CH5. Organizational Reengineering and Enterprise Planning

Definitions

• ISP: initial systems plan
• reengineering: revaluation and redesign of business processes, to include only the necessary products and processes.
• Enterprise planning techniques: stakeholder analysis, critical success factors, and information systems planning (ISP).
• IT: information technology: any technologies that support storage, retrieval, management, or processing of data
• level of effort approach, put strict deadlines, the team works at a capacity up to the deadline and what does not get done is not done.
• JRP: Join Requirements Planning.
• champion is a person with commitment, enthusiasm, authority and influence to cheerlead the project.
• ISA: Information Systems Architecture Framework

Conceptual foundations of enterprise reengineering

• organizational reengineering: evaluation and redesign of the business processes, data and technology to improve quality, service, speed, use of capital and reduce costs.
• the main resources for organizations are people and data (both are raw).
• reengineering decision comes from management.
• it is a good management practice to assure that organizations are efficient and effective, only things that are needed should stay operational. non-essential things should be removed or allocated to other goal.

case worker approach

• caseworker approach is preferred over assembly line approach, because caseworker approach has increased control, decision making, authority, and discretion.
• in caseworker approach, employees know the entire process start to end, and they can work independently.
• can collaborate easily with other departments (since they will usually work on the same approach).
• caseworker approach, should improve customer relations and satisfaction (same person will handle the entire process).
• companies are moving away from assembly line approach, where a single person is responsible for a single task, and the task is repeated over and over again. then the customer journey continues with other person who continues the process. while in caseworker approach, the same person will handle the entire process.
• according to 80/20 rule, 80% of transactions are normal, 20% exceptional, we should devote less effort to the 80% and more effort to the 20%.
• power of caseworker comes from:
  • job redesign
  • removal of errors from the process
  • use of all available information and technology

Organization architectures

• To manage and plan the organization structure, data, technology, the organization plans (architectures) can be devised.
• Enterprise = the entire organization.
• enterprise architecture: abstract summary of organizational component’s design.
• organization strategy: the organization’s long-term goals and objectives.
• organization process architecture: the major functions in the organization, activities that define these functions, and the processes that support these activities.
• data architecture: defines the stable entities that are critical to the organization.
• network architecture: identifies all locations of work and their communication requirements.
• technology architecture: contains information about platforms (mainframes, LANs, PCs), special purpose technologies (eg, email), and the location for each of them.
• mapping network architecture to technology architecture, the organizational level technology changes can be identified.
• the organization must be proactive rather than reactive about all aspects of its operation.

Planning reengineering projects

• end goal: redesign of organization, jobs, processes, data, and technology.
• time: finish reengineering quickly, in less than 4 months.
• type of staff: 1 of 4 seniors in the organization should be assigned on a full-time basis to the reengineering project.
• number of staff: 1 person for every 10-15 departments (or 1 person for every 100 employees)
• 3 scenarios of user-manager participation in planning:
  1. users and analysts go off-site for 4-8 days, to hold JRP (join requirements planning) sessions.
  2. constant-part time participation of users and analysts in the planning process. sessions are held ofr 1-3 hours a day.
  3. full-time commitment for the duration of the project.

Reengineering methodology

• 
• steps:
  1. Identify project sponsor: a senior level manager who will pay and champion the project.
  2. initiate the project: the project is announced to the organization.
  3. Assign staff.
  4. Scope the project: determine data self sufficiency, wether the reengineering scope will allow to do useful changes (aka. all dependency departments are included in the reengineering project).
  5. create a schedule: no more than 4 months.
  6. Identify mission statement: analyze CSFs (critical success factors) and ways to measure them, then link them to the mission statement and organization goals.
  7. Gather information: mostly through interviews with users and managers.
  8. Summary of the architectures: develop data, process, network, and technology architectures.
  9. Develop data architecture.
  10. Develop process architecture.
  11. Develop network/technology architecture.
  12. Develop analysis
  13. Develop implementation plan.
  14. Develop IT implementation plan.

Assign staff

• 3-4 managers should be assigned: user area, senior manager, middle manager(s) for up to 4 months.
• each must have at least 1 full-time month, the rest can be part-time.
• 2- 3 senior IS manager, SEs, data administrators, consultants should be assigned full-time for the entire project.

