Journal of Emerging Trends in Computing and Information Sciences ©2009-2012 CIS Journal. All rights reserved. http://www.cisjournal.org
Impact of IT on Process Improvement
Lotfollah najjar, 2 Ziaul huq, 3 Seyed-mahmoud aghazadeh, 4 Saeedreza hafeznezami
College of Information Science & Technology, University of Nebraska at Omaha, USA, Fax: 402-554-3284, 2 College of Business Administration, University of Nebraska at Omaha, USA, Fax: 402-554-268, 3 Department of Business Administration, School of Business, State University of New York at Fredonia, Fredonia, Ny 14063, USA, Fax: 716-673-3332, 4 Civil and Environmental Engineering UCLA, 5731 Boelter Hall, box 951593 Los Angeles, CA 90095-1593 1
lnajjar@.unomaha.edu, 2ziaul_huq@unomaha, email@example.com, firstname.lastname@example.org.
There has been a lack of empirical research related to the role of IT in process improvement in a multidimensional way. The purpose of this paper is to investigate the extent that IT could be used (from low tech to high tech and constraint to proactive), type of process reengineering projects employed (compromise to radical) and their effect on firm performance. The firm performance was defined as market share, customer relationships Management, IT impact, and efficiency (as multifaceted such as lowering the cost, lowering the process variability, and lead time). Data from 108 small-to-medium sized organizations both in service and in manufacturing were collected for this study. Both Factor Analysis and MANOVA Analysis were employed to analyze these relationships and to find out the optimum points (interaction among the types of IT and types of BPR) and their effect on firm performance. ). The result showed that organizations that adapt high technology alone or BPR alone cannot achieve the same result and business performance as the organization that benefits from interdependency between IT and BPR. Keywords: BPR, IT, Organizational Performance, Process Improvement, CRM, Efficiency, Factor Analysis, MANOVA.
The modern business organization is a complex collection of business processes, which cross multiple business units and handle everything from the mundane daily operations to core business processes. Many of these business processes have changed very little since their original implementation, thus failing to take advantage of new best practices or technological advancements. Over time, businesses realized that their current processes were no longer providing a competitive advantage, and that changes to processes were necessary in order to improve performance. In order to change the processes or to build completely new ones, process redesign or improvement must take place. Whether the method is Total Quality Management (TQM), Six Sigma, Business Process Reengineering (BPR), or one of the many others, the core concepts are the same: streamline the process, reduce costs, and remove waste. Process improvements can be incremental and continuous, or they can be giant leaps that fundamentally change the way organizations do business. One thing in common with all process improvement initiatives is that information technology is a major component, regardless of the method. Hammer and Champy (1993) state IT is an enabler of BPR, and while this is still true information technology has become more than just an enabler. Just as throwing money at a problem will not make it go away, a business problem can’t be reengineered simply by
throwing new information systems at it (Hammer & Champy, 1993). 1.1 Business Process Improvement The drive for process improvement is not new. Process improvement methodologies have been developed and used for over 30 years. Six Sigma was developed in the mid 1980s as a way to improve manufacturing processes (Drake, Sutterfield, & Ngassam, 2008). Business process reengineering pushed to the forefront of process improvement in...