Magnitude of Change

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Magnitude of Change

• Yet another independent variable?

2
Yet another independent variable?

• In describing the SD landscape, we have relied to
  date on five distinct independent variables
• (1) Clarity of the goal, Wysocki
• (2) Clarity of the solution, Wysocki
• (3) Criticality (what will be lost if we fail?),
  Cockburn
• (4) Size (number of people involved), Cockburn,
  Berg
• (5) Urgency (you need it when?), Berg
• We say these dimensions are independent variables
  in the sense that they point towards the type of
  SD methodology that is most appropriate.
• In this sense, methodology type is the dependent
  variable.
• Magnitude of Change (the degree of changed
  involved in implementing the new system), is
  perhaps yet another independent variable
• What follows is based on the work of Alan Dennis.

3
Business Analysis Process

• Understand the As-Is business process
• Identify opportunities for improvement
• Define the To-Be business process

If the magnitude of change is small (the to-be is
not much different than the as-is), then more
time is spent on step 1 and less on steps 2 and
3. If the magnitude of change is large (the to-be
is radically different from the as-is), then more
time is spent on step 3 than on step 1.
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Three Magnitudes of Change

• Business Process Automation BPA
• Very little change to the business process
  typical of automating a paper-based system
• The bulk of the BPA projects were done by IBM in
  the 1950s
• These days these are used to teach undergraduates
  the SDLC
• Business Process Improvement BPI
• Incremental change to the business process take
  the time to streamline things a little bit at a
  time making sure youre not disrupting things
  beyond control
• Tom Davenport
• Business Process Reengineering BPR
• Throw the old one away! Start from scratch.
• Michael Hammer

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BPA

• Focus is on taking advantage of computer
  technologies to gain efficiencies, while leaving
  unchanged the basic manner in which the
  organization operates
• Projects in this category perform all three steps
  in the business analysis process, with an
  emphasis on step 1, understanding the as-is
  system, so as not to disrupt the business process
• Common tools
• Problem Analysis
• Root Cause Analysis

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BPA

• Problem Analysis
• Ask users to tell you what the problems are and
  to make recommendations
• For example, provide more space for such and
  such field, or generate a new type of report,
  or put this and that on the same screen so we
  can see it
• Increased efficiency and ease of use

• Root Cause Analysis
• Focus on problems, not solutions list them then
  rank them
• Starting at the top, with the most important
  problem on the list, generate possible
  root-causes to this problem
• Investigate each possible root-cause starting by
  the most likely one or by the easiest one to
  check, until the true root cause is identified
• A decision tree or a fish-bone is often used to
  map the analysis
• Challenge the obvious

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BPI

• Target moderate changes to the organizations
  operations to take advantage of new opportunities
  offered by technology and/or to copy what
  competitors are doing
• Can improve efficiency (doing things right) and
  effectiveness (doing the right things)
• Spend some time on business analysis step 1
  (understanding the as-is), but not as much as you
  would if this were a BPA project . . . not
  looking to faithfully replicate the as-is, merely
  to improve it
• Common Tools
• Duration Analysis
• Activity-Based Costing
• Informal Benchmarking

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BPI Duration Analysis

• Detailed examination of the time it takes to
  perform each process and its sub-processes.
• First, compute the time it takes to do a basic
  process
• Second, compute the time it takes to do each of
  the sub-processes that make up the basic process
  under review
• Third, compare the sum of sub-processes times to
  that of the basic process.
• If the sum is less, then there are inefficiencies
• If the difference is significant, its time for
  an overhaul of the basic process
• The problem is coordination
• Process integration get less people involved
• Increased efficiency and effectiveness
• Process parallelization dont make people
  dependent on each other
• Increased efficiency

9
BPI

• Activity-Based Costing
• Similar to Duration Analysis, but focused on
  costs rather than time
• Identify the most costly processes and find ways
  to reduce these costs

• Informal Benchmarking
• Study the competition, especially the industry
  leaders
• Visit them informally as if you were a customer
• Good for customer-facing processes

10
BPR

• Obliterating the current way of doing business
  and making major changes to take advantage of new
  ideas and new technologies
• Spend very little time on business analysis step
  1 (understanding the as-is) . . . goal is to
  focus on new ideas and new ways of doing
  business
• Common Tools
• Outcome Analysis
• Technology Analysis
• Activity Elimination

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BPR

• Outcome Analysis
• Focus on the fundamental outcomes that provide
  value to the customer
• Look at the big picture
• See the business process from the customers
  perspective

• Technology Analysis
• Focus on the way in which technology is changing
  the way we do business
• List potential technologies
• List ways to use each technology listed

• Activity Elimination
• Question everything, every single activity in a
  given business process gets reviewed
• Focus on one activity at a time and ask for ways
  of doing away with it entirely

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Project Characteristics
BPA
BPI
BPR
Potential business value
low-moderate
moderate
high
Cost
low-moderate
high
low
Breadth of analysis
narrow
narrow-moderate
very broad
low
low-moderate
very high
Risk