Week
01 Discussion – Business Processes vs. Traditional Functional Areas:
The
following are discussions posted by students.
For each discussion post read the discussion posted by the student and provide
a half page discussion response stating your point of view for each
post. Talk about what you like and what
you dislike if anything along with providing any other alternate ideas to each
post and number each response to each post accordingly.
Discussion
Post #1:
Functional areas like accounting,
finance, general management, and human resources may have specific IS
applications which operate independently, or these can be integrated to form a
more coherent functional system across departmental lines to match a business
process. The greater the degree of integration across functional lines,
the greater the potential information systems have for supporting the company
cost-effectively and for helping to identify significant strategic
initiatives. Often times the processes for traditional functional areas
overlap and focusing on business processes and improved collaboration across
functional areas can help identify inefficiencies.
Information
systems support business processes by implementing activities, serving as data
repositories, and controlling the flow of data (Kroenke, 2012). One major
advantage of focusing on business processes is to encourage collaboration
across traditional functional areas. Business processes can help to
identify inefficiencies; for example a process which can be automated by
computers, rather than done by people. The components of the information
system in this example (hardware, software, data, procedures, and people) can
come from multiple functional areas. An advantage of the traditional functional
areas may be that people are specifically trained in the aforementioned
components of their department, and can provide more detailed information when
necessary. A disadvantage of this may be an inability to change or react
quickly to changing technology and shifting demand. By focusing on
business process, abstract reasoning, systems thinking, and collaboration can
be used to experiment with different processes and manipulate
output. These skills are especially important when developing IS
applications, as experimentation may be necessary with each of the components
to achieve the desired output.
I
would think that in recent years there would be an increased emphasis on IS due
to advances in technology. Ecommerce, for example, would create a huge
demand for increased developments in computer hardware and software which would
help collect, analyze, and store data, convert the data to useful information,
and use this information as a resource to create a competitive advantage. One
of the more important disadvantages of these IS applications is their ability
is limited to how they are being used. For example, if the information
that becomes available is simply used to automate an existing process, rather
than as an opportunity for business process change, it is not being fully used
to its potential.
Hasbro,
the second-largest toy maker in the US, decided to replace its manual
vendor-inquiry process in an attempt to better identify gaps, bottlenecks and
opportunities for improvement in its manufacturing process. The company used
BP to combine planning and data analysis to develop strategic goals and track
progress toward meeting those goals using financial and operational metrics.
Historically, when customer inquired about a product, the inquiry was manually
entered into Hasbro’s operations system, printed and faxed to the product
vendor with a requested commitment date for the product. The vendor would
review the faxed inquiry, make changes, then fax the document back to Hasbro,
where an employee would enter the commitment date into the SAP ERP
system. This resulted in long lead times for delivery, errors caused by
missed calls and faxes, and little transparency into the ordering process.
Using
BP, Hasbro implemented eConnect, which automatically sends all customer
inquiries to a Hasbro employee for review. If the inquiry is not reviewed
within a specific period of time, as designated by Hasbros business rules, the
system automatically sends the inquiry to the product vendor to avoid
bottlenecks. Once the vendor receives the inquiry electronically, the
vendor responds via the portal, and that order is automatically updated in
Hasbros SAP system. The implementation was so successful that Hasbro has
been able to take days out of the vendor-inquiry process. The company has expanded
the use of eConnect to handle purchase orders, capacity analysis, shipping
notices and custom interfaces, in addition to quotes for orders. This is
an example of how effective using BP across functional areas (such as Accounts
payable, customer service, and sales in the case of Hasbro) to develop IS
applications ca n be.
As
stated by Hasbro CIO Doug Schwinn, “The purpose of a BPM system was to
drive good results, and we constantly get comments from our vendors that were
far ahead of other companies they deal with. We increase productivity on
our end and help lower costs on the vendor end, so its really a win-win for
all.” (Chen, 2004)
Chen,
A. (2004, August 2). Hasbro Plays to Win with BPM. Retrieved August 28,
2012, from Enterprise eWeek: http://www.eweek.com/c/a/Enterprise-Applications/Hasbro-Plays-to-Win-With-BPM/1/
Kroenke,
D. (2012). Experiencing MIS. Upper Saddle River: Prentice Hall.
Discussion
Post #2:
When I think of traditional
functional areas within an organization, I immediately image an organization
chart. Within the breakdown of that org.
chart, are a listing of the functional areas that make up the heart and soul of
the organization. These areas typically
include Marketing, Finance, Operations/Production, Research and Development and
Information Systems to name a few.
Within each of these units, specific needs and criteria are developed
and determined. At times, there comes a
need where a manual process will not be sufficient to get the job done and IS
applications are needed. However, before
these application(s) can be developed, an understanding of the need or
“process” behind the desired outcome is essential.
Advantages of focusing on “business
processes “as compared to “traditional functional areas”, especially while
developing IS applications.
