Business Process Management Strategy

November 25, 2017 Management

Table of Contents Executive summary3 BPM and Strategy4 Problem Analysis7 Proposed Solution10 Solution Considerations16 Recommendation17 Appendix18 Bibliography19 Executive summary Purpose The purpose of this report is to examine the current situation of Omnicrons Pty Ltd Company and attempt to identify problems which result in declining sales and reduced profits since 2008. Methodology Research for this report is based on current literature about business process management and relevant companies, transcript of the management meeting, financial statements, and other miscellaneous information supplied by Omnicrons’ CEO.

Findings The major findings indicate the lack of a streamlined computer-based business system, coordination amongst departments’ managers and employees, IT facilities and equipment. These cause a range of consequences such as decreased revenues, rising customer complaints and waning customer responsiveness. Recommendation It is recommended that the Omnicrons should implement an enterprise resource planning system and invest in purchase and upgrade of IT facilities and equipment. BPM and Strategy

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The decline in Omnicrons’ profits over recent years, which results from shrinking sales and mounting expenses has raised the alarm over the effectiveness and efficiency of the business, and necessitate changes in the business processes. The competition is quite intense because Omnicron is a relatively new and unfamiliar invention compared with common competitor products. Though the company has focused on differentiation strategy with the Omnicron’s brilliant features, it has still not yet fully developed an appropriate marketing plan and lacks bold attempts to broaden the consumer base and expand market share.

More importantly, the company functional structure has caused a series of delays and lack of transparency amongst departments. Business process management (BPM) is essential for restructuring, reorganizing and creating a more effective and efficient business. Its ultimate aim is to assist the company to accomplish goals and objectives via the management, control and constant development throughout the entire business processes. BPM helps to enhance and administer business processes across all functions.

It extensively uses information and communication technologies as a tool to facilitate the execution of processes, input and storage of data, and monitor performances on an enterprise and real time basis. Therefore, delays can be substantially reduced, visibility is widened, costs and quality can be better managed, and integration among departments can be improved. It should be noticed that BPM closely integrates business processes with the company’s strategies and also allows hard strategic options to be decided by the managers and executed by the whole company.

The benefits of BPM to Omnicrons can have direct or indirect impact on the internal and external perspectives by improving the structure and positioning of the business. Some of the keys benefits of BPM which also connects business strategies are discussed further: * Improved efficiency: BPM connects all the activities included in the process right from the beginning till the end in a very orderly form. In this way delays can be avoided and also improve process efficiency (Silver B, 2006). Control and Compliance: In any form of business, control over its processes is very important feature and BPM plays a vital role in delivering this benefit. BPM also fosters the company’s standardization by compliance with the rules & regulations and best practices & policies. This will ensure Ben Omicrons in maintaining the value proposition with its customers i. e. get the right information to the right person at the right time (Altman, 2009). * Agility and Rapid Results: BPM enables to bring the newest technology in order to help the implementation process and achieve the best results very quickly.

This is one of the important techniques for Service Oriented Architecture business like Ben as SOA has become new revolution of BPM (CIO readings, 2010). BPM needs a specific strategy and clear objectives and measures to guide improvement initiatives and determine the target of improvement efforts. It supports the competitive differentiation strategy that Omnicron is adopting, assists the positioning of Omnicron as a multitask smart wrist accessory with its exclusive features and design. BPM can help the company leave its competitors far behind by agilely responding to market changes (BPM Reports, 2007).

Below is the positioning map describing where Omnicron is targeting to: Problem Analysis Ben’s Omnicrons Pty Ltd is a company with a highly functional organizational structure. The managers and employees of six different departments are focusing too narrowly on their own tasks, performing them in isolation without comprehending previous and subsequent steps outside their functional “silos”, therefore losing the sight of the whole picture of the larger business process (Magal ; Word, 2009).

Lack of sufficient communication leads to lack of consideration of workers from each functional group to their consequences for the other components of the process. The company had never put much effort and time into developing streamlined, computer-based and IT utilized business process. The overwhelming reliance on paper-based manual methods to get things done has resulted in the insufficient coordination of the whole value chain. The table below specifies major problems and its respective causes and consequences.

Below is the As-Is process diagram for Omnicrons: The scoping diagram above identifies process flow, day to day management, inputs and outputs, controls and enablers problems. Proposed Solution Business Process Architecture (BPA) is defined as a “body of knowledge of which summarises the business processes incorporated by the value chain set up by the organisation” (Harmon, 2007). BPA is framework which offers a diagrammatical representation right from the upper level to the lower level of an organisation’s process value chain.

