BPM for company analysis
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This report purpose is to justify and identify the problems that have been occurring on Chip’s Optisync and give the solutions to solve it based on BPM principles and understanding. The main problem that has been found is about the system that Chip’s Optisync uses, which is paper-work base working system. Based on the proposed solutions and also recommendation for Chip’s Optisync, the outcome that will be wanted is the flexibility of working process within the company that will affect good relationship within each division to reach higher customers’ satisfaction. Problem solving will be based on using ERP system, which is more computer based working system that will cover the complaining that comes from customers because delayed shipping time. By using the steps of ERP and considering the issues that will be occurring during the changing of system, Chip will be able to fix the problems within his company.
TABLE OF CONTENTS
TABLE OF CONTENTS3
1.0 BPM and Strategy
Business Process Management is a step that company takes to control the processes within the organization itself. BPM can drive the process that company takes into more effective and efficient to pursue particular goals that company wants to reach. BPM also can prevent the company to gain in cost while the company is trying to reach its goals (AIIM, 2013). Based on Andrew Spanyi, there are eight essentials principles in BPM. The eight principles can be seen from the figure 1.1 (Spanyi, 2003). Figure 1. Eight Essentials Principles in BPM by Andrew Spanyi. By following these 8 principles, Chip can have better understanding to link his business strategy to his business processes in order to improve his current performance in every business processes to engage more customers to buy his products (Spanyi, 2003).
BPM can give benefits to help Chip solve the problems that are related with the sales and business processes system. Firstly, they can use BPM to determine strategy based on internal and external perspectives, which is industry structure view and resource based view. Industry structure view, which is observing outward environment, Chip can use opportunities and also defending his company from the threats. Meanwhile, by familiarizing the resource-based view, which is observing inside the company, Chip will improve the strength of his company and solve the weaknesses within the company (Bengough, n.d.).
Secondly, BPM can also help Chip to define strategy based on how Chip is going to position his company and products through all the competitors. Chip will understand about Operational Excellence strategy, which is one of the three value positions by Treacy and Wiersema. This Operational Excellence is more about how to make the company runs efficiently in lower cost production for the customers (Harmon, 2007). Figure 2. Value chain of Chips’s Optisync
Thirdly, BPM can help chip to understand more about organization structure. By defining the structure clearly, the working process will be more effective and efficient (Bengough, n.d.). Finally, BPM can help Chips to clarify the value of his products to customers and improve it. By doing the value propositions to his products, Chip will have more clarity to determine the business strategy to stay in competitions (Harmon, 2007). Chip also can understand more about BPM by understanding about value chain. Value chain is the summary of all process that company does when they are producing products or services. The value chain can be applied in BPM by structuring the organizational chart with all the process that they are doing when producing the products and services to customers and also the sub processes within the process. By doing value chain, Chip will know which division that is not working well and improve the process effectively and efficiently (Harmon, 2007). The figure 1.2 is the value chain that Chip has now in his company.
2.0 Problem Analysis
The GAP model illustrates the differences between the current performance and the desired performance. In the given situation by applying the GAP model, it is identified that delay in the availability of information is the most urgent problem, which is causing the delay in the whole business process and which requires immediate attention (Bengough, n.d.). By applying this model to identify the problems in Chip’s Optisync Pty Ltd., the following performance and capability gaps can be deduced:
Figure 3. The Gap Model.
From the Gap model, the problems can be justified. The problems that have been identified are: Inventory mismanagement – It is identified that there is a lack of regular stock count. The concept of safety stock doesn’t seem to exist in the current business process. Decentralization of information- The flow of information in the current business process appears to be decentralized (dispersed). Delay in delivery process – The existing process also encompasses a delay in the delivery process to the consumer. Lack of proper information flow within the organization could be the main reason causing such delay. Lack of timely communication- Communication of information within the organization appears to be time consuming. Delayed customer service- The system of tracking the customer orders fails to exist in the current process.
No automation of data- The organisation is currently using the manual method of keeping records, while most of the business processes around the world have adopted the system of automation of records. Lack of tight integration of data amongst various departments- With different departments adopting different ways of performing their functions, there is a lack of integration of information as well as the whole process. Delay in decision making- The current business process is also facing the problem of delayed decision making among the staff. According to the analysis, delaying in data availability can slow consumer response. While the main cause for this problem can be identified as paper based system which is inefficient and ineffective, the other cause is improper communication amongst all the departments in Chip’s Optisync.
The cause and the consequences of the problem could be explained in a tabular form as follows: Causes
Manual record keeping
Delay in information flow and a broken business process.
Lack of communication among the staff
Delay in fulfilling customer orders
Additionally, the problems that have been occurred can be demonstrated by using As-is diagram. The As-is diagram will be shown on the next page and it shows the delay in the business process, its attribute mainly being delay in the information flow amongst the various levels of Chip’s Optisync. The current process depicts the lack of day-to-day management leading to slower business process. The lack of proper information flow is leading to unplanned and unscheduled inputs, thereby causing a delay in the output.
