In my April column I discussed the Competitive Armageddon being created by the Internet. Now customers can visit an organization anywhere in the world with the click of a mouse. But they will leave it to go to its competitors just as fast also with the click of a mouse if they cannot locate the products they need or receive the customer service they require. Organizations will find that many business processes and systems that have evolved over the years to serve their customers and suppliers will not be able to respond in time in this new instant access environment. They will have to be redesigned and redeveloped.
This month I want to discuss how you can reengineer these business processes to take advantage of the competitive opportunities presented by the Internet.
Most business processes were designed using process engineering principles defined many years ago, documented in a landmark book. What was its title? When was it published? Who was the author? No, it was not Michael Hammer or James Champy. It was not Ed Yourdon or Tom de Marco or Ken Orr. And it was not Peter Drucker.
The bible on which many of today's processes are based is The Wealth of Nations, written by Adam Smith and published in 1776. In today's terminology, he showed how complex processes can be broken down into simple steps to be carried out by technology illiterate workers in his day then combined again into complex processes.
Most industrial age processes were designed this way. Processes using physical items worked well but were refined further by Henry Ford through assembly line techniques. But information about each process step had to be recorded and so was documented at each step. This led to redundant data being recorded about customers, products, etc., at many steps of a process. These redundant data versions had to be kept up to date. The result data changes were communicated throughout the enterprise so all redundant data versions could be kept current. Data flowed throughout the enterprise. Using manual processes, many businesses operated in a state of chaos. The processes evolved in the 20th century but did not fundamentally change.
As we automated these business processes during the last 40 years, we implemented each process progressively with its redundant data and the data changes (now as data flows) needed to keep redundant data current. We documented the data flows in data flow diagrams (DFDs). What was the result? We transformed manual chaos into automated chaos! We did not first reengineer the processes that produced this chaos.
With the Internet, we cannot hide the internal chaos in most enterprises any longer. For the impact of this chaos will be on the front doorstep for the world to see not by what can be done, but by what an organization cannot achieve to respond competitively. We can no longer avoid the need to reengineer these processes.
The Internet, intranets and extranets between customers, suppliers and business partners open up new opportunities to reengineer this chaos. Three white papers may assist you in carrying out this business process reengineering. They can be read on-line or downloaded, printed and distributed freely throughout your organization to people you know who should hear the message.
Data Administration and the Internet: A Critical Contribution for the Future. This paper describes the role of the data administrator in developing integrated databases that eliminate redundant data versions and the related redundant processes needed to maintain that data. This identifies cross-functional processes that lead to new Internet-based business reengineering opportunities. This paper should be read in conjunction with the following business reengineering papers.
Business Reengineering and the Internet: Transforming Business for a Connected World. This paper discusses business reengineering so that business processes and business information are both directly aligned with, and support, strategic plans. It describes the impact of the Internet, and discusses how cross-functional processes can be reengineered to take maximum advantage of new competitive opportunities.
The Role of XML in Business Reengineering. This is an extension of the business reengineering paper above, which shows how extensible markup language (XML) can be used to achieve integration across multiple, incompatible supplier systems for cross-functional purchasing systems.
Each of these papers (and many others) can be read on-line or downloaded from the IES Web site by clicking on the papers link at http://www.ies.aust.com/~ieinfo/.
Next month we will look at the extensible markup language (XML). We will see how XML will transform knowledge management on the Internet. We will also see how it will change systems development and legacy systems integration.
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