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| Chapter 2: Current IT and Business Divide |
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Technology and business processes
Technology is just an enabler of productivity, efficiency and cost reduction. Businesses cannot get productivity gains and become process managed just by getting the latest and greatest technology. Business need to work hard and change to become process managed. Technology needs to be weaved into the organization business processes to achieve maximum efficiencies and agility. As we saw in Figure 1.2 Information technology is just one part of the axis when it comes to being a process managed enterprise. The real killer apps of the past decades have been super efficient and super agile business processes like the supply chain process of Wal-mart and direct model process of Dell - technology has just been a catalyst for this kind of process innovation. IT Applications and Infrastructure ... Business data has been collected over the years -thanks to RDMS (Relational Database Management Systems). Databases are excellent in capturing and retrieving data. Databases have allowed companies to capture complex and vast amounts of data in a relational fashion. RDMS have matured over the years and are very efficient and reliable - easily supporting millions of transaction per day. As a result vast amounts of data have been created over the years. Data warehousing tools are used to analyze this data to research trends and forecast demand. In most organizations managing this vast amount of data and deriving any business value out of this huge amount of data is the greatest problem. Most organizations are department based as we saw in chapter 1 and have different view of the same data. The sales department and marketing department of the same organization might have different view of the customer data. As a result data quality suffers. In one of my consulting assignments with a global financial institution different departments had different definition and storage formats for "perspective clients". The pace of business change is making this data irrelevant sooner than it had in the past. Forecasting done against obsolete data can result in bad business decisions. Putting this data in a real time process context is extremely challenging as this data resides in multiple repositories. Since the early 1990 there has been a lot of hype about EAI (Enterprise Application Integration) and B2B (Business-to-business) integration as a solution to all business process and data problems. EAI platforms replace a lot of "point-to-point" integration. EAI projects focus on data and are extremely complex and expensive to implement. Later packaged applications like CRM (Customer Relationship Management), SCM (supply chain management) and ERP (enterprise resource planning) have emerged as good standalone department specific systems. Howard Smith co-chair of Business Process Management Initiative (BPMI.org) says "These packages implemented best-practice processes but did so by ingraining business processes in the software applications that supported them. These solutions had all the flexibility of wet concrete before they were installed and all the flexibility of dry concrete after installation." Enterprises have created pockets of automation and numerous data repositories. All these applications, automation and data repositories do not deliver an efficient and agile end-to-end business process management solution. Current IT infrastructure does not address the fact that business process will continue to change at a rapid pace. Most organizations today have what I call a rigid and brittle IT infrastructure. Organizations which have rigid and brittle IT Infrastructure .... ..... ..... .... Bridge the Business and IT Divide IT applications on which business processes depend are rigid. Implementing change is complex, expensive and time consuming. Organizations need a holistic approach to manage their business processes. Organizations do not need another set of tools or packaged software applications. What organizations need is a set of infrastructure, technologies and methodologies that can help the business manage their business processes. Business managers need more control in terms visibility and manageability over their business processes. These technologies and methodologies should work around the process and not around data or technology. Business managers need the tools and technologies to manage end-to-end business processes in real-time. Necessity is the mother of invention. Business Process Management (BPM) attempts to shrink the business and IT divide. BPMS (Business process management systems) are built using BPM tools. BPM enables companies to design, model, deploy and manage business processes for the extended enterprise. Born from the need to continuously manage business change BPM systems will enable corporations to manage their business processes in real time. BPMS will create actionable business intelligence in real-time not after the fact reports and analysis. ... ... |
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