Scope the project

• key criteria for scoping the project: data self-sufficiency qnd user commitment.
• Data self-sufficiency: at least 70% of data used in the organization must be originated in the organization itself. can be analyzed by:
  • creating ERD diagram (entity relationship diagram) for the organization.
  • creating process hierarchy diagram.
  • creating entity-process diagram.
  • formula: I / ( I + O) = %DS
    • I: internal data (generated by the department in question)
    • O: external data (generated by other departments or external organizations, can not be changed or fixed)
    • DS: data self-sufficiency
• goal of scoping: identify group of departments that create their own information and not depend on other departments for data to do their work.
• usr commitment people in the reengineering project must be committed to change the organization.

Identify mission statement

• missions statement: short paragraph that describes the purpose of the organization.
• if the organization has no mission statement, or quantified goals and objects, create one for the reengineering project and not for the organization.
• goals should be 3-5 years in the future, and should be measurable. eg. increase customer satisfaction by 20% in 3 years.
• critical success factor (CSF): defines some essential process, data, event or action that must be present for the outcome to be realized.
• analysis of CSFs must be done at this stage, and deciding what information is needed to measure the CSFs should be specified here.

Summary of the architectures

• following and expanding Zachman’s Information System Architecture (ISA) Framework.
• Conceptional level of architectures:
  • ISA describes different architectures from business to application contexts.
  • only the first 2 architectures are needed for reengineering: scoping and enterprise.
  • 
  • scoping architecture: defines what’s included in the reengineering project and what’s not (according to the sponsor’s plans). we call each targeted (scoped) department an item.
  • enterprise architecture: after speaking to the users in targeted (scoped) departments, team builds logical description of what things are got done in this department (not how they are done).
  • 

• Domains of architectures:

  • the conceptual domains apply for 4 organizational architectures: data, process, network, and technology.
  • domain: area of interest, eg. data, process, network, technology.
  • data domain: defines the entities of interest to the organization and the relationships between them.
  • process domain: defines the activities, processes and functions in the organization without any identification of how they are accomplished.
  • network domain: describes the organization from a geographical perspective.
  • technology domain: describes the organization from a technological perspective.

• Scoping architecture

  • missions statement, can be mapped into the 4 architectures to initiate the reengineering project.
  • at this stage, we should know the major entities in the organization and its process, functions, and activities.
• Enterprise architecture
  • includes the 4 domains of the enterprise architecture.
  • process architecture: defines functions have activities that have processes. function (general) -> activity (arrangements for completing a task) -> process (details of activity).
  • data architecture: creates ERD diagram.
  • network architecture: creates process hierarchy diagram.
  • technology architecture: creates network diagram of existing technologies

Architecture analysis and redesign

• affinity analysis:
  • clusters processes by their closeness of their functions on entities they share.
  • uses tools such as ADW (affinity diagramming worksheet) TM.
  • create a matrix that maps processes hierarchy diagram to ERD.
  • creates CRUD matrix oor affinity matrix.
  • matrix of 20*20 (400 cells) will generate 5-7 clusters.
  • example affinity matrix shown below
  • 

Implementation plan

• steps:
  1. Develop job descriptions.
  2. define the organization
  3. plan information technology
  4. plan training
  5. plan implementation
• Develop job descriptions:
  • define the new jobs that the organization may need with the new structure.
  • constraints on job identification are data self-sufficiency, process self-sufficiency, and minimal coupling to other jobs and processes.
• Define the organization:
  • 3 layers: CEO, functional managers, everyone else.
  • steps:
    1. map jobs to functions.
    2. place jobs into clusters by analyzing relationships between jobs.
    3. determine the location of work
  • 3 types of inter-dependencies in an organization:
    1. pooled: relatively independent, low interactions between jobs or departments. eg. accounting, HR.
    2. sequential: serial relationship between jobs, one job must be completed before the next one can start. eg. sales, marketing.
    3. reciprocal: highly dependent, jobs or departments need to work jointly with constant feedback and communication. eg. R&D, manufacturing.
• Plan information technology:
  • CREATE 3 matrices: technology/process, process/entity, and an entity/technology matrix.
  • steps:
    1. Compile all subject area database and application changes, redevelopment, enhancement requirements.
    2. Compile all technology and network infrastructure requirements.
    3. Map technology and network needs to database and application needs.
    4. Define software reengineering projects.
    5. Define new application development projects.
    6. Determine priorities for all projects.
    7. Develop a plan for two years of development and reengineering work. Develop a tentative 3-5 year plan for the remaining projects.