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Chapter 15 Summary Business and Information Systems Planning.

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Chapter 15 Summary Chapter 15 Summary Business and Information Systems Planning
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Page 1: Chapter 15 Summary Business and Information Systems Planning.

Chapter 15 SummaryChapter 15 Summary

Business and

Information Systems

Planning

Page 2: Chapter 15 Summary Business and Information Systems Planning.

• How important is planning?• What is its purpose (Objective)?• Who needs to do what?• What is the impact on the organization?• How can the process be kept dynamic?• What is the relationship with information systems?• Is there a right planning methodology?• Are there consistent planning success factors?

Questions that the Topic of Questions that the Topic of Planning RaisesPlanning Raises

Page 3: Chapter 15 Summary Business and Information Systems Planning.

Strategy Versus PlanningStrategy Versus Planning

Strategy is thinking through a company’s

basis for competitive advantage.

Planning is a means of establishing a strategy but it also focuses on making the strategy work.

Page 4: Chapter 15 Summary Business and Information Systems Planning.

Strategic Planning ModelStrategic Planning Model

BusinessPlan

TacticalPlan

StrategicPlan

Environment(External)

Opportunities

Threats

Strengths

Weaknesses

Enterprise(Internal)

Goals

Objectives

Strategic Positioning

Culture(Explicit/Implicit)

Business Unit

Functional Programs

MajorProjects

DetailedProjects

Resources:Headcount,Capital andExpenseBudgets

Figure 15-3

MissionVision

Page 5: Chapter 15 Summary Business and Information Systems Planning.

Planning MethodologiesPlanning Methodologies

There are many planning methodologies. Methodologies are seldom the reason for

planning success or failure. Planning methodologies are like systems

with input, processing and output all being key elements.

Key to planning is communicating the intended direction through practice.

Page 6: Chapter 15 Summary Business and Information Systems Planning.

Traditional Approach in IS PlanningTraditional Approach in IS Planning

Traditional I/S Role

Tactics

Strategy

Figure 15-2

Vision

Page 7: Chapter 15 Summary Business and Information Systems Planning.

Business - IS PlanningBusiness - IS Planning

Technology Environment

Opportunities

I/S Strategy

Determines

InformationTechnology

Benefits

BusinessStrategy

Dictates

CorporateStrategy

1) Strategic Capability

2) Technology Driven Business Change

Figure 15-7

Page 8: Chapter 15 Summary Business and Information Systems Planning.

Why IS Planning FailsWhy IS Planning Fails

Management Authority and Responsibility1. A lack of support of the planning process.

2. A failure to support the final plan through actual implementation.

3. The unexpected happens that was not anticipated by the plan. The key here is systems flexibility.

4. Too much time is spent on “turf battles” or other political issues and not enough on the desired results.

5. Impatience by senior management for results.

Page 9: Chapter 15 Summary Business and Information Systems Planning.

Why IS Planning FailsWhy IS Planning Fails

IS and General Business-related Issues1. Its outcome is stated in terms of technology and not business results.2. A lack of user understanding of how IS relates to the business

objective or a failure to accept or support the proposed approach.3. Tends to place blame on today’s environment rather than project a new

and better way of doing things.4. A lack of risk taking leads to an incremental approach that fails to

motivate people.

Page 10: Chapter 15 Summary Business and Information Systems Planning.

Final Thoughts on PlanningFinal Thoughts on Planning

Planning is a tool. There is an organizational learning curve regarding methodologies.

A good plan with no execution borders on a waste of the entire effort.

A relatively weak plan with a few strong thoughts followed by tenacious implementation can provide major business benefits.

Page 11: Chapter 15 Summary Business and Information Systems Planning.

Possible Exam QuestionsPossible Exam Questions

1.1. Identify and explain three reasons why a Identify and explain three reasons why a company would have problems developing and company would have problems developing and implementing a strategic plan.implementing a strategic plan.

