System Moduling

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Define Business Process
Organizational Structure ERP Systems Approached to Business Process Change

*Chapter 2

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Vision/mission [reason for existence]

Strategy [how to operationalize the mission?] Objectives
[achieve the objectives through business process]

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Michael Porter: Author and researcher in the field of organizational strategy Proposes 2 paths for org strategy: ◦ ◦ cost leadership – cheaper that competitors differentiation – uniqueness of product + service

5 steps to achieve strategy (Considine, 2010:47)

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However, strategic focus should not be internal only An organization should have a holistic image of the industry in which it operates Porter suggests 5 external forces that shape and influence industry (Considine, 2010:47) Strategy should be shaped by these forces as well







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What is a business process? Defined sequence of events to achieve objectives, Objectives operationalize the strategy Strategies are required to realize vision of the company

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Our focus…. e.g. business processes: Student Registration Online purchase Borrowing an artefact from library

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Define Business Process
Organizational Structure ERP Systems Approached to Business Process Change

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Two types of organization: Functional and Business Process Driven

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Functional Perspective
Frederick Taylor’s scientific management: ◦ Clearly defined tasks and roles for employees ◦ Create specialist employees in a narrow area ◦ Employees have no task awareness

“Humans are viewed as machines”

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Benefits
Provides sound organisational control Highly defined and specified tasks exist

Problems and limitations
◦ ◦ ◦ ◦ Not reflective of the reality of today Information and communication problems Slow to react to change in the environment Focuses on the wrong things i.e. ‘worry about boss instead of customer’

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Business Process Perspective BP redefined:

A business process is a series of interlocking activities that work together, across the organisation, to achieve some predetermined organisational goal (typically defined around satisfying customer needs) (Considine, 2010:54)

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e.g. Sales Aim: To sell goods and collect cash from sales

Participants: Sales staff, customer, billing staff, warehouse Inputs: Sales order Outputs: Invoice, receipt, shipping document

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e.g. Purchasing Aim: To acquire goods from suppliers and appropriately manage stock Participants: Sales staff, customer, billing staff, warehouse Inputs: Purchase requisition, back order Outputs: Purchase order

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Advantages of BP perspective:
◦ ◦ ◦ ◦ ◦ Better utilization of resources Reduced bureaucracy more flexibility, innovation Lean production or service provision Improved customer relations, satisfaction Value adding emphasis instead of task completion

(Considine, 2010:57-61)

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Define Business Process
Organizational Structure ERP Systems Approached to Business Process Change

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Given the business process perspective, the company needs systems that will support this type of organizing.

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What is an ERP System?
Enterprise Resource Planning System

An ERP system is a set of information system modules that attempts to integrate...
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