Chapter 5: building and changing global business processes

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A typical hierarchical structure is organized by function (silos) or core competency. What attributes define these “silos”?
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optimize expertise and training. avoid redundancy in expertise. are easier to benchmark with outside organizations. utilize bodies of knowledge created for each function.
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what are the advantages of a process perspective?
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Allows the manager to concentrate on the work that must be done to ensure optimal creation of value. Avoid or reduce duplicate work, facilitate cross-functional communication, optimize business processes, and best serve the customers and stakeholders.
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Describe the silo perspective by definition, focus, goal accomplishment and benefits
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Self-contained functional units such as marketing, operations, finance, etc. Functional Optimizes functional goals, which might be suboptimal organizational goals Highlighting and developing core competencies; functional efficiencies
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Describe the business process perspective by definition, focus, goal accomplishment and benefits
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Interrelated, sequential set of activities and tasks that turn inputs into outputs Cross-functional Optimizes organizational goals or the “big picture” Avoiding work duplication and cross-functional communication gaps; organizational effectiveness
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What are the two techniques used to change business processes?
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Radical process redesign. Also called business process reengineering (BPR) or simply reengineering. Incremental, continuous process improvement. Includes total quality management (TQM), also called quality management and Six Sigma.
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What’s good about incremental change?
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Workers often react favorably to incremental change. Gain control and ownership of improvements. Render change less threatening.
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When is radical change useful?
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Appropriate for addressing cross-functional processes. Helps attain aggressive improvement goals. The goal is to make a rapid, breakthrough impact on key metrics Used only when major change is needed in a short time.
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What is defined as “workflow” and what does it include?
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A series of connected tasks and activities done by people and computers to form a business process. Workflow includes software products that document and automate processes. Workflow software facilitates the design of business processes and creates a digital workflow diagram.
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What are BPM systems?
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Business process management systems; are a way to build, execute, and monitor automated processes that span organizational boundaries.
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Give example of enterprise applications/enterprise systems
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Enterprise Resource Planning (ERP), Supply Chain Management (SCM), Customer Relationship Management (CRM), and Product Lifecycle Management (PLM) systems
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Give an example of common CRM systems
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Oracle, SAP, and Salesforce.com
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Define SCM systems?
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Supply chain management (SCM) systems manage the integrated supply chain. Processes are linked across companies; a companion process at a company’s customer or supplier creates an integrated supply chain.
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what is workflow coordination?
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The coordination, integration, and automation of critical business processes between partners.
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What are PLM systems and what are they used for?
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PLM systems automate the PLM steps starting with the idea for a product and ending with the “end-of-life” of a product. Includes the innovation activities, new product development and management, design, and product compliance.
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what are the benefits of ERP systems?
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All modules easily communicate together with efficiency. Useful tools for effectively centralizing operations and decision making. Reinforce the use of standard procedures across different locations. Redundant data entry and duplicate data may be eliminated. Standards for numbering, naming, and coding enforced. Data and records can be cleaned up through standardization.
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What are the disadvantages with ERP systems?
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Implementation requires an enormous amount of work. Requires redesigning business processes to achieve optimal performance of the integrated modules. Organizations are expected to conform to the approach used in the enterprise system (e.g., change organization structure, tasks). A hefty price tag: additional costs for project management, user training, and IT support. Sold as a suite rather than individual modules.
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When is it appropriate for the enterprise system to drive business process redesign?
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it is just starting out and processes do not yet exist. operational business processes are not a source of competitive advantage. current systems are in crisis and there is not enough time, resources, or knowledge in the firm to fix them
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When is it inappropriate for the enterprise system to drive business process redesign?
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changing processes that are relied upon for strategic advantage. the features of available packages do not fit the needs of the business. there is a lack of top management support.
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What are the challenges in integrating business systems between companies?
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Deciding what to share, how to share it, and what to do with it when the sharing takes place. Agreeing on security and encryption or other measures to protect data integrity and ensure that only authorized parties have access. The complexity of the integration can be reduced by insisting on standards—either at the industry level or at the system level.

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