2.2. What factors are most important to successfully What factors are most important to successfully align information systems with the strategic plan align information systems with the strategic plan of the company?of the company?

Page 12: Chapter 15 Summary Business and Information Systems Planning.

Chapter 16Chapter 16

Was -- Total Quality Management and Was -- Total Quality Management and The Role of Information SystemsThe Role of Information Systems

New -- Business Innovation Based

on Process Reengineering

Page 13: Chapter 15 Summary Business and Information Systems Planning.

A WIN - WIN PROPOSITIONA WIN - WIN PROPOSITION

DELIGHTED CUSTOMERS

SATISFIED

STOCKHOLDERS PROUD

EMPLOYEES

ENHANCED COMMUNITY

SUCCESSFUL PARTNERS

Figure 16-5

Page 14: Chapter 15 Summary Business and Information Systems Planning.

A Definition of QualityA Definition of Quality

“Quality” is conformance to customer

wants, needs and expectations, at a price

he or she will pay.

Page 15: Chapter 15 Summary Business and Information Systems Planning.

Total Quality Management

Of the three letters in TQM, the T is most important. Total says that you maintain a balanced focus on major business factors and business results while guarding against becoming process myopic.

Page 16: Chapter 15 Summary Business and Information Systems Planning.

TQM ALONE IS NOT ENOUGHTQM ALONE IS NOT ENOUGH

Competitor

You

Today Time

CompetitiveAdvantage

Competitive Advantage

TQM Alone

Business Process Reengineering

Page 17: Chapter 15 Summary Business and Information Systems Planning.

BPR ReputationBPR Reputation

BPR is much discussed, often belittled and even criticized as

the latest business fad or buzz words.

Those that believe in its merits suggest that its critics either Those that believe in its merits suggest that its critics either don’t understand what it is or grossly underestimate the don’t understand what it is or grossly underestimate the challenge to apply the approach successfully. challenge to apply the approach successfully.

There is no doubt that a BPR project represents a major There is no doubt that a BPR project represents a major challenge because of its broad scope and recommended challenge because of its broad scope and recommended clean slate approach. A typical high-risk, high-return clean slate approach. A typical high-risk, high-return effort.effort.

Page 18: Chapter 15 Summary Business and Information Systems Planning.

BPR is a Huge Challenge!BPR is a Huge Challenge!

For a company to achieve and sustain a competitive advantage it must continually address: Business Strategies Core Business Processes Organizational Structure Company Culture Internal Infrastructure and Support Technology

After validating existing business strategies or formulating new strategies, a vehicle to address the other factors can be business process reengineering (BPR).

Page 19: Chapter 15 Summary Business and Information Systems Planning.

BPR FocusBPR Focus Core Business Processes Organizational Structure Company Culture Internal Infrastructure and Support Technology

The results can be input to strategies and company policies and practices.

Page 20: Chapter 15 Summary Business and Information Systems Planning.

BPR Project TeamBPR Project Team

The best of five or six experienced people.The best of five or six experienced people. Really know the business.Really know the business. Broad business function representation.Broad business function representation. Excellent interpersonal skills.Excellent interpersonal skills. Full time for a month or two.Full time for a month or two. Empowered with responsibility and authority.Empowered with responsibility and authority. Clean slate approach.Clean slate approach. May decide to include a consultant.May decide to include a consultant.

Page 21: Chapter 15 Summary Business and Information Systems Planning.

BPR in SummaryBPR in Summary

An approach that incorporates:– Business leadership. – Rethinking how work is done within the

organization. – Core business process analysis. – Project management. – Change management.

Page 22: Chapter 15 Summary Business and Information Systems Planning.

BPR in SummaryBPR in Summary

Done well, BPR can make a major contribution to the on-going success of a business.

Done poorly, it can prove costly and very

disappointing.

Page 23: Chapter 15 Summary Business and Information Systems Planning.

