Enterprise business management

ABSTRACT

Enterprise business management system came into existence in the 90's and has become so popular today that almost every organization uses one. Recent years have seen increased usage on this management system, but sadly not all organizations implement it. Analysts and scholars have long since studied these systems in a bid to provide explanations for the complexity and failure of implementation attempts.

This project therefore focuses on the benefits of Enterprise Business Process Management and its applications. The main purpose of the work is to establish a set of 'best practices' that must be considered or executed in order to secure a successful organization rich in values. In order to achieve the main goal of this work, many case studies have been inferred. Mainly scientific research techniques which comprise a new and innovated approaches are used and some valuable conclusions are drawn from the analyzed data.

The critical points that are worth considering during EBM implementation include: Strategic Cross-Functional Management, System Thinking, Corporate growth perspective, focusing on core competencies, Innovative business models and creating Customer value.

An effective way of transforming the conventional functional mindset is to embrace enterprise business process thinking and install enterprise business management (EBM) practices. Enterprise system and business are aligned when enterprise system supports business strategy, goals and requirements. Enterprise systems help the organizations to increase their efficiency, tproductivity, quality and competition level.

INTRODUCTION

"Process is a revolution in thought that leads to changes in business."

In many organizations, top management's traditional functional mindset represents one of the most significant obstacles to change. Indeed, there is reason to believe that this traditional mindset has done more to impede the customer, business process improvement over the past two decades than almost any other factor.

This type of thinking stands in the way of executives understanding and improving the flow of cross-functional activities which create enduring values for customers. It promotes the type of thinking that stops the effective deployment of enabling information technology. It promotes also 'silo behavior' and turf protection, and an undue pre-occupation with organization structure. This mindset contributes to the mistaken beliefs that if it was somehow possible to properly define the boxes on the organizational chart, and fill in the names of the "right" people in the key boxes - then the organization's performance will automatically improve. Yet, little is further from the truth. Further, it encourages a distorted view of performance measurement and executive rewards, shifting focus away from meaningful measures such as the timeliness and quality of services provided to customers, and towards less significant measures around functional departmental performance.

It reinforces a task focus and traditional command and control behavior, where questions such as 'What is the scope of my responsibility?' and 'Who are the key subordinates who can help me look good?' are foremost and top of mind. Moreover, traditional thinking has also led to outdated management policies in the areas of goal setting and problem solving and it stifles innovation. So what to do? How can you transform the traditional functional mindset such that your organization is designed to make it easy for customers to do business with the company and easier for employees to serve better?

ENTERPRISE BUSINESS MANAGEMENT

EBM, is the one stop solution to all, is "a deliberate and collaborative approach to systematically manage all of a company's business processes.

EBM addresses the urgent need of the new knowledge-driven economy to integrate business process thinking with strategy, organizational structure and people issues. It requires that your executive team lead manages things differently and look more systemically about your business.

Mostly multiple value chain participants must collaborate to deliver value; they must all participate in process analysis and design and achieve team learning. Only with the direction provided by process management can end-to-end processes be understood, anomalies spotted, redundancy eradicated and inefficiencies eliminated.

Process management integrates everyone and everything once; thereafter, design, transformation and experience take place freely and continuously, not as a series of infrequent, long-winded, piecemeal and distracting "integration projects" for each new process design. In this way, participants truly learn about the process and their side effects.

Enterprise-wide Business Process Management (EBPM)

  • Look at the business from the outside-in, from the customer's perspective, as well as from the inside-out.
  • Integrate strategy with enterprise business processes.
  • Transform strategy to inspire, from the classroom to the lunchroom.
  • Design enterprise business processes to deliver on strategic goals.
  • Ensure that organization design provides clarity such that enterprise business process is executed.
  • Deploy enabling technology based on the value added to enterprise business process performance.
  • Integrate the enterprise performance measurement system to budgets and operating reviews.
  • Sustain focus and alignment.

Why CFM?

Cross-functional management emerged because of 2 reasons:

  • A need for top level executives to clarify its queries on quality, cost and delivery goals and deploy them to all sectors, and
  • A need to establish a system of nexus among different departments.

What Is CFM?

Cross-functional management (CFM) manages business processes across all boundaries of the functional areas. CFM relates to coordinating and synergizing the activities from different levels for realizing the super ordinate cross-functional goals. It is concerned with building a better system for achieving such goals such as innovation, quality, cost and delivery.

Example in Toyota

Toyota was the foremost company in Japan with cross-functional management

At Toyota, all members are board members representing the departments, such as quality or delivery. The goals and measures defined by the committee carry the same responses as those coming from the board. Each committee has about 15 members and is headed by a top official appointed by the president.

Strategic Cross-Functional Management

Peter Drucker likes today's executive and his strategic plan to the symphony conductor with a complex musical score to direct. The conductor cannot hope to play each instrument as well as the specialized symphony members can, and so those experts are left alone to perfect their individual contributions. However, the conductor interprets the score and communicates to the orchestra an overall vision for how the piece should sound. Without the conductor and this shared understanding of the score, symphony becomes cacophony. Similarly, without executive leadership and direction the company process would be in total confusion.

Strategic cross-functional management is pivotal to capitalizing on functional excellence. They must take a broader view of their functions and understand how they fit into the organizational processes and, ultimately, into the overall business.

Systems Approach to Management

The traits and approaches of cross-functional management were developed to meet the need for systems approach to achieving the cross-functional goals.

Within this concept:

Quality is concerned with building a better process for the future.

Cost is concerned with building a cost effective system.

Delivery refers to a better system devoid of any errors.

The payoffs of process mastery can be breathtaking. Costs melt away, quality goes through the roof, and time spans shrink to a fraction of what they were. In 1999 Hammer and Company surveyed dozens of companies that had adopted the process approach to work and business.

In order fulfillment, cycle times had typically decreased by 40% to 70%

"Perfect orders" had increased by 25%

The cost of performing procurement transactions had been slashed by more than 80%

In product development, the percentage of successful launches rose by 30% to 50%

The time required to bring a new product to market was shortened by 50% to 75%

These improvements in process performance paid off in the critical enterprise currencies of customer satisfaction, customer retention and corporate profits.

The good news is that these remarkable improvements are not atypical. In fact, they are the norm. The bad news is that achieving them requires a wholehearted commitment to process.

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