Figure 4. The As-Is Diagram
The other way to identify the problem is by using the The project scoping diagram shows the problems identified in the process. It deals with input, control, enabler and output problems (Bengough, n.d.).
Figure 5. The Project Scoping Diagram.
3.0 Proposed Solution
Business process Architecture can usually be described as how various organisations in a company function together to achieve the required target of the company. It provides a chain scenario starting from organisational, process, management aspects by providing a flexible platform for the IT and business management to work along to implement the required software for the business growth. This procedure includes information of the resources availability, manufacturing a product, and how to promote the product to reach the market effectively. The hierarchy specifies the internal, external and the work flow within an organisation and providing a clear insight of how the process are linked to strategic goals and the inter relation of organisational resources and process (Bengough, n.d.). BPA architecture provides Chip the overview of his company to fix the functionalities in an organised way.
It is helping the organisation to prioritise the requirements accordingly, and enhancing the IT and business relationships effectively for the implementation of a good software. The main problem of Chip’s Opti sync is paper-based work. Implementing the ERP system for the whole process can solve and it will become more efficient and effective. In result, the working information that is delivered by each sector gets stored in the database. These are the outcomes from implementing ERP: Improves the purchasing activity by streamline process defined as procurement. With the support of IT better production and sales services can be achieved. Helps the production department to record the stocks before hand after viewing the stock level in the database.
This would avoid the waiting period for the customer to get the required product. Resulting in diminishing the customer dissatisfaction level. With ERP manual recording of the data can be withdrawn, thus Chip’s Opti sync company would be able to response effectively to the complains of the customers .It also provides efficient feedback. But the main issue that has to be considered is that Chip has to provide training to his employees to get acquitted to the new working procedure with implementation of ERP. The To-Be process diagram below will show that ERP can make working process of each division simplified and more efficient. This will result in the elimination of customer dissatisfaction and improvement in every aspect of his business. Figure 6. To-Be process diagram.
ERP also has several software such as SAP, which is considered as the most effective feature used by many organisations as it improves all the aspects. Hence by using SAP in Chips Optisync the work process will become flexible and can result in the expansion of Chip’s business. Alternatively, by implementing CRM application in Chips OptiSync Company would help him to enhance a good relationship resulting in customer satisfaction. The other advice that would be given to Chip is to use SOA as it is less expensive and integrates the distribution process Online through which chip can expand his business horizon globally by online services which would help his organisation to respond to the customer quickly.
4.0 Solution Considerations
The solutions specified above has certain issues that are to be considered by Chip while designing the new process. Re-designing a process will require a huge budget, additional resources, and quality issues pertaining to risks. Chip’s Optisync company has too much of dependability within the organisation that has to be reduced. As Chip’s is a medium sized enterprise, costs and budgets needs to clearly organised for the new design.
The first issue is about cost. Training cost is considering the awareness of current employees on BPM and EPR strategies to be low, training should be given to make them familiar with the system and be quick enough to adapt to it. And as the computer literate staffs have minimal knowledge that is only basic and intermediate, they also need adequate training on higher level of computers. Meanwhile, infrastructure cost is considering Chip’s company has low-level design computers which fewer configurations, additional cost will be required in purchasing high-level and better configuration computers in order to implement ERP and SAP.
Finally, resource cost is considering that Chip has to recruit a team of new employees for working on the ERP process which will be an overhead to Chip, eventually adding up to recruitment, Resource and training costs. The second issue is risk that includes the financial risk and quality risk. Financial risks should be taken into consideration while introducing a new system. Chip has to get the confirmation from the finance department if there is sufficient money to implement the new system. Meanwhile, quality is about the current system, which is paper based, and Chip has to establish measures to check the effectiveness of the proposed solution.
The third issue will be Chip should also address the political conflicts that would rise amongst the different departments and balance them. The next issue is considering the fact that the system would be completely new to the employees, Chip has to ensure the old system is also running in order that the employees get acquainted to the new one. Finally, as Chip’s Optisync product is popular in the market because of its design and multiple features, Chip has to focus on a strong marketing strategy combined with the concepts of ERP and SAP systems, which would increase the company’s profits. By considering the issues that have been explained and concerns, Chip has to select the solution that best fits his company and employees. 5.0 Recommendations
From the analysing that has been done earlier on this report, there are three recommendations that suit for Chip, which are: Using BPA to clarify the structure functionally within each division to organise the working process to become more efficient and effective. Familiarize the employees the used of ERP database system, such as SAP, to perform the working process faster. Creating good relationship of the employee within each division application to increase the performance. These three recommendations will help Chip and his company to increase the working performance to reach more customers in the future.
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