IS 788 12.21 IS 788 [Process] Change Management Lecture: Process Redesign for Supply Chain and E-business (Harmon, Ch. 14, 15) Detailed look at a real-world.

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IS 788 [Process] Change Management

Lecture: Process Redesign for Supply Chain and E-

business (Harmon, Ch. 14, 15) Detailed look at a real-world process

change case (El Sawy, Ch. 6)

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Web-driven process change Some heuristics and observations from the

field Two separate drivers:1. Customer driven (B2C; assisted C2C, i.e. e-

Bay, Craig’s list) Most people who have discretionary income

have PC’s and internet access Wi-Max will make mobile truly ubiquitous ( and

cheap) Information – to drive them to brick sites On-line purchasing

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2. Integration-driven (B2B) Most of the dollar volume resides here

currently, though B2C, G2C get the buzz Substitute for EDI

More flexible Less expensive Because – the internet is based on open

protocols that use cheap ubiquitous infrastructure (phone lines)

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Changes to processes

Customer focus Integration focus (supply chain,

intranets) Internal (information sharing, KMS)

driven

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Customer focused change

BAD process analysis starts with and focuses on activities and details, missing the broader scope of the organization.

GOOD process analysis starts with the CUSTOMER and works back into processes

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Customer focused change (2)

CRM systems Adopting a CRM system (or building one

in-house) can require radical process changes. A few examples: Empowering workers to better deal with

customers (authority shifts) New systems with accompanying new roles

and training Moving emphasis outside the department

(new measures and incentives)

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Customer focused change (3) Portals (what does the term mean to

you?) Main access point to an organization or

function (i.e. HR) An interface between customers,

suppliers or employees Portals change processes!

Even information-only portals (if properly accomplished) change customer behavior and may require significant process change “downstream” (Larry – COBA portal?)

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Portals and web sites

Refer to Harmon, pp. 336 and 339 – the Travel-Is-Us reservation process

A single process – making a reservation – requires an interface with multiple entities

As soon as the reservation process goes on-line it must be automated (to meet customer expectations)

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Web-enabling a process The multiple interfaces must in turn

be automated e.g. to airlines, hotels and (not mentioned in Harmon) credit card providers

The process redesign team should specify the functionality desired of the portal, but . . .

The portal, the automated reservation system and the interfaces are all IT responsibilities

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Process team involvementextends to screen sketchesand use-cases.

IS people in process teamsshould excel at this type of process design bridging between business function and enablingtechnology.

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Supply chain involvement in customer focused web processes

Widget Manufacturing (Harmon, p. 345)

Simple web ordering for a manufacturing company can extend the process through multiple functional areas (in real time – and this is the issue).

Look at the purchase and product inquiry processes (next ppt).

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These processes nowinstantaneously crossmultiple internal functionalareas.

Who owns them?

They always did involvemultiple areas but now all areas have to beautomated. Very significantIT consequences.

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Candidates for web-enablement by industry (Harmon, pp. 348, 49)

And the list goes on and on.

We all USE these functions, but who has thought through the process implications of web-enabling (and thus of necessity automating) them?

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Supply chain and internal e-business applications

Suppliers and subcontractors can be brought into play for customer enabled apps (ex. customer status or delivery inquiries)

But, e-coordinating supply chain actors has more significant benefits in its own right

All such integrations have enormous process change implications.

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Supply chain evolution Supply chain concern implies internal

manufacture of goods and/or services With the advent of global outsourcing

and virtual businesses a newer, more accurate term is “collaborative applications”. Essentially your organization serves as a prime contractor and must manage your subcontractors through these systems.

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Early ‘integrated supply chain’ exemplar

Wal Mart and Proctor and Gamble P&G stocks Wal Mart’s shelves and

then invoices Requires P&G have access to WM sales

and stock What are the implications for process

How many processes are changed? What are the changes? How many changes involve IT?

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Cherry picking (easy wins)

Almost all un-integrated supply chains contain 2X the stock necessary for an integrated supply chain.

Harmon speculates that in the future business competition will be between supply chains (alliances) rather than individual companies!

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Supply chain modeling

Primary foci: inventory, transportation, resources, locations

Inherent conflicts: Every manufacturer wants to produce in

large quantities. Retailers want to purchase only what

they need Inventory is the resultant compromise

(for either or both parties)

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Supply chain modeling (2)

Inherent conflicts (2): The least expensive transportation cost

is for large bulk shipments Retailers want to purchase only what

they need – ship on demand Inventory is the resultant compromise

(for either retailer or manufacturer) Intermediaries (distributors) are part of

the compromise

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The net result:

Negotiations, contracts, teams and processes that extend farbeyond the traditional organizational boundary.

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Satisfaction mechanisms:Examples: steel – worked chips – didn’t

How does this change the traditional process?

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Satisfaction mechanisms (2):

How does this change the traditional process? Public, private. What’s

the difference?

Harmon, fig. 15.5 illustratesa public process

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The effects of globalization

The process must includemeasures and checks onall individual suppliers and distributors but must include a consolidatedview as well. (Compare to the Western Digital example.)

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Process change (activity level) feedingmultiple ‘higher-level’processes.

Analysis at the ‘Setup Process’ levelfeeds KM, DSS and training processes.