Organizational Change, IT and Business Process Redesign

Organizational Change, IT and Business Process Redesign

Claudio Petti (Universita del Salento, Italy) and Klein Mark (Massachusetts Institute of Technology, USA)
DOI: 10.4018/978-1-60566-669-3.ch003
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Abstract

Change in the business environment is pervasive and accelerating. New, agile, and often IT-based organizational forms are emerging. Recent management literature has paid a great deal of attention to observing and advocating this kind of organizational change. Relatively little attention has been given, however, to how to deal practically with these changes. How, for example, can companies foster the business process changes necessary to become agile? How can IT be leveraged for this purpose? In the attempt to provide some insights into these issues, this chapter will present a methodology for redesigning and inventing new business processes that relies on a handbook of process models, and is particularly suited to taking advantage of information technology to enable new organizational forms.
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Introduction

Organizations nowadays are under increasing pressure to adapt their business processes to relentless technological, political, organizational, and other changes (Davenport and Perez-Guardado, 1999). As a consequence, being flexible and adaptable has become a matter of survival for companies. Under such conditions, being able to rapidly generate good new ideas about how to meet these challenges becomes a critical skill.

A body of process innovation techniques known collectively as Business Process Re-engineering (BPR) has emerged to address this challenge (Armistead and Rowland, 1996; Chen, 1999; Davenport and Short, 1990; Hammer, 1990; Grover et al., 1995; Hammer and Champy, 1993; Kettinger, Teng and Guha, 1997b; Kubeck, 1995, 1997; Nissen, 1998, 1999; Pandya and Nelis, 1998). Despite the widespread use of these tools, however, many process innovation initiatives fall short of delivering the hoped-for results. While they typically aim for revolutionary change, they often result in only incremental improvements (Stoddard and Jarvenpaa, 1995).

We can understand why this is so by considering the nature of current BPR techniques. While there are plenty of techniques (such as IDEF, Process Flowcharting, Statistical Process Control and so on) for modelling and analyzing as-is business processes, there are few structured techniques for designing new ones (Klein et al., 2003). The design of to-be processes is supported only by generic creativity techniques such as brainstorming and visioning, and the results of a redesign are typically highly dependent on the current process as well as the particular backgrounds of the participants.

The methodology proposed in this chapter is designed to address these limitations in existing techniques. The methodology, the fruit of a decade-long MIT research effort known as the Process Handbook project, is based on acquiring an abstract model of just the core activities and dependencies in the existing process, and then engaging in a structured and systematic exploration of process alternatives, utilizing for inspiration a large repository of best-practice business process models, i.e. a Process Handbook.

This chapter will present this methodology. We will begin with a brief description of how this methodology differs from traditional process redesign techniques, and review the key concepts on which it is based: Process Specializations and Inheritance, Dependencies and Coordination Mechanisms, Exception and Handlers. We will then use the case of a real-life risk management process to illustrate the steps of the methodology and demonstrate how some of its concepts (such as inheritance and exception handling) can be used to design more effective and robust IT-based processes by enabling easier and more structured gathering of software requirements, reducing the possibility of misunderstandings between IT experts and business people, and reducing software bugs. Finally lessons learned from the application of this methodology to IT-based process redesign will be drawn, and we will provide some perspectives on avenues for further research and improvement of the methodology.

Key Terms in this Chapter

Dependency: A relationship existing among two or more activities in terms of the use and production of specific resources as input/output.

Bundle: A group of instances (processes, resources, others) put together according to a specific criteria of classification.

Exception: A deviation from the normal execution of a process that causes a delay/failure in reaching the goals that the process is designed to achieve. It can be conceived as the violation of a commitment.

Trade-off matrix: A redesign-oriented tool that allows us to compare alternative processes with respect to a given set of attributes. It allows us to evaluate the strengths and weaknesses of each alternative in terms of the attributes relevant to the redesign goals.

Handler: A mechanism/process that manages an exception by anticipating and avoiding, or detecting and resolving it.

Goal: A desired state, i.e. an objective that the process or a part should achieve under normal conditions.

Deep Structure: The abstract structure of a process, expressed in terms of its core parts and the key dependencies arising among them.

Specialization: A different alternative way of executing a process or a part of it. A specialization is usually defined in terms of why, where, who, when and how a process is executed.

Recombinator: A redesign-oriented tool that allows us specify an alternative structure for a process by creating different combinations of its specializations.

Coordination mechanism: A mechanism/process that manages a specific flow, fit or sharing dependency arising among parts of a process.

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