Four Logical PhasesFour Logical Phases

1. Analysis &Benchmarking

2. BusinessProcess

Re-engineering

3. Stabilization

4. Continuous Improvement

Dramatic ShortTerm Gains

Continuous LongTerm Gains

BENEFIT

. . . minimizing the time to realize sustainable benefits

Page 24: Chapter 15 Summary Business and Information Systems Planning.

Business ManagementBusiness Management

VisionVision

StrategiesStrategies

TacticsTactics

Values& Beliefs

Values& Beliefs

Performance MeasuresPerformance Measures

Methodologies & TechniquesMethodologies & Techniques

ImplementationImplementation

• Customer Service• Flexibility• Lead time• Innovation• Quality• Cost

COMPANYLEVEL

INDIVIDUALLEVEL

Page 25: Chapter 15 Summary Business and Information Systems Planning.

Over Time Companies Have Taken a Over Time Companies Have Taken a Simple Manufacturing Process and . . .Simple Manufacturing Process and . . .

MakeMake Assemble

Assemble

Pack &Ship

Pack &Ship

ORDER CUSTOMER

Page 26: Chapter 15 Summary Business and Information Systems Planning.

. . . Complicating It. . . Complicating ItS

ales

Sal

es

Des

ign

Des

ign

Dis

trib

uti

onD

istr

ibu

tion

ORDER

CUSTOMER

FunctionalMeasures

DepartmentalBarriers

SystemsConstraints

Pla

nn

ing

Pla

nn

ing

Pu

rch

asin

gP

urc

has

ing

Man

ufa

ctu

rin

gM

anu

fact

uri

ng

Fin

ance

Fin

ance

Page 27: Chapter 15 Summary Business and Information Systems Planning.

Complex ManufacturingComplex Manufacturing

Results In:

• Large Production Batches• Long Lead Times• High Inventory Levels• Many Suppliers• Inflexibility• Complex Scheduling & Paperwork• Wrong Products in Stock

Page 28: Chapter 15 Summary Business and Information Systems Planning.

Complex DistributionComplex Distribution

Manufac-turing

LocalWarehouse

RegionalWarehouse

LocalWarehouse

CustomerWarehouse

OrderOrderOrderOrder

Supplier

Order

Leads to:

• Long Lead times• High Stock Levels• Poor Service• Many Parties Involved • Poor Quality

High Logistics Costs

Page 29: Chapter 15 Summary Business and Information Systems Planning.

Complex Business ProcessesComplex Business Processes

Sales Design Planning Purch-asing

Manuf-acturing

Finance Distr-ibution

Leads to: •More Complexity•More Overhead Costs•Longer Cycle Times •More Levels of Management

Higher Overhead Costs

Page 30: Chapter 15 Summary Business and Information Systems Planning.

Resulting in a Tendency to Resulting in a Tendency to Automate the ComplexityAutomate the Complexity

Sales Design Planning Purch-asing

Manuf-acturing

Finance Distr-ibution

Sales Design Planning Purch-asing

Manuf-acturing

Finance Distr-ibution

Sales Design Planning Purch-asing

Manuf-acturing

Finance Distr-ibution

ERPERP

MRP MRP CRMCRM

Suppliers Manufacturing Distribution

Page 31: Chapter 15 Summary Business and Information Systems Planning.

Core Business ProcessesCore Business Processes

. . . 5 or 6 Core Processes Represent 80% of the Costs

Customer Order Processing

New Product Introduction

Manufacturing

Supplier Development

Supply Chain Logistics

$

Page 32: Chapter 15 Summary Business and Information Systems Planning.

A Better Approach?A Better Approach?

Sales Design Planning Purch-asing

Manuf-acturing

Finance Distr-ibution

‘Ideal’ Process

• Eliminate all non-value add activities• The goal is a process consisting of only value-add activities

Value added (VA)

Non Value Added (NVA)

CurrentProcesses

Page 33: Chapter 15 Summary Business and Information Systems Planning.

Which of These Processes Which of These Processes Add Value Add Value to the Customerto the Customer??

