week 2: enterprise systems & business process … · 2018. 2. 23. · week 2: enterprise...
TRANSCRIPT
WEEK2:ENTERPRISESYSTEMS&BUSINESSPROCESSREENGINEERING
BUSINESSPROCESSES:
Missionstatement:expressionoftheorganisation’svision,businessdomain,competenciesandvalues
Strategy:choiceaboutasourceofaction,meansofputtingamisnstatementintoplace
Threelevelsofstrategies:
1. Internal:decisionsthataremadewithinanorganisation2. Competitive:understandingtheindustrythecompanyoperatesin3. Businessportfolio:whichindustrythecompanyshouldcompetewithinandhowtocompete
withnewindustries
Strategy(Cont.):
• Determineshowanorganisationdealswithitscompetitorandwhatproductstoselltowhatmarketsandthroughwhatdeliverymethods
1. Costleadership:Carriesoutactivitiescheaperthanotherfirmse.g.economiesofscale,technology,lowoverheadcosts
2.Differentiationstrategy:businessesaddingextraforcustomers–canchargehigherprice/ offeringuniqueproductsandservicestargetedtoacustomer’sneeds
Implementationandattainmentofthesealternativestrategiesconsistsof5steps[Porter’s]
1. Operationaleffectiveness:beingabletodothingsbetterthancompetitor2. Uniqueness:activitiesdifferenttorestofthemarkets3. Trade-offs:makeconsciouschoicesaboutmarketitwishestoserve,theproductorserviceitwishes
toprovide&meansofdelivery4. Fit:howdifferentactivitiesinanorganisationcombinetoachieveacommonobjective5. Sustainability:moreactivities=harderforcompetitors
5Forcesthatshapeindustry[Porter’s]
1. Rivalryamongexistingcompetitors2. Threatofsubstituteproductsorservices3. Bargainingpowerofsupplies4. Bargainingpowerofbuyers5. Threatsofnewentrants
Reasonsforbusinessprocess(re)design:
• ManagementChange:Functionallybasedstructuremustbechanged.Drivecomesfromthetop• PeopleChange:Narrowlydefinedspecialistjobsmaybecomegeneralistanddiverse.
Note:Businessprocessesarenotstatic.Newtechnology,fiercecompetition,changetobusinessenvironment
2MajorApproachesofbusinessprocess(re)design:
1. TotalQualityManagement(TQM)2. BusinessProcessRe-Engineering(BPR)
TotalQualityManagement:seriesofsmallprogressivestepsisthebestwaytoimproveoperations
1. Quality:costofpoorqualityaregreaterthanthecostsassociatedwithdevelopingandrefiningbusinessprocesstogeneratehigh-qualityoutput
2. People:howpeoplewithinorganisationarevaluedfortheircontributiontowardstheprocessandtheirideaonhowtheprocesscanbeimproved
3. Organisation:ensuredepartmentsdonotoperateseparatelyàneedtointeract4. Management:Managementmustfocusonprocessesratherthanindividualfunctions.Mustcome
fromthetop
BusinessProcessRe-Engineering(BPR)
• Radicalchangestoachievedramaticimprovementso e.g.cost,quality,service&speed
• Thiscanberiskythoughàifgoeswrong,andestroywhatyoualreadyhave• Keycomponents:
o Fundamental:forcesanorganisationtoquestionwhatactivitiesitperformsaspartofitscurrentprocess
o Radical:compelsorganisationstostartagaino Dramatic:expectedreturnontheimprovementso Process:aspectiscentraltoBPR
• Principlesinpractice:o Combinesjobsandletworkersmakedecisionso Createsasinglereferencepointforcustomerso Performstepsinanaturalorderandattheirlogicallocationo Allowprocessestovaryo Reducetheimpedimentofcontrolsandreconciliations
• PrinciplesandapproachesforaBPRteam:o Establishasenseofurgency–convinceeveryonetochangeo Formaleadershipteam–whoshouldbetheteammembers?o Createandcommunicateavisiono Empowerotherstomeetthevision–employeere-training?o Planforandcreateshortteamwins–positivefeedbacko Consolidateimprovementsandencouragefurtherchange–notjustchangetheprocesses,
changingthecompanyo Institutionalisethenewapproaches–newwaybecomestheusualway
• Technology-drivenprocessimprovements:o Technologyenablerofbusinessprocesses–hastobedonecorrectly(e.g.barscanner)
• OutcomesfromBPRo Functionaltoprocesso Jobchange,peopleempoweredtofitproblemso Highrisk,lotsofchangeo Dictatedfromthetop