Developing BPA would not change any level or departments in the organisational structure but it will build a conceptual framework of all the processes within the organisation in order to achieve its corporate strategy goals and build a competitive advantage over its competitors (Travers M, 2009). The following graphical representation shows how a business process hierarchy looks: BPA will benefit Ben and its business in many aspects: * A proper understanding of the existing processes and its importance which can enable to improve the company performance. The conjunction of business processes and its available resources to company’s strategic goals. * Improvement in IT efforts of the company which will make the system more automated and systematic. * Finally, quick decision-making to the changes in business needs with rapid results (Travers M, 2007). Below is the To-Be process diagram for Omnicrons: The To-Be processes are described below: The Procurement process 1 Production and Purchasing Departments are informed by the ERP about the latest, updated details of inventory in real time upon every query. 2.

Production is responsible for maintaining the amount of raw material or product. ERP reports the data that production manager requires to prepare purchase order. 3. Purchase receives purchase request via ERP. Purchase data are acquired through the ERP in order to prepare purchase order, which will be sent to Suppliers. 4. Production receives shipment from Suppliers. Material quality and quantity are examined and cross-checked with purchase order. 5. Accounting cross-checks the invoice with the shipment in order to ensure the exact amount of received material. Then a payment is prepared and sent to Suppliers.

The final task for accountants is to record all the important transactions in the procurement process. The Fulfilment process 1. Sales department receives purchase order from customers via Company Portal. In the Customer Database of ERP, customer information including name, contact, billing and shipping addresses, order date and order items will be automatically updated and recorded. By retrieving customer purchase order and inventory data, Sales enters sales order into System. 2. After receiving sales order data, shipment is prepared by Production with the help of Logistics.

The routine tasks are picking, labelling and packing (with an aid of continuous updating information provided by ERP Systems). If the system recognises unavailable stock, the Procurement process is triggered in order to acquire necessary material for Production. 3. After shipment is delivered by Logistics, Accounting retrieves and checks all sales details and decides what to be listed on the bill. An invoice with accurate billing details will be prepared on ERP Systems, and sent to customers through the Company Portal. 4. When Payment is fulfilled, Accounting will record the transaction into the System.

Proposed solutions It is suggested that Omnicrons Company should immediately establish and utilise computer-based systems to replace the current paper-based manual methods. They will significantly reduce the time and costs of capturing, storing and retrieving data related to process activities. At General Bottlers, a part of Pepsi international company, data used to be manually entered into paper form, but now they implement an analytic platform called Statistica to automate the data input and improve data analysis and quality monitoring (Keirsey, 2009).

It is more important to increase the efficiency of information exchange among departments and enhance the effectiveness of management throughout the entire processes by setting up an integrated Enterprise System (ES). Such system will both assist the execution of individual parts of the process and support the coordination of those parts across different functions. In 1998, Apple Inc. had to implement an ES to cope with the business growth and provide access and visibility of processes to employees throughout Apple’s spectrum of operations (Information week, 1999).

Specifically, there are several types of ES that Omnicrons may consider to establish. The most important intracompany ES is an Enterprise Resource Planning (ERP), which mainly deals with internal operations and integrates departments’ functionality and processes. LEGO Company integrates ERP to simplify and standardise processes, and benefits from useful information offered from SAP applications for advanced management control and quick respond to opportunities (IBM, 2010).

Other intercompany ES’s include Supply Chain Management (SCM), Supplier Relationship Management (SRM), Customer Relationship Management (CRM), and Product Life Cycle Management (PLM). This application suite provides a broad and comprehensive integration of almost all aspect of the business. Toyota in Europe applies CRM in response to expanding volume of customer information (Hill, 2007). With the acquisition of SCM, Volvo Construction Equipment has reduced lead times, inventory levels, while increased revenues and improved market share (SAP, 2002).

With the aid of Service-oriented Architecture (SOA), a set of technologies based on internet, Omnicrons can connect their ES’s with the ES’s of suppliers, customers and other companies to facilitate transactions and management. ES application suite All data are included, summarised and organised inside the ES instead of existing outdated and separate databases: organisational data help the configuration process; master data about clients, suppliers, employees, product specifications and stock holdings are required by multiple functions for repeated execution of activities; and transaction data about specific day-to-day activities.

Kamco Plastics has centralised the databases within ERP and decreased redundant activity (Exforsys, 2010). In order for the change from manual paper-based methods to computerised systems to succeed, IT training courses should be provided to employees to help them obtain at least basic knowledge, and improve current computer literate staff to be power users. In the meantime, the company need to invest and upgrade office equipment and may also consider setting up an IT department in the future.

