Chapter 4 IT Enabling

Agenda Old ways of IT thinking New ways of IT thinking Business process reengineering (BPR)

Old IT Thinking New tool replacing old tool –Pencil by PC –Magnetic tape by disk Changing HOW something’s done not WHAT is being done

Old IT Thinking Method: deductive reasoning –Start with existing mindset –Define the problem –Seek alternatives –Select the best alternative –Problem definition limits possible solutions –The continuous problem

Agenda Old ways of IT thinking New ways of IT thinking Business process reengineering (BPR)

New Way of Thinking Break existing rules that limit how to conduct work –What –Who –Where –When Method: inductive reasoning –Find new powerful technology & solution –Seek problem it might fit –Problems firm doesn’t know it has YET!

New Way of Thinking Old rule (OLD) Disruptive technology (DT) New rule (NEW) Gain

Information Transfer OLD: independent information appears in only one place at one time DT: database & telecommunication NEW: integrated information appear simultaneously in as many places as need GAIN: decrease cycle time

Complex Work OLD: experts perform DT: expert systems (ES) NEW: generalists perform GAIN: decreased expert cost Employee empowerment Consistent decision

Centralization or Decentralization OLD: firm chooses one only DT: telecommunication & networks client/server NEW: firm can have both GAIN: local autonomy (quality) Minimal loss of control

Decision-making Level OLD: mangers decide DT: expert systems (ES) decision support systems (DSS) NEW: decision-making part of all jobs GAIN: cycle time employee empowerment quality productivity

Central Office OLD: employees need office DT: portable computers telecommunication & networks databases NEW: telecommuting GAIN: cycle time productivity

Customer Contact OLD: best customer contact is personal contact DT: Internet NEW: tailed customer contact GAIN: customer commitment

Location Resources OLD: find where resources are DT: automatic ID/tracking systems NEW: systems locate the items GAIN: cycle time/real-time

Agenda Old ways of IT thinking New ways of IT thinking Business process reengineering (BPR)

Business Process Reengineering (BPS) Rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance Methods –Redesign (process) –Retool (information system) –Reorchestrate (network-type organization)

Business Process A set of tasks that directly support the achievement of business objectives by providing a product or service for a customer

BPR Sequence Assess firm’s competitive position –Demand chain –Supply chain –Management Build the vision of future –Decrease cycle time –Decrease costs –Increase quality –Increase customer satisfaction –Add value

BPR Sequence Use new ways of IT thinking to turn the vision into reality –Management integration –Mass customization (collaborative, adaptive, cosmetic, transparent) –Empowerment/self-directed team –Redundancy elimination –Networked organization –Virtual organization

Points to Remember Old ways of IT thinking New ways of IT thinking Business process reengineering (BPR)

Discussion Questions How do you use Internet to change the critical processes for –A university? –A manufacturing firm? –A department store? What kind of benefits will be encountered by the management from the usage of Internet? What kind of problems will be encountered by the management from the usage of Internet?

Assignment Review technology guides 1-2 & chapters 1- 4 Read chapters 5, & technology guide 4 Group Assignment Research paper