• Examples:o Barcode,vendormanagedinventory(outsourcesinventory),electronicbillpayment,BPAY
• Technology:o Fourofbenefits
1. Information-based2. Strategy-based3. Transaction-based4. Change-based
EnterpriseInformationSystems(EIS)
• Softwareapplications–usedbybusinessestocapturetransactionsandproduceoutputsforplanning,decisionmakingandstatutoryreporting
• ThreecategoriesofEIS1. Single-entrysystems2. Inwardlyorganisedsystems3. Outwardlyorganisedsystems–suggestwaystoimprovesourcingorrawmaterialsor
increasingrevenue/increasecustomerexperience• Threetypicalprocesses:
o Sales(=‘Revenue’or‘Fulfilment’)o Purchasing(=‘Expenditure’or‘Procurement’)o Production(=’Manufacture’)
• ThreeCategoriesofEIS:o Single-entrysystems
§ Recordtransactionandobligations§ Designedforindividualusers§ Requireslittleaccountingknowledge,easytouse,performfinancialMGMT,
investmentprocessandtrackinvestmentperformanceo Inwardlyorganisedsystems
§ Recordandmonitorbusinessandmanufacturingprocesseswithinorganisations§ Captureallinternalactivitiesofanorganisation
o Outwardlyorganisedsystems§ Supposedorganisation’sinternalactivities§ Extendthecaptureofdatatosuppliers
• Choosingasoftware
o Definethebusinessprocesso Lookatbusinessrequirementso Determinewhatthesystemneedso Lookatcategoryofsoftwareneededbytheorganisationo Determinethevendorthatwillprovidethesoftware
• Single-entrySystemso Softwareonlyrecordstransactionsandobligationso Forindividualuserorsmallbusinesseso Recordcashtransactionsthroughalinktotheorganisationsbanko Requireslittleaccountingknowledge+easytouseo Lakofclassificationinthesystemo Doesn’tlookatnon-financialinformation
• BookkeepingSystemso Makeuseofaccrualaccountingconceptso Usedbysmallbusinesso Cangeneratenon-financialinfoo Easytouse,canbeusedonafewnetworkso Allpre-programmedreports,ledgersandchartsofaccountso E.g.MYOB
• HybridSystemso Integratesoperationsandfinancialfunctionso Looksatmanufacturing,inventory,warehouseandcustomerinformationsystemso Helpswithdecisionstodowithoperationsandfinancebutrequireslotsofeffortto
integrates
EnterpriseResourcePlanning(ERP)Systems
• Softwaredesignedtocaptureawiderangeofinfoaboutallkeybusinesseventsincludingaccounting,finance,HR,sales,markingandmanufacturing
• Eachvendorhastheirownbusinessprocessesandorganisationtendstoadopttheseoutforconvenience
• Allactivitieshavedataonwho,what,whereandwhen• ERPsystemsfacilitatetheflowofinformationbetweenallbusinessfunctions(i.e.departments)inside
theboundariesoftheorganisationàERPisaninwardlyorganisedsystem• ERPsupport:revenuesalesorordercash
o Paymentpurchasesorpurchasestopayo Productionmanufacturingorconversiono Humanresourcesandpayrollo Generalledgerandfinancialreporting
• Theyareinwardlyorganisedsystem:facilitatetheflowofinformationbetweenallbusinessfunctions• Businessdata:containsfinancialandnon-financialreferenceinformationthatrecordsandtracksthe
statusofbusinessactivitiespriortocompletion• MasterData:containscompletedtransactionalinfosuchassalestransactions• Benefits:easierglobalintegrations,reducesmoneybarriers
o Don’thavetoupdateeachcomputerseparatelyo Eitherquantifiablebenefitsandintangiblebenefitso Reducescostofinventory,materialsandlabouro Improvescustomerserviceandsaleso Increasedreturnoninvestmento Nolongerhaveduplicatedfiles
• Canbeidentifiedintotwotypesofbenefitso Quantifiablebenefitso Intangiblebenefits
• Single-sourcedERP:allsystemormodulecontainedwithinthesystemareprovidedbyasinglesoftware
• Best-of-bred:allowsorganisationstochoosemultipleERPvendorswiththebestfunctionality
Single-Source Best-of-Breed
Functionality Fitbestinorganisationthatspanabroadrangeoffunctionswherehorizontalstructuresarerequired
Fitbestinorganisationsthatarehighlyverticallyintegratedandrequirespecialfeaturesspecialfeaturesfortheiroperationsandbusinessprocesses.