PlanningPlanning PurchasingPurchasing VendorsVendorsExpeditingExpediting

ReceivingReceiving

InspectionInspection

MaterialsHandling

MaterialsHandling

StoresStores

ManufacturingManufacturing

DirectOperator

DirectOperator

Work-in-Process

Work-in-Process

SupervisionSupervisionConveyorsConveyors

RobotsRobots

AutomatedWarehouse

AutomatedWarehouse

DistributionDistribution

CustomerCustomer

ManagementManagement

AccountingAccounting

EngineeringEngineering

DataCollection

DataCollection

InformationSystems

InformationSystems

*

*

*

**

*

Page 34: Chapter 15 Summary Business and Information Systems Planning.

IS as an Integral Part of the SolutionIS as an Integral Part of the Solution

Sales Design Planning Purch-asing

Manuf-acturing

Finance Distr-ibution

‘Ideal’ Process

IT EnhancedIT Enhanced

Business Process Reengineering Business Process Reengineering

IT SolutionIT SolutionAutomates much ofthe Waste (NVA)

Eliminates Waste

Enhances Value Add

The ultimateobjective

Page 35: Chapter 15 Summary Business and Information Systems Planning.

A BPR Case StudyA BPR Case Study

Microsoft EuropeMicrosoft Europe

Page 36: Chapter 15 Summary Business and Information Systems Planning.

WORLD CLASS MILESTONESWORLD CLASS MILESTONES

World ClassManufacturing

in Ireland

World ClassManufacturing

in Ireland

World ClassLogisticsin Europe

World ClassLogisticsin Europe

World ClassBusiness Processes

for Europe

World ClassBusiness Processes

for Europe

1991

1993

1995

Page 37: Chapter 15 Summary Business and Information Systems Planning.

A New Manufacturing A New Manufacturing ApproachApproach

FROM ONE LARGE FACTORY

Two-stage manufacturing

– Duplicate disk

– Assemble product Functionally organized Complex planning and

tracking process Many short-term vendors

(Job-by-job tendering)

FROM ONE LARGE FACTORY

Two-stage manufacturing

– Duplicate disk

– Assemble product Functionally organized Complex planning and

tracking process Many short-term vendors

(Job-by-job tendering)

TO FOUR FOCUSED FACTORIES

• Cellular manufacturing– Kitted materials– Round Tables

• Self-directed, multi-skilled flexible teams

• Kanban, visible controls• A few, long-term, quality-

assured contract vendors

TO FOUR FOCUSED FACTORIES

• Cellular manufacturing– Kitted materials– Round Tables

• Self-directed, multi-skilled flexible teams

• Kanban, visible controls• A few, long-term, quality-

assured contract vendors

Page 38: Chapter 15 Summary Business and Information Systems Planning.

Manufacturing ResultsManufacturing Results Lead time 12 weeks to 1 day Raw Material & WIP 4 weeks to 1 day Finished Goods Inventory 12 weeks to NONE Quality (defect rate) 1 in 100 Quality (defect rate) 1 in 100 toto 1 in million 1 in million

Lead time 12 weeks to 1 day Raw Material & WIP 4 weeks to 1 day Finished Goods Inventory 12 weeks to NONE Quality (defect rate) 1 in 100 Quality (defect rate) 1 in 100 toto 1 in million 1 in million

Result: Result: RapidRapid low cost, high quality, low cost, high quality,

response to market demandresponse to market demand

Consequence: Traditional logistics began toConsequence: Traditional logistics began to

look inappropriate . . . look inappropriate . . .

Result: Result: RapidRapid low cost, high quality, low cost, high quality,

response to market demandresponse to market demand

Consequence: Traditional logistics began toConsequence: Traditional logistics began to

look inappropriate . . . look inappropriate . . .

Page 39: Chapter 15 Summary Business and Information Systems Planning.

