Lecture 5 - Basics of BPR (1)

From this lecture, we gain a deep understand on how B, P and R integrate together to form BPR, which can actually be applicable to many of the businesses in our daily life.  This chapter throughout, gave a strong emphasize on the term “process”.

Recap of main points:

B – Business, is

• What service and/or product we(business) wish to provide to the business’s customers
• Mainly developed from “the eyes of the customers” (i.e. outside-in)

P – Process, is

• The way of delivery the involved business’s service and/or product to the customers
• Involves “input” and “output” (definition)

B to P (BP), is

• Is the transformation from Bureaucracy to Customer-Centric (i.e. from “not related to the customers’ wants” to “fulfill customers’ wants”)  
• Satisfying and lure customers’ long interest onto your OWN business, but not the others
• Increase efficiency by converting “streamline process on every person” to “divided, specialized process for a group” -> thus splitting into dividable “processes”

R – Reengineering, is

• Huge leap of business by practicing better process arrangement, not just small improvements/optimization
• Increase overall efficiency of most business elements

BP to R (BPR), is

• Focus on PROCESS
• Huge changes, bringing up business operation to a new level
• AS-IS (not improved) going to TO-BE (improved) [2]

Analysis of BPR’s impact on restaurant –

Semi traditional restaurant versus fast food chain restaurant

As it may not be easy to find a comparison selling exactly the same type of food, a comparison is done based on similar business (both serving food to customers); with vary differences on their service, operation etc.

A basic comparison between...

	Kam Fung Restaurant (Wanchai, Spring Garden Lane)	Mcdonald (Wanchai, Hopewell Centre)
Food availability	-     Sell upon available (every day); else customers have to choose other food -    Availability predicted by manpower	-    Usually constant supply of all food are maintained -    Availability maintained by IS
Way of ordering food	-     Noted down on a piece of “ordering sheet”, pay upon finishing meal	-     POS ordering, pay before taking food
Max. speed/volume of order processing	-     Slower, lesser	-     Fast, High
Preparation of food	-     Separate paper fetch by hand to kitchen, received by chef/food fetcher, then start cooking; serve specific order(s) at one time	-     Food order show immediately at kitchen, immediate preparation and serve; serve several orders concurrently
Size	-     Small team	-     Larger team
Promotion of staff	-     Usually same position for staffs throughout operation	-     May include several promotion of outstanding staffs
Culture	-     Simple, unique culture	-     Corporate culture

McDonalds, being a fast food restaurant, originates from a traditional restaurant (barbecue restaurant)[1].  However, after turning into franchise with major BPRs, it transformed into a restaurant serving enormous number of customers for each of it’s branches in Hong Kong, as well as other places.  This example is not implying that every company must undergo BPR to maintain business (as many businesses value on other areas, such as quality, uniqueness, originality, loyalty with customers etc.). 

However, BPR helps archiving a number of business objectives throughout the business cycles.[3]  This included:

• Dramatic productivity improvements -> MD’s volume of selling food is increased
• Dramatic product and service quality improvements -> in terms of MD fast food’s quality control, normalize of food standard
• Cost reduction/ efficiency gains -> centralized kitchen of MD reduces food processing and storage cost in each branch; accountancy and logistics are also improved
• Improve in organizational quality -> shareholders may enjoy stable growth of company, because of better IS practice in the company
• Increase of market coverage!!! -> this is the objective of many businesses

Other impacts:

• Customer satisfaction (outside-in perspective achieved) -> as service quality can be maintained to a certain level, by optimizing business processes in terms of processing speed and responsiveness
• Better business anchor among the same industry

Reference:

[1] http://en.wikipedia.org/wiki/McDonald's

[2] http://lamspeople.epfl.ch/balabko/Projects/StreamCom/AsIsToBeModels.pdf
[3] http://www.teamtechnology.co.uk/business-process-reengineering.html

Lecture 4 - The Strategic Alignment Model

Response:


Number of people suggest that there isn’t an exactly “best alignment strategies” in the Strategic Alignment Model (SAM), and optimal alignment strategy for a business depends on what the business are, which in turn depends on the scope and nature of the concerned business.  In my opinion, Service Alignment provides generally manageable bases for business operations of large businesses.