Supply&Support Easyupgrades,supplyandsupportbyoneERPvendor
UpgradesareunsynchronisedandorganisationsneedtorundifferentversionsofERPmodules
LookandFeel Astandardisedpresentation Adifferentlookandfeelforeachofthemodules
UserTraining Trainedingroupsforthecompletesuiteofsoftware
Usersnormallyspecialiseintheirownapplicationswithseparatetrainings
CodeTable Shareddatabaseacrosstheorganisation.Onelocationofdata.
Multipledatatables,multipledataformats.
• ModulesinERPo Salesanddistributiono MaterialsManagemento FinancialAccountingo Controllingandprofitabilityanalysiso Humanresources
MichaelPorter’sValueChain:
• Inboundlogistics–receiving,storinganddisseminatinginputstotheproducts• Operations–transforminginputsintofinalproduct• Outboundlogistics–collecting,storingandphysicallydistributingtheproducttobuyers• Marketingandsales–inducingthebuyerstopurchasetheproductandprovidingameansforthem
todoso• Service–assistingcustomer’suseoftheproductandthusmaintainingandenhancingtheproduct’s
value
WEEK3:SYSTEMSDOCUMENTATION
SYSTEMDOCUMENTATION:
• awayofvisuallydepictingtheoperationsofasystem• amap–howthingsmovearoundandwhattheyare• roadmapstounderstandbusinessandnavigateprocesses• Addressesoneormoreofthefollowing:
o Whoisinvolvedo Whatactivitiesoccuro Wheredotheactivitiesoccuro Wheredotheactivitiesfitwithintherestoftheorganisation
Whydoweneedthem?
• Can’trelyonverbaldescription,weneedtodocumentit• Needtoensurethateveryoneunderstandstheprocess,mayhaveseveraldifferentdescriptions
o E.g.textualandgraphical• Organisationshaveoverlappingdepartmentsthattransferinformation• Servesasorganisationmemory• Visualisesbusinessprocessandhowdatamoveswithinanorganisation
Whydoaccountantsneedit?
