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IS 788 [Process] Change Management

Wednesday, September 2

Reminder: Pac Bell has been moved to Wednesday, 9/9

Lecture: Strategy and process architecture (1 of 2)

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Alignment Alignment with organizational goals

and strategies is a top priority for process and IT development

Exceptionally difficult to achieve Turf wars (local optimization, global

sub-optimization) IT (and process architects) at too low

an organizational level Lack of clearly stated goals and

strategies! (UNR as example)

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Alignment begins with a clearly defined strategy

Strategy: how a company will compete, what its goals are and what policies will support those goals

Formal strategies (SWOT analyses) vs. informal strategies (a calibrated gut)

Porter’s strategy analysis:

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Three phase process Determine the current position of

the company Determine what is happening in the

environment Strategize to get from where you are

to where you want to be given the current and anticipated environment

Some analysts believe formal strategies are too confining for the fast pace of the 2nd millennium

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Environmental analysis (Porter)

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Seeking “sustainable strategic advantage”

Barriers to entry: Large capital investment Established branding in a market

segment Proprietary product/process Process, people and technology

smoothly and tightly integrated (v. difficult to imitate!) This is similar to what Porter calls

‘fit’

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Value Propositions Abstractions (generalized views) of

what your organization does and sells

Examples: Bookstore entertainment and or

information provider Taco Bell warming and serving food

(NOT a restaurant, NOT food preparation)

(hair) Salons ‘experience providers’ ala ‘the experience economy’

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Value Propositions – help you understand the need you are satisfying – and focus efforts

Competitive strategies: Cost leadership – dangerous – can lead

to ‘hypercompetition’ and commoditization; Dell, for example, eventually squeezed the profit out of desktops even for itself! Harmon, p.44 discusses Porters negative view

of excessive stress on operational effectiveness

Differentiation Niche markets (extreme differentiation)

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Automotive product positioning

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From strategy back to process Focusing on value chains and value

propositions helps to distinguish between value adding activities and non-value adding activities

Work processes can then be refined so that most organizational effort is directed to core process: what the organization does best and uniquely to provide value to customers

Non core processes can be selectively outsourced

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Competitive advantage When your company can make more profit

in a market than competitors This requires good strategic position

arrived at via strategic analysis which is backed by difficult to replicate ‘fit’

Fit (again): when process activities are tightly integrated with each other and underlying technology

Good fit overall is superior to any single exceptionally efficient process

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So, how does alignment happen?

IF it happens, it is because it is given high visibility and resources within the organization

Frequently, successful organizations have formal business process architectures (how processes fit together to achieve organizational goals) overseen by formal committees of high level executives

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The alignment cycle

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Mapping Strategies to Goals

It should be possible to map strategies to organizational goals

When this mapping is graphically rendered it becomes a powerful tool for communicating with all levels of the organization and identifying new processes or process change/improvement/ candidates

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Strategic Activity Map

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Maximize effectiveness Almost any process can be made

more efficient, but most are not strategic

Most businesses evolve too rapidly to permit formal analysis and documentation of all processes

Determine the processes linked most closely to strategic goals – these are prime targets for redesign

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Multiple core value processes for a bank

Management

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Each process redesign requires a team from multiple functional areas

To optimize organizational objectives a high-level steering committee is invaluable

Recall “Failed ERP” – decentralized structure with no high level guidance

Managing multi-department teams is a challenge in itself – discuss matrix organizations – Lecture2.2, ppt #10

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Industry Standard Process Architecures

The text overviews the Telecommunications Business Process Framework (eTOM) in Ch. 4

For 788 this is notable primarily as a market (telecom) initiative which may lead to standardized (commoditized) processes – anticipating the Davenport HBR paper

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The process hierarchy To some degree the definition of

process, subprocess and activity is arbitrary.

A Value Chain is typically the largest process class in an organization, ranging by definition across multiple functional areas

A process is a logically distinguishable sub-portion of a value chain. Some authors call these ‘tasks’

An ‘activity’ is wherever you choose to stop modeling lower levels ;-)

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The process hierarchy

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Deciding what type of change effort is called for Process change types:

Design – new product or service Redesign – a major effort for significant

improvement Automation – a largely manual process is

redesigned for IT assistance Improvement – incremental refinement of

process for small percentage improvement A change in the management of a process

rather than the process Outsourcing – following a non-core

determination

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A process / strategy matrix (p. 83old)

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Putting it all together

Determine strategy Goals to implement the strategy Process changes to achieve goals Prioritize and begin modeling

and re-engineering

With detailed sub-steps added it looks like this:

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Additional Alignment Tools Balanced Scorecard (BS) – for overall

organizational measurement Steers (accounting oriented) managers away

from strict financial measurement Financial measures + Customer measures + Process measures (internal business) + KM measures (innovation and org. learning)

Harmon points out that there is NO sense of a value chain and thus BS best supports a functional organization rather than a process org.

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Balanced Scorecard

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Organizational Positioning

Basically YASDM – yet another strategy determination method

But, a nice ‘lens’ for viewing the organization that yields some good insights

You can map either your processes or your goals to this concept

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Organizational PositioningBased on the notion ofthree distinct customer types:1.Operational (cost) focus2.Service focus3.High performance products

Position your company to best serve your dominantcustomer type.

cf. Moore’s diffusionof innovation theory:innovators, early adopters, middle majority, laggards.