Let’s use a simple Marketing example
to go into further detail. Let’s say a
company’s marketing department is looking to change the labeling on an existing
brand of popular soap. One of the first
things they may attempt to do is develop a focus group showcasing the existing
brand and its labeling, alongside the same brand with new labeling. Through this exercise, input produces some
sort of output. In this scenario, the
input is the panel of people reviewing the product, and the output would be the
feedback marketing receives from the panel via surveys conducted at the
end. It is important to have an
understanding and a correlation of how the process works so that you can
determine what works, what does not work, and how the process could be improved
via an IS application.
Disadvantages of focusing on
“business processes “as compared to “traditional functional areas”, especially
while developing IS applications.
Business processes become convoluted
when you begin to stray away from their intended purpose. Using the marketing example from above, if
you begin to add additional components to the process that really do not belong,
you lose sight of the vision. Let’s say
that in addition to mapping out the process of panel review and feedback, you
throw in a component of the panelists views of other products that are similar
to the bar of soap (i.e.-body washes, facial washes, etc). You’ve now complicated a simple process and
added additional factors that should have been segregated from your original
intentions.
IS applications can add to this
frustration when users automatically assume that the application is a magical
problem solver. IS applications are
meant to be an enhancement to human thinking and common sense. The problem lies when people become to
dependent upon the outcome of an application and consider it as truth without
skepticism. Until an application is
tested numerous times, the data it produces should be considered very
cautiously.
Discussion
Post #3:
For every business, the ultimate
goal is to produce a product or provide a service that contributes to the
fulfillment of the company’s mission. (In most cases, that mission is to generate
a profit and satisfy shareholders, but in other cases, such as for nonprofits,
the mission may be to generate enough income to sustain and grow the activities
of the organization. In either case, successful, final outcomes are key.) With
the final goal in mind, a focus on business processes makes more sense than
focusing on individual functional areas. Understanding the entire process, and
how all the functional areas relate to one another, will allow managers to
better identify and thereby improve certain aspects along the continuum that
may be impeding the final product or service from becoming as successful as it
could be. A focus only on functional areas, however, may in fact lead to
improvements in particular areas, but still not contribute to the final
outcome.
Health care offers a great example
for understanding this. Until recently, most hospitals and other health care
providers were very functional area-focused. Surgery, imaging, internal
medicine, therapy, etc., all necessary aspects of a patient’s overall care, did
little communicating with one another. Each department did its own thing for
the patient, and did it very well according standards established for that
particular discipline, but patients still got discharged without having an overall
favorable experience. Over the last couple decades, this lack of good patient
outcomes has been attributed in most case to a lack of coordinated care. The
hospital CEO and others managers focused only on how each department performed
its function. If the department did its work well, managers were pleased. If
problems were identified, managers intervened to make improvements. But in the
end, patients were still not satisfied.
A relatively new push in health care
is care coordination. The goals have shifted from departmental excellence to
overall patient satisfaction at the end of a care process. This has caused a
shift in management focus from individual functional areas to a focus on the
entire process, what we call the care continuum. Relationships among the
functional areas has taken on new importance, and breakdowns in communication
among these areas have become the main area of concern and investment of
resources. Computerized information systems (electronic health records) have
been found to alleviate many of the communication challenges. While functional
areas must obviously still exist, they are now able to better share vital
information with one another that contributes positively to the patient’s
overall experience. Lots of time and money is being invested in implementing
the components of our IS systems (hardware, software, data, procedures, and
people), but it is recognized as resources well spent because the patient’s
overall satisfaction is what matters in the end.
Discussion
Post #4:
Focusing
on traditional functional areas is like working in a vacuum. While it may
permit a structured process that delivers timely and accurate information that
meets the overall goal for a functional area, it does not offer scalability
across departments and/or companies. Today’s companies require adaptable
processes that interrelate and can create harmony across activities, roles,
resources, repositories and data flows, such that a company can meet the goals
of the whole organization, not a department, with speed and efficiency.
Within
an IS application, business processes from multiple functional areas can be
brought together under one umbrella. This is particularly helpful when
there are dependencies on information from various functional areas. For
instance, I work in a financial organization. We have customers that have
credit cards and checking accounts. While the Credit Card is one separate
area, and the bank is another separate area, there are activities, roles,
resources, repositories and data flows that allow us to engage both areas such
that we can create seamless business processes.
The
disadvantage is that there are high upfront cost associated with
implementing enterprise wide applications. However, it is
likely that through the implementation process, duplication of resources are
identified. This may help offset some of the early upfront costs.
Discussion
Post #5:
A business process will focus on
every aspect of an application. As stated in our textbook, it is a network
of activities, roles, resources, repositories, and data flows that interact to
accomplish a business function (Kroenke 26). In developing a IS application it
requires the process of all business functions within an
organization. Traditional functional areas focus on a specific function,
and how that functions affects the overall organization. If a IS application is
developed for an organization it will not just operate one specific
function. A business process will produce an application that is more
simplistic to process or obtain information. A business process
uses efficient functions that get the job done accurately.
In
developing an IS application it requires the use of numerous resources and a
network of activities. The disadvantage is that depending on what is
required for the application it can be very costly. Another disadvantage
is when developing any type of application there is always room for human
error. If there is inaccurate information placed into an application this
can generated insufficient data.
Sources:
Kroenke,
David. Experiencing MIS. Upper Saddle River, NJ: Prentice Hall,
2012.