Moreover, it is advised to create reward, incentive and bonus programs and set specific goals and objectives in order to motivate and encourage the work performance of managers and employees. It is essential to align their goals and department’s strategies with those of the company. Quality control and performance measures should be applied across the process. Solution Considerations * Time: * The ES may take substantial amount of time to be implemented and effectively operate. * Staff needs time for appropriate training to enhance their IT skills and get familiar with the ES. * Money: The implementation of a comprehensive set of ES’s including ERP, SCM, CRM, SRM; PLM etc. may exceed the company’s budget. * The purchase and upgrade of IT facilities and office equipment may be very costly * Maintenance cost for ES’s may be very high. * Risks: * Problems may arise during the implementation and operation of ES such as system break-down without sufficient technical skills and support. * Managers and employees may be reluctant to changes in business process. * Opportunity cost: * The implementation of ES takes time and budget which could be spent for research and development or other projects. Recommendation immediately establish and utilise an enterprise resource planning system * engage with process change consultants for assistance in the implementation of ERP * consider establishing the entire enterprise system application suite * provide IT training to staff about the usage and operation of office softwares and enterprise systems * invest in upgrading and purchase of office equipment and IT facilities * create and apply quality control and performance measure throughout the business process * provide reward, incentive and bonus program and set specific goals and objectives to motivate managers and employees’ performance * discuss with human resource manager about problems which may occur during business process changes * organise a meeting or private informal chat with managers to understand more about the tensions and conflicts among them and attempt to find a resolution * reconsider organisational policies and business rules and check their effectiveness * consider opening a retail store front * immediately conduct researches on the market and develop a solid marketing strategy Appendix BPMN symbols| Notes| | An activity: task that company performs. Activities take time and can be composed of activities. | | An Event: something that happens during the course of the business process. It is a point in time. | A gateway: shows the divergence of convergence of a sequence flow. It might indicate : 1. Forking or merging Activities. 2. A Decision determines which of two or more subsequent flows is to be followed. | | A sequence flow: shows the order of activities performed in a process. | | A pool with swimlanes: provides context for a set of activities. Departments or Roles or Participants are described in the boxes on the left. Activities and flows are described in the boxes on the right. Two pools used to indicate that an organization/individuals within separate organization working together on a common process. | | An Event: Initial or Start of a process.

Something occurs which starts or triggers a process| | An Event: Terminal or End of a process| Bibliography Altman R. , 2009, “People relationship Management: Completing the BPM Value Proposition”, People serve Inc, USA viewed 23rd December 2010 http://www. peopleserv. com/pdfs/PeopleRelationshipManagement. pdf CIO Readings, 2010, “Five Key Benefits of Business Process Management” viewed on 17th December 2010 ;http://cio-readings. blogspot. com/2007/04/five-key-benefits-of-business-process. html; Exforsys (2010), ERP success cases, Exforsys, viewed 15 December 2010. http://www. exforsys. com/tutorials/erp/erp-success-cases. html Harmon, P. 2007), Business process change, a guide for business managers and BPM and six sigma professionals, 2th edn, Morgan Kaufmann Publishers, MA, USA Hill, G. (2007), Make change stick: How Toyota implemented Lean CRM, Customerthink, viewed 15 December 2010. http://www. customerthink. com/article/make_change_stick_toyota_lean_crm IBM (2010), LEGO creates model business success with SAP and IBM, IBM, viewed 15 December 2011. Information week (1999), Hard sell, 1 March, 1999. http://www-01. ibm. com/software/success/cssdb. nsf/CS/STRD-85KGS6? OpenDocument Isenger M, 2007, QPR Software Plc, ‘Linking Business strategy with Process Excellence’, viewed 21st December 2010 http://www. fovea. om/Demofiles/White%20Papers/BPM/Linking%20Business%20Strategy%20with%20Process%20Excellence. pdf Keirsey, F. (2009), Pepsi saves time using STATISTICA Enterprise for quality monitoring and control, StarSoft, viewed 15 December 2011. http://www. statsoft. com/Portals/0/Customers/Success_Stories/Pepsi_Case_Study. pdf SAP case studies (2002), Acquisition integration yields supply chain performance gains and improved market position, SAP, viewed 15 December 2010. http://www36. sap. com/solutions/business-suite/scm/pdf/volvo_50059583s. pdf Silver B, 2006, ‘Five Reasons to Invest in Process Management’, Intelligent Enterprise, viewed 3rd January 2011.

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