LOGISTICSLOGISTICS

Ireland ships to customers every day. Rate-based products made every day and shipped directly off

the manufacturing line every day.– 60% of products are not warehoused.

Non Rate-based products are made periodically as required for replenishment and are shipped from the warehouse.

Lead-time from the warehouse is just transit time.– Worst case is three days to Central Europe

The daily rate of deliveries is reviewed weekly.– Safety stock holding is calculated as five days plus the

difference between the set rate and actual sales rates.

Ireland FGSDistributor’sWarehouse

‘A’ class (rate-based) products (60% value) - 100 items

‘B’ & ‘C’ class products (40% value) - 2300 items

IrelandManufacturing

Page 40: Chapter 15 Summary Business and Information Systems Planning.

Results of Better LogisticsResults of Better Logistics

• 1100 customers 96

• 6 warehouses 1 warehouse

• 10,000 square meters 1,000 sq. meters

• Inventory turns from 4 x 32 x

• 1100 customers 96

• 6 warehouses 1 warehouse

• 10,000 square meters 1,000 sq. meters

• Inventory turns from 4 x 32 x

Microsoft Europe

Result: Short lines of communication with

fewer, larger customers

Consequence: Traditional Pan-European business

processes began to look inappropriate.

Result: Short lines of communication with

fewer, larger customers

Consequence: Traditional Pan-European business

processes began to look inappropriate.

Page 41: Chapter 15 Summary Business and Information Systems Planning.

Results of BPRResults of BPR• Reduced complexity and volume of transactions allowed closure of

Regional Business Systems– Six AS/400 installations around Europe were closed. – The AS/400 installation in Dublin was enlarged.– Connections to sales and marketing subsidiaries maintained by MS

Network.• Reduction of Regional Establishments

– Forecasting/accounting/inventory mgmt/purchasing/distribution/ sales order processing/credit control/returns/financials was centralized in Ireland.

• Reduced complexity and volume of transactions allowed closure of Regional Business Systems– Six AS/400 installations around Europe were closed. – The AS/400 installation in Dublin was enlarged.– Connections to sales and marketing subsidiaries maintained by MS

Network.• Reduction of Regional Establishments

– Forecasting/accounting/inventory mgmt/purchasing/distribution/ sales order processing/credit control/returns/financials was centralized in Ireland.

Microsoft Europe

Result: Rapid supply through a short supply chain

using fewer, simpler transactions.

Consequence: Competitive advantage and high customer

satisfaction.

Result: Rapid supply through a short supply chain

using fewer, simpler transactions.

Consequence: Competitive advantage and high customer

satisfaction.

Page 42: Chapter 15 Summary Business and Information Systems Planning.

Critical Success FactorsCritical Success Factors Find out what the customer really wants and/or needs. Do things in the right sequence: Manufacturing - Logistics - Business

Processes Get commitment from senior management at an early stage. Functional

manager views may need to be overridden. Have a clear vision of where you want to get to and communicate it internally

and externally. Meticulously plan all transitional steps. It is during this period that customer

service is likely to deteriorate. When designing pan-European processes, evaluate all local differences and

then provide a consensus solution where possible. Do not underestimate the time required to mobilize and implement large

scale change programs.

Page 43: Chapter 15 Summary Business and Information Systems Planning.

Improvement ProjectsImprovement Projects

Problem Definition and Linkages: Ensure that improvement projects are focused on critical business issues and key success factors.

Project Management and Execution: Provide a framework for organizing, implementing and following up on improvement projects.

Improvement Process Effectiveness: Provide a way for the entire organization to learn from improvement projects and standardize results learned from them.

Page 44: Chapter 15 Summary Business and Information Systems Planning.

Leadership and ParticipationLeadership and Participation

Leadership: define management’s role in sponsoring change and focusing on achieving business success.

• Managing change

• Empowerment

• Employee development

Participation: address methods used to motivate and involve all employees to contribute to business success.

Page 45: Chapter 15 Summary Business and Information Systems Planning.

