Chapter 5 - TECHNOLOGY SOLUTIONS vs. PROCESS SOLUTIONS
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Objectives After completing this chapter, you will:
Introduction In chapter 2, we discussed the need for a process approach to reengineering. These days, technology supports almost every business process that exists. It has become virtually impossible to make process changes without considering the impact those changes will have on supporting technology. In this chapter we will discuss the appropriate ways to use technology in business process reengineering. Technology Solutions/Adapting New Technologies In many circles, upgrading to new information systems has become synonymous with business process reengineering. It is not. Technology solutions go hand-in-hand with process solutions but in no way replace them. While it is possible to decrease cycle time or increase accuracy through information technology solutions, the result of a technology solution, void of process improvement, is only to reinforce a bad process. For example, a company can automate its requisitioning system Ð electronically reconciling purchase orders against incoming invoices. But until the process is examined, no one will realize that paying directly from purchase orders and eliminating invoices entirely is more beneficial for both the customer and supplier. Before looking for technologies to improve your process, you should always define the most efficient process for getting from ÒstartÓ to Òfinish.Ó Only then can we start looking for technologies that will support the process. The two cases that follow illustrate the integration of process improvement and technology changes. Hallmark identified a need to standardize reporting formats to consolidate business data while still maintaining the flexibility to report differently at the operational sites. In their case excerpted from Infoworld, the ad hoc information systems were actually preventing them from working more efficiently. While the solution they found resulted in new information systems, it was not driven by information systems so much as the needs of the finance department. Schlage, on the other hand, began by identifying a customer need and determining that an information technology change was necessary. The process was driven by information systems, but part way through, the team realized that to make a dramatic change they needed to change the process as well. While this took much more effort in the form of employee communication and change management, it brought about much greater change in the organization. HALLMARK1 While the companyÕs cards for every occasion have made it easier for people all over the world to stay in touch with friends and relatives, HallmarkÕs financial managers had less luck communicating. Hallmark management was laboring under an unwieldy and time-consuming financial reporting process. Although the reporting problems were largely the product of positive events Ñ such as HallmarkÕs strong sales growth and expansion in the United States and an aggressive campaign of international acquisitions (22 subsidiaries were acquired by the international division in a two-year period) Ñ the growth resulted in financial data that was often old and irrelevant. HallmarkÕs Achievements
Slow, Not Steady In the past, HallmarkÕs corporate finance department, based in Kansas City, Mo., performed consolidations and reporting on a mainframe-based system while the international division and its reporting locations used a PC-based approach. Collecting and consolidating business data from these many far-flung operational sites had always been time - consuming and inflexible . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Making things even slower was collecting and consolidating information from the international units. Hallmark International is grouped into 50 business entities around the world. Those entities would consolidate their data to 13 groups, which would in turn send the financial data by E-mail to Hallmark InternationalÕs Kansas City headquarters. Consolidating and then generating useful information about the companyÕs performance out of this mass of financial data was difficult, especially with the international units on PC-based systems. The unitsÕ use of multiple spreadsheets and programs required any information extracted from these systems to be handled several times. And generating ad-hoc reports from the data once it was consolidated was also difficult, requiring as many as 12 hours for financial analysts to create the most basic management reports, such as a summary of shipments from an individual subsidiary. ÒTo do product line profitability reporting and look at different components of the business was previously hard to do under our old, Focus-based system,Ó Cox says, referring to the corporate mainframe Ñ an IBM machine running the Information Builders Inc., Focus database management system. .....1-800-862-4272 |