• Interestedinoperationsofbusinessprocesses,internalcontrolsanddataflowswithorganisations• Cannavigatedifferentprocess
MajortypesofSystemdocumentation:
• Nomethodwillprovideeverything
ProcessMaps:
• Asimplegraphicalrepresentationofabusinessprocess• Solidlinesarefunctionalareas• Sub-functionsseparatedwithdashedlines• Lineswitharrowsaredocuments• Rectangle=process(notdocuments),diamond=decision• Readlefttoright,toptobottom
SystemFlowchart:
• Illustratedinputs,processesandoutputsinmoredetailthanDFDorprocessmaps• Hasinformationaboutdocumentsandprocessesperformedwiththesystemaswellasthoseinvolved
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DataFlowDiagram(DFD)
• Graphicalrepresentationofthedataflowthatoccurwithinasystem.• Threetypes
o Contextdiagrams§ Outlinesgeneralscenario§ Providesarepresentationofthesystemandtheentitiesthatprovideinputsto,or
receiveoutputsfromthesystemofinterest§ Onlyhasonebubble§ Mustbeatleastoneexternalentity§ Canhavemultipleflowsfromentity§ Saysnothingaboutwhatishappening§ Showshowmanyexternal/internalentities§ Rectangles=externalentities
•
o PhysicalDFD§ Outlineswho,whereandhow§ Number=structurednarrative§ Doublelines=representswherethedataisstored§ Havesamenumberofrectanglesasitscorrespondingcontextdiagram§ Bubblesnamescanbeaperson,departmentorthing§ Depictsthenormalprocess§ Inotherwords,errorroutinesareNOTdepictedinphysicalDFD
o o LogicalDFD
§ Outlineswhatishappening§ Showswhatproceduresarehappeninginthesystem§ Notallnumberspresent§ Canshowmanydifferentlevels
§ CircledepictsprocessNOTentity(e.g.entersales,createbatchtotal)
• Itcanbeexplodedintomanylevelsdependinguponthecomplexityofthesystemofinterest• Errorroutinesareonlydepictedonlowerleveldiagrams(i.e.belowlevel0)
o Level0logicalDFD–highestlevelofdepictionofthemajorgroupofactivitiesinthesystemofinterest
o Level1logicalDFD–takesoneoftheprocessbubblesfromlevel0andexpandsittoprovidedetailabouttheactivities
Entities:anyperson(who)orthing(what)involvedintheactivitiesofabusinessprocess
• DFDsidentifytwotypesofentities:
o Anexternalentityisanyentitythatprovidesinputsintoaprocessorreceivesoutputsfromaprocess.
• Contextdiagrams,physicalDFDandlogicalDFDusesrectanglestorepresentexternalentities
o Aninternalentityisanentitythatprocessesortransformsthedatawithinthebusinessprocessofinterest.
• ContextdiagramsandlogicalDFDdonotshowinternalentities
• PhysicalDFDusecirclestorepresentinternalentities
• Notethat,anexternalentityisnotnecessarilyexternaltoanorganization
Structurednarration:writtendescriptionofhowaprocessoperates
WEEK4:DATAFLOWDIAGRAMS:
BALANCING:
• Diagrams(context,physicaldataandlogicaldataflow)withthesameexternalentitiesandflowstoandfromtheseexternalentitiesarecalledbalanceDFD)
• Canhavedifferentnumberorbubbles,theflowneedtobalance• Theyarebalancedwhere
o TwoDFDshaveequivalentexternaldataflowso Todrawthemcorrectly,thefollowingpairsshouldbebalanced
• Contextandphysical• Physicalandlogicallevel0• Contextandlogicallevel0
• DevelopingaCONTEXTDiagram:(Narrationisgiven)1. Identifythesystemofinterest
• Drawabubbleandlabelittorepresentthesystemofinterest2. Identifytheexternalentities
• Drawandlabelarectangleforeachexternalentity3. Identifyanydataflowsbetweentheexternalentitiesandsystemofinterest4. Drawinthedataflowsconnectingtheexternalentitiesandsystemofinterestand
labelthemaccordingly• Rectanglesaroundentities• Circlearoundactivities• Doublelinesarounddatastores
o Checklist§ Only1bubble§ Nodatastore§ Bubblenameistodescribeprocess§ Alldataflowshavelogicalnames
• DevelopingaPHYSICALDFD1. Identifytheexternalentities
• Drawandlabelarectangleforeachexternalentity2. Identifytheinternalentities
• Drawandlabelarectangleforeachexternalentity3. Drawinabubbleforeachinternalentityandlabelaccordingly4. Identifyanydataflowsbetweenexternalandinternalentities
• Drawintheseflowsandlabelthedataflowarrows5. Identifythedataflowsbetweentheinternalentities
• Drawinthedataflowsbetweeninternalentitiesandlabelthearrowswiththephysicaldocument/informationthatisbeingsentorreceived
o 6.Identifyanydatastoresthatareaccessedtogetdataortostoredataaspartoftheprocess.Thesemaybepaperbasedorelectronic
• Drawthesedatastoresinandlinkthemtotheentitythataccessesthembyincludingdataflowarrows