Hammer Reengineering PrinciplesHammer Reengineering Principles

1. Organize around outcome and not tasks.

2. Have those that use the output of the process perform the process.

3. Integrate information processing work into the real work that produces the information.

4. Treat geographically dispersed resources as though they are centralized.

5. Link parallel activities.

6. Put decision making where the work is performed and build control into the process.

Page 46: Chapter 15 Summary Business and Information Systems Planning.

BSP PhasesBSP Phases

Project Objectives and Scope

Learning from

Others

New Process Design

Process Transition

Plan

Implement and

Operate

Page 47: Chapter 15 Summary Business and Information Systems Planning.

BSP MotivationBSP Motivation

Improve value to customer. Pursue new business opportunities. Strengthen alignment of core processes to

business strategies. Optimize cross-functional performance. Broaden scope of activities and individual jobs

to improve operational responsiveness or flexibility.

Reduce operating costs.

Page 48: Chapter 15 Summary Business and Information Systems Planning.

Vendor Software/SupportVendor Software/Support

Project management: budgeting and project scheduling. Problem solving and diagnosis, diagramming and

cognitive mapping. Customer requirements analysis. Process capture and modeling, flowcharting, activity

diagramming and interaction modeling. Process measurement: activity based costing, statistical

process control and time and motion studies. Process prototyping and simulation. IS systems analysis and design and software reengineering.

Page 49: Chapter 15 Summary Business and Information Systems Planning.

Business planning such as critical success factors or core process analysis.

Organizational analysis and design: employee and team attitude opinion assessment, job design and team building techniques.

Change management: search conferences, assumption surfacing, persuasion techniques

Techniques for project management, problem solving and diagnosis are essential for management and basic problem analysis.

Vendor Software/SupportVendor Software/Support

Page 50: Chapter 15 Summary Business and Information Systems Planning.

Reasons BPR Projects FailReasons BPR Projects Fail

1) The lack of sustained management commitment and leadership.

2) Unrealistic scope and expectations.

3) Employee resistance to change.

Page 51: Chapter 15 Summary Business and Information Systems Planning.

Need to RememberNeed to Remember

It is Not Processes, But People that It is Not Processes, But People that

Primarily Drive Business SuccessPrimarily Drive Business Success

Page 52: Chapter 15 Summary Business and Information Systems Planning.

Total Quality ManagementTotal Quality Management

Total Quality Management (TQM) advocates incremental

changes.

This change typically includes stabilizing work methods,

strengthening employee involvement and teamwork,

heightened customer service, benchmarking processes and a

commitment to continuous improvement.

Page 53: Chapter 15 Summary Business and Information Systems Planning.

Total Quality ManagementTotal Quality Management

How do you say to a long time, loyal,

hard working employee that quality

isn’t good enough?

Page 54: Chapter 15 Summary Business and Information Systems Planning.

Total Quality ManagementTotal Quality Management

1. We are good, but we must continue to

improve.

2. Individually and/or departmentally we may

be very good but we must be as good in the

total efforts of the entire organization.

Page 55: Chapter 15 Summary Business and Information Systems Planning.

What You’d Get From 99.9% SuppliersWhat You’d Get From 99.9% Suppliers

• At Least 20,000 Wrong Drug Prescriptions Each Year.

• More than 15,000 Newborn Babies Dropped by Doctors

or Nurses Each Year.

• Unsafe Drinking Water at Least One Hour Each Month.

• No Telephone Service or Television Transmission for Nearly

Ten Minutes Each Week.

• Two Short or Long Landings at O’Hare Airport Each Day.

• Nearly 500 Incorrect Surgical Procedures Each Week.

• 2,000 Lost Articles of Mail Per Hour.

Page 56: Chapter 15 Summary Business and Information Systems Planning.

What You’d Get From Six Sigma SuppliersWhat You’d Get From Six Sigma Suppliers

• One Wrong Prescription in 25 Years.

