandst
rat
egyofanor
gani
zat
ionandr
equi
re
act
ivemanagementt
oanal
yzet
hedat
acol
l
ect
ed.Thebal
ancedscor
ecar
dist
hus
of
tenr
efer
redt
oasamanagementt
ool
rat
hert
hanameasur
ementt
ool
.

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