Scope or size of a company occupies a huge proportion of the deterministic factors in choosing the alignment strategy.  But assume that “most success business” are those with a higher span of business scope and higher revenue (as business usually aims at expansion and making profit), I think Service Alignment helps systematically maintain business competitiveness and management stability throughout a period of time.

Criteria and assumption of a success business:

-    International, and/or with large business scope

-    Attain a high profit when ranked globally

-    For local firms, they ranked high within local region/area (in terms of above 2 criteria)

Brief factual recall of 4 alignment models mentioned in Comp326 lectures:

Strategy Execution:

-    BS -> OI -> ITI (Business strategy is the driver)

-    Business pay to get services, thus IT infrastructure is implemented by the

Technology Transformation:

-    BS -> ITS -> ITI (Business strategy is the driver)

-    It searches for the best possible IT out-perform areas to suit the business goals

Service Level:

-    ITS -> ITI -> OI (IT strategy is the driver)

-    It promotes building of IT service organization, and use business to promote the company-based IT solution (service and/or product)

Competitive Potential:

-    ITS -> BS -> OI (IT strategy is the driver)

-    It utilizes IT to source the optimal set of strategy for the business

Why Technology Transformation alignment is the best for the above mentioned case:

From this alignment, the business strategy is align on the same level of IT Strategy [2], which means IT strategy can be developed to suit the overall business goals and decisions, followed by implementation of “right tracked” IT infrastructure.  The advantage though is the reduced chance of developing incompatible IT infrastructure during business cycles.

Another advantage though, is that business strategy usually formulates business development from currents market trends; however, Service Level alignment emphasizes the alignment of organizational infrastructure from technology strategy.  If the technology strategy is not a very updated one, which is highly diverted from development trend or used for prolonged period of time, it may start to lose it’s market niche, even providing certain business strategy to mend the situation may make no use. 

An example is Nokia, the world famous mobile manufacturer, with IT strategy “…continue the renewal of our Series 40 platform in QWERTY, touch & type, dual SIM, Nokia services” [1].  Nokia tends not out-perform other manufacturers in the recent years.  Some people expressed that Nokia should switch to develop Android system for its smartphones as their IT strategy, and reduce investing in the less popular Symbian system.  Even with an appropriate Business Strategy, such as “build great mobile products that enable billions of people worldwide to enjoy more of what life has to offer…”[1], Service Level alignment may not offer a stable growth for a big corporation as technological/IT driven does not guarantee the corporation align with market niche.

Contrary example for Nokia is another mobile manufacturer, HTC.  With Technology Transformation alignment, HTC comparatively follow the market’s needs and wants.  Its business strategy emphasizes the align of IT strategy to business (supported by market trends and reports), HTC implemented the new Android system into its smartphone production line.  Without staying with the initial Windows Mobile system direction, this company successfully maintained an ideal proportion in the smartphone market.  This is an example of using business’s decisions in formulating business strategy.  In this case, HTC archived potential growth during the recent years.  This business alignment is especially common for many Korean cellphone makers such as Samsung, bringing similar surpass against traditional mobile phone manufacturers.

Conclusion:

SAM was invented since it can be generally used by different scopes’ businesses to search of its’ best alignment model, thus smaller firms may find other quadrants beneficial to their current operation.  Business can utilize the suitable alignment model to help expanding their business into a more well-known, better reputation business as time goes on.

However, as mentioned before, SWOT has to be used to analysis the business’s need in the SAM model; what’s more is that PEST helps prevent some of the unwanted external affluence, such as expanding business in unfavorable business environment, economic downturn, culture barriers etc.

All in all, the Technology Transformation provides the generally “best alignment” for many stable and highly anchored well know business in the world.


[1] http://www.nokia.com/global/about-nokia/company/about-us/about-us/
[2] http://businessitalignment.wordpress.com/2010/12/17/the-strategic-alignment-model-of-henderson-and-venkatraman/
[3] http://www.12manage.com/methods_venkatraman_strategic_alignment.html