• Three Newborn Babies Dropped by Doctors or Nurses in

100 Years.

• Unsafe Drinking Water One Second Every Sixteen Years.

• No Telephone Service or Television Transmission for Nearly

Six Seconds in 100 Years.

• One Short or Long Landing in Ten Years in all the Airports

in the U.S.• One Incorrect Surgical Procedure in Twenty Years.

• Thirty-five Lost Articles of Mail Per Year.

Page 57: Chapter 15 Summary Business and Information Systems Planning.

Leadership Through Quality at Xeroxor

Finding a Way to Save the Company thatHad Once Owned an Industry and Was

the Darling of the Stock Market

A Case AnalysisA Case Analysis

Page 58: Chapter 15 Summary Business and Information Systems Planning.

Xerox 914Xerox 914

Introduced in 1959, the 914 copier was a money machine nonpareil.

It was also arguably the finest product ever produced by any company since it combined four technologies: chemical, optical, mechanical and electronics.

By the time it was retired in 1973, it was the biggest-selling industrial product of all time, and Xerox was in the dictionary as a synonym for photocopy.

Success spoiled Xerox. To sustain its rapid growth, it needed to move beyond copiers, but what could ever measure up to the 70% gross profit margins of the 914?

Page 59: Chapter 15 Summary Business and Information Systems Planning.

Xerox History

1959 1972 1979 1980 1983 1989 1990s

914

Cop

ier I

ntro

duce

d

Com

petit

ion

Incr

ease

s

Ben

chm

arki

ng S

tarte

d

Qua

lity

Circ

les

Beg

an

Fuji

Xer

ox W

on D

emin

g A

war

d

Lead

ersh

ip T

hrou

gh Q

ualit

y

Initi

ated

Won

Bal

drid

ge A

war

d

ContinuousImprovement

Figure 16.1Source: Xerox Corp.

Page 60: Chapter 15 Summary Business and Information Systems Planning.

Indirect/Direct Ratio 2X

Production Suppliers 9X

Assembly Line Rejections 10X

Product Lead Time 2X

Defects Per 100 Machines 7X

Off the BenchmarkOff the Benchmark

Page 61: Chapter 15 Summary Business and Information Systems Planning.

Quality Through LeadershipQuality Through LeadershipProgram at XeroxProgram at Xerox

The strategy was for a cultural change that The strategy was for a cultural change that enabled and empowered people with quality enabled and empowered people with quality tools and processes to:tools and processes to:

1. Meet customer requirements.1. Meet customer requirements.2. Achieve business priorities.2. Achieve business priorities.3. Continuously improve.3. Continuously improve.

Page 62: Chapter 15 Summary Business and Information Systems Planning.

The Plan for Leadership The Plan for Leadership Through QualityThrough Quality

1983--the year of start-up activities 1984--the year of awareness and

understanding 1985--the year of transition and transformation 1986--the year when results would achieved 1987--the year of approaching maturity

Page 63: Chapter 15 Summary Business and Information Systems Planning.

Xerox Xerox PolicyPolicy Statement Statement

Xerox is a quality company. Quality is the basic business principle for

Xerox. Quality means providing our external and

internal customers with innovative products

and services that fully satisfy their requirements. Quality is the job of every Xerox employee.

Page 64: Chapter 15 Summary Business and Information Systems Planning.

Xerox’s OutcomeXerox’s Outcome

Initially: – Failed to focus adequately on core work processes

and statistics.– Plan was not integrated with business processes.– Not tuned to the company culture and the need to

change it.– Did not pick the right quality czar at the start.– Did not push the operating units hard enough.

Page 65: Chapter 15 Summary Business and Information Systems Planning.

Xerox’s OutcomeXerox’s Outcome

Finally:– Found the right cure to the ills of the company.– Quality was the right solution at the right time.– Had a committed senior management– IS was used effectively to complement changes.– Employee compensation was tied to quality.– The pursuit of the Baldridge Award was an

energizing effort within the company.

