PROCESS INNOVATION

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PROCESS INNOVATION

• MN4118 Session 11
• Prof. Mark Nissen

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Agenda

• Definitions Overview
• Examples Approaches
• Exercises
• Military Applications
• Summary

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Innovation

• innovate verb
• To begin or introduce (something new) for or as
  if for the first time.
• invent verb, transitive
• To produce or contrive (something previously
  unknown) by the use of ingenuity or imagination.
• (The American Heritage Dictionary)
• Innovation effort to create purposeful, focused
  change in enterprises economic or social
  potential (Drucker)

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Reengineering Defined

• Reengineering lt--gt innovation
• BPR (Hammer Champy)
• the fundamental rethinking and radical redesign
  of business processes to achieve dramatic
  improvements in critical, contemporary measures
  of performance
• Innovation (Davenport)
• revolutionary, process approach to effect
  quantum, multiplicative improvements in business
  performance
• FAQ 1 - key terms concepts?

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Reengineering Overview

• Powerful approach to process innovation
  re-invention
• Focus on enterprise process
• Dramatic performance improvement
• Responsible for much economic growth
• Raises competitive bar
• Business processes of military?

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Reengineering Overview

• You are likely to experience BPR
• 30B including expenses systems
• BPR vs. TQM/TQL (FAQ 2)?
• 50-75 failure rate
• High risk, high return venture
• Other high risk/return ventures?

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Why Innovate?

• FAQ 3 - why innovate?
• Examples? Military application?
• Competitive advantage
• Environmental change
• Technological change
• Outdated policies assumptions
• New management knowledge
• Others

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What Innovation Steps?

• FAQ 4 - what steps?
• Myriad diverse methods
• Davenport framework
• ID processes for innovation
• ID change levers
• Develop new process visions
• Understand improve existing processes
• Design prototype new processes
• Excellent thesis organization!

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BPR Organization Roles

• Organization
• Cross-functional teams
• Spans org hierarchy
• Can include customers suppliers
• Roles (not mutually exclusive)
• Enterprise Leader
• BPR Steering Committee
• Process Owner
• Reengineering Czar
• Reengineering Team

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IT Role?

• FAQ 5 - IT role?
• IT enablers?
• Non-IT enablers?
• Paving cowpaths?

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Product Design Example

• One-legged chair
• The 4
• Functions?
• MOEs?
• Redesigns?

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Reengineering Examples

• Commercial
• IBM Credit (2 weeks --gt 4 hours)
• Ford A/P (500 people --gt 125 --gt 5?)
• Federal Mogul (20 weeks --gt 20 days)
• Northrop S/W procurement (10 weeks --gt 8 days)
• Government
• IRS (collections 33, staff - 50)
• DoD spectrum assignment (6 mo --gt 3 wk)
• SPEDI, AF ADPE procurement
• Many others

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Reengineering CSFs

• Critical Success Factors (CSFs)
• Preconditions for success
• Top management commitment
• Realistic expectations (cost, time, results)
• Right people working full-time
• Empowered, collaborative BPR team
• Shared vision
• Sound management processes
• Others
• Innovation expertise!

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Process Redesign

• Central analytical process in BPR
• Parallels IS analysis design
• Redesign model of process
• Seek dramatic performance improvement
• Analytical activity (LDW, sim, projects)
• Two major approaches
• Greenfield (aka blank sheet of paper)
• Baseline transformation (as-is --gt to-be)
• Advantages disadvantages?

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Greenfield To Be Scenario
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Redesign Exercises

• Corporate travel process
• Personal grocery shopping process

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Military Applications

• Manpower processes
• Requirements?
• Community management?
• Recruiting training?
• Distribution assignment?
• Warfighting process?
• Other processes?

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Summary

• BPR is about fundamental change
• High risk, high return endeavor
• Dramatic performance improvement
• Fall behind by staying still - military too
• Redesign is central analytical activity
• Redesign model of process
• Apply to manpower processes
• You are likely to experience BPR
• Learn systematic method (KOPeR)