A Case Study on Enterprise Transformation in a Medium-Size Japanese IT Service Provider Business Process Change from the Ontological Perspective May 13 th, 2013 Sanetake NAGAYOSHI, Ph.D Tokyo Institute of Technology, Japan 3rd Enterprise Engineering Working Conference (EEWC

Self-Introduction Major – Management Information System – Enterprise Transformation – Business Process Management Practical Experience as a business consultant Affiliation – Associate Professor in Tokyo Institute of Technology, Japan – Associate Professor in Egypt-Japan University of Science and Technology (E-JUST),Alexandria-Egypt 2

Conclusion – Based upon the case study on the enterprise transformation of divisions in Company A i.it is not always necessary to change the ontological level of business process in market development ii.it is necessary to change the ontological level of business process in product development iii.it is necessary to reengineer the ontological level of business process in diversification 3

Introduction Organizational change and transformation is an important research topic Traditionally, organizational change and transformation mainly focuses on the change in organizations structures Discourses on organizational transformation has begun to draw from many other disciplines and various perspectives – Process-based research in understanding how and why organizations change and transform 4

Objectives To describe business process change based on the case study of enterprise transformation from the ontological perspective The relationship between market diversification (in Product-Market Grid) and business process change from the ontological perspective is analyzed and discussed 5

Product-Market Grid 6 Ansoff (1965)

Research Method (1/2) Actor Transaction Diagram in DEMO (Design and Engineering Methodology for Organization) for describing business process 7

Research Method (2/2) Qualitative Research – Case Study in Company A, Medium-Size Japanese IT service provider – Interview : 4times for 7persons First interview: Director Second interview: CEO and technical director Third interview: Sales manager and technology manager from the second solution division Fourth interview: Sales manager and technology manager from the first solution division 8

Case Study Overview : Company A Medium Size Japanese IT Service Provider As a software provider in 1969 Several well-known application software packages in 1980s Main Customer – Local government in Japan, Wholesaler – Large scale IT Service Providers in Japan: as sub- constructor in projects – No consumer 9

Case Study Five Transformation Stories in Company A Division 1 (A) – Story1: From a software package provider to an application service provider Division 2 (B-1,B-2) – Story2:Systems Integration Service for new market – Story3:Organizational change for continuing the service Division 3 (C-1,C-2) – Story4:Start new product – Story5:New market entry with the product 10

Story1: From a software package provider to an application service provider (A) 11 Company A Local Government Product Software Company A Local Government Infrastru cture with Software Service BeforeAfter Transformation

Story1: New Product Development on Product-Market Grid 12

Story1: Business Process Before 13

Story1: Business Process After 14 Added process (Actors, Transactions)

Story2: From Sub-Contractor to Primary Constructor (B-1) 15 Plan Develop Maintain Plan Develop Maintain Consulting Firm Software Developer Self Systems Integrator Consulting Firm Software Developer Software Developer Systems Development Japan Systems Development Overseas Primary Constructor Sub- Contractor Systems Integration Service In Japan

Story2: From Sub-Contractor to Primary Constructor (B-1) 16 Large Scale Systems Integrator (Primary Constructor: Company B) End Customer (Telecom company ) BeforeAfter Transformation Company A Other Sub-Con Other Sub-Con Sub-Contractors Complete System Company A (Primary Constructor) End Customer (Distributor: Company C) Other Sub-Con Other Sub-Con Other Sub-Con Sub-Contractors Complete System

Story2: Diversification on Product-Market Grid 17

Story2: Business Process Before 18

Story2: Business Process After 19 Drastic Change

Story3: Organizational change for continuing System Integration (B-2) BeforeAfter Transformation Company A (2 nd Division) End Customer (Other Customers) Sub-Contractors Complete System Sales Eger,PGer End Customer (Company C : Distributor) Complete System Company A (2 nd Divison) SalesEger,PGer Prime Center Sub-Contractors 20

Story3: Market Development on Product-Market Grid 21

Story3: Business Process Before 22

Story3: Business Process After 23 Same as Before

Story4: Start New Product (C-1) 24 Company A Customer Product Software Company A Customer BeforeAfter Transformation Product Other Company Modified Software Acquire Soft ware modify

Story4: New Product Development on Product-Market Grid 25

Story4: Business Process Before 26

Story4: Business Process After 27 Added process (Actors, Transactions)

Story5: New market entry with the product (C-2) 28 Company A New Customer BeforeAfter Transformation Product Other Company Modified Software Acquire Soft ware modify Company A Customer Product Other Company Modified Software Acquire Soft ware modify

Story5: Market Development on Product-Market Grid 29

Story5: Business Process Before 30

Story5: Business Process After 31 Same as Before

Five stories on Product-Market Grid 32

Product-Market Grid and Business Process Change in the Five Stories 33 StoryProduct Market Grid Business Process Change Between before and after 1Product DevelopmentAdded Business Process 2DiversificationDrastic Change 3Market DevelopmentLittle Change 4Product DevelopmentAdded Business Process 5Market DevelopmentLittle Change

Result 34 Based upon the case study on the enterprise transformation of divisions in Company A 1 It is not always necessary to change the ontological level of business process in market development 2 It is necessary to change the ontological level of business process in product development 3 It is necessary to reengineer the ontological level of business process in diversification

Discussion(1/2) 35 When a company intends to sell existing products to new customers, change in business processes may not be necessary, because the company only needs to know customer information such as implicit and/or explicit customer needs and sometimes industry-specific knowledge This requires substantial changes in employee behavior, company culture, and information systems which are not observable at the ontological level This suggests that an ontological-level analysis may miss out some important changes

Discussion(2/2) 36 When a company intends to deal with new products and/or services, it needs to change business processes because production and/or service delivery is directly related with business processes

Limitation This research was conducted by a single case study Author does not have any intension to claim that the findings are universal More studies are needed to generalize the findings beyond this study 37