Page 66: Chapter 15 Summary Business and Information Systems Planning.

Important Supporting Elements

Recognitionand

Reward

Toolsand

Processes

TransitionTeam

Training Communi-cation

SeniorManagement

Behavior

Xerox is aTotal Quality

Company

Figure 16-3Source: Xerox Corp.

Page 67: Chapter 15 Summary Business and Information Systems Planning.

Information Systems SupportInformation Systems Support

Xerox had over 375 major information systems supporting the total business.

Over 175 of these systems related specifically to the management, evaluation and planning of quality.

The validity, accuracy and timeliness of information systems are assured by the use of a Data Systems Quality Assurance process during the design, construction and major upgrade of each information system.

Page 68: Chapter 15 Summary Business and Information Systems Planning.

What Xerox Did RightWhat Xerox Did Right1. It made an appropriate diagnosis of how to cure the ills of

the company.

2. Quality was the right process for the right solution at the right time.

3. The necessary commitment was made by senior management.

4. A constituency was built starting at the top in a very calculated and deliberate way.

Page 69: Chapter 15 Summary Business and Information Systems Planning.

5. Information systems use was effectively aligned with its business objectives and processes to achieve them.

6. Executive compensation was tied to quality.

7. Innovations and successes of the TQM program were well publicized.

8. The pursuit of the Baldridge Award was an energizing effort within the company.

9. It achieved measured results.

Page 70: Chapter 15 Summary Business and Information Systems Planning.

Product and Operations Quality Results

Defects Per100 Machines

ProductionSuppliers

Production Line Defective Parts

Reduced Reduced Reduced

10X 10X 15X

Figure 16-2Source: Xerox Corp., Reprinted with permission

Page 71: Chapter 15 Summary Business and Information Systems Planning.

Xerox PerspectiveXerox Perspective

1. It took Xerox nine years to really buy into quality as a corporate way of life.

2. It took five years to complete the TQM training for all of its employees.

3. The salary of every employee is tied to quality improvements and profits.

4. It was concluded that all of this was worth doing.

Page 72: Chapter 15 Summary Business and Information Systems Planning.

BPR ConclusionsBPR Conclusions

1. A BPR project must start with senior management support and sponsorship on an on-going basis.

2. 2. Even with the necessary senior management involvement, a project will still be very challenging given the dramatic improvements and possible changes that it can entail.

3. 3. A talented and experienced project team and a professional approach with discipline and interpersonal skills will significantly raise the odds of realizing BPR success.

Page 73: Chapter 15 Summary Business and Information Systems Planning.

BPR ConclusionsBPR Conclusions

4. BPR, as a high risk project, represents possible high return as proven by the companies that have successfully done so.

5. Information technology is often the enabler of successful BPR and the catalyst for business success.

Page 74: Chapter 15 Summary Business and Information Systems Planning.

Ways to Improve ProcessesWays to Improve Processes

1. Traditional systems analysis – incremental improvement.

2. Business Process Reengineering – ambitious and dramatic change through a clean slate approach.

3. Total Quality Management – incremental change with a major emphasis on quality.

Page 75: Chapter 15 Summary Business and Information Systems Planning.

Some Valid BPR QuestionsSome Valid BPR Questions

What frequently triggers consideration of a business process reengineering effort by an organization? Is it likely that a company would decide to implement such an effort for the wrong reasons?

Are there fairly consistent objectives that a company would want to pursue that would justify turning to BPR as a logical approach?

What factors will dictate a high probability of success or a likelihood of failure?

Page 76: Chapter 15 Summary Business and Information Systems Planning.

Does the estimation that between fifty and seventy percent of BPR projects fail suggest that there is a fundamental flaw in the approach?

How significant a role would or should information systems play in the design of new business processes?

Does Total Quality Management compete with Business Process Reengineering or do the two complement each other?

Some Valid BPR QuestionsSome Valid BPR Questions


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