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ch05-1 - Chapter 5 Information Technology and Changing...

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Chapter 5 Information Technology and Changing Business Processes
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SILO PERSPECTIVE VERSES BUSINESS PROCESS PERSPECTIVE
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Silo (Functional) Perspective The silo perspective views the business as discrete functions (accounting, sales, production, etc.). Figure 5.1 shows a traditional organizational chart which is how a functional business is organized. Each functional area determines its core competencies and focuses on what it does best. Advantages: Allows optimization of expertise. Group like functions together for learning. Disadvantages: Significant sub-optimization. Tend to lose sight of overall organizational objectives.
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Figure 5.1 Hierarchical Structure
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Process Perspective Keeps the big picture in view. Focuses on work being done to create optimal value for the business. Process is defined as an interrelated, sequential set of activities and tasks that turns inputs into outputs, and includes the following: A beginning and an end Inputs and outputs A set of tasks (sub-processes) that transform the inputs into outputs A set of metrics ? ?   for measuring effectiveness
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Process Perspective Examples of business processes include: customer order fulfillment manufacturing, planning and execution payroll financial reporting procurement (see figure 5.2)
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Figure 5.2 – Sample business process
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Repair & return business process accept the damaged good— business function carried by customer relationship in sales diagnose what is wrong with the product Repair the product
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Sales order process take the sales order-- a business function done by the sales dept either make or pick & box the products ordered– a business function carried out by production dept ship/deliver the products—a business function carried out by the logistics dept bill the customer—a business function carried out by the accounting dept
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Process Perspective Advantages: Helps avoid or reduce duplicate work.
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