Introduction

• An information system is a sociotechnical system, an arrangement of both

technical and social elements

• A sociotechnical system considers not only how inputs are transformed into

outputs but also how interpersonal and social relationships can be

developed for mutual gain by employees and the organization

• In sociotechnical system approach, both technical and social elements

receive high priority, and they are managed for the best possible integration.

• The fundamental objective is to design the whole work system that satisfies

employees, meet production requirements and serves the customer needs.

• In the sociotechnical approach , one cannot install new information

technology without considering the people who work with it.

• This requires redesigning the organization which includes

redesigning organizational processes and structure to make

effective utilization of resources and reshaping organizational

culture to maintain a balance between IT and organizational culture.

• For this the following 4 elements are important:

1. Enterprise resource planning

2. Business process reengineering

3. Structural change

4. Changing organizational culture

Enterprise resource planning

• In today’s competitive business environment , organizations need to

manage their resources in the most effective way to develop

competitive advantage.

• ERP enables the organization to achieve this integration.

• ERP can be defined as a fully integrated business management that

integrates the core business and management processes to provide

an organization a structured environment in which decisions

concerning demand, supply, operations , finance, logistics, etc are

fully supported by accurate and reliable real-time information.

• ERP encompasses all major valve points and consolidates these

into single, enterprise-wide solution that ensures seamless interface

within critical systems thereby allowing the organization to re-invent

itself to changing business needs swiftly and efficiently.

• The major objectives of ERP are to

1. Provide support for adopting best business practices

2. Implement these practices with a view towards enhancing

productivity and

3. Empower the customers and suppliers to modify the implemented

business processes to suit their need

Characteristics of ERP

1. Flexible

2. Modular and open

3. Integrated

4. Best business practices

Benefits of ERP

1. Better use of organizational resources

2. Lower operating costs

3. Proactive decision making

4. Decentralized decision making

5. Enhanced customer satisfaction

6. Flexibility in business operations

Limitations of ERP

• An ERP system provides current status only

• The methods used in ERP applications are not integrated with other

organizational or divisional systems.

ERP implementation

1. Defining need for ERP

2. Engaging consultant for ERP implementation

3. Reengineering the business processes

4. Identifying and evaluating ERP packages

5. Installing hardware and network

6. Implementing ERP package

Requirements for effective ERP implementation

• Focus on corporate goals

• Commitment of top management

• Involvement of entire organization

• Quality of data

• Commensurate training

• Organizational change

BUSINESS PROCES REENGINEERING

– The basic objective of any information system is to produce the best possible

results by eliminating those processes which are not central to the

organizational objectives and by changing those processes which are

central.

– This has led to emergence of BPR

– It is basically a fundamental process of redesigning business processes so

as to gain economy in performing these processes

– It is the fundamental rethinking, and radical redesign of processes to achieve

dramatic improvement in critical , contemporary measures of performance

such as cost, quality and speed

– It can be defined as radical scrutiny, questioning, redefinition and redesign of

business processes with the aim of eliminating all activities not central to

business goals.

OBJECTIVES OF BPR

• Elimination of unnecessary processes

• Reduced cycle time

PROCESS OF BPR

1. Developing business vision and process objectives

2. Identifying the processes to be designed

3. Measuring the performance of existing processes

4. Identifying the opportunity for applying information technology

5. Building the prototype of new process

1. DEVELOPING BUSINESS VISION AND PROCESS OBJECTIVES:

• Before going through the process of redesigning business processes, it is

desirable that business vision is defined clearly so that business

processes function in tune with vision.

• Organizational vision represents the challenging portrait of what the

organization would be in future.

• It implies that the organization should create projections about where it

should go, and what major challenges lie ahead.

• Based on this the organization should define the objectives of business

processes.

• There may be different ways in which business process contribute to

business vision like, lowering costs by shortening process cycle time,

providing timely information to various stakeholders and so on.

IDENTIFYING THE PROCESSES TO BE DESIGNED

• After defining business vision and process objectives, the

organization should identify those processes that redesigning.

• At the initial stage it is desirable to identify these processes that are

performed repeatedly and have greatest potential payback such as

manufacturing process, order receiving and execution product

shipping, data entry, etc.

• The analysis should identify which organizational group owns a

process , which organizational functions/departments are involved in

the process, and what changes are required.

MEASURING THE PERFORMANCE OF EXISTING PROCESSES

• Before going through redesigning , performance of existing

organizational processes should be measured to find out the type of

reengineering needed.

• Two commonly used methods are benchmarking and process

evaluation.

Identifying the opportunity for applying information

technology

• With the development and widespread use of IT more emphasis is

being placed on how IT can be used to support a process and

redesign the process accordingly.

Building the prototype of new process

• The organization should design a new process on an experimental

basis , anticipating a series if revisions and improvements until the

redesigned process is put into actual operation

• the prototype must be tested to measure its performance and

incorporate needed changes.

• After the testing phase is over and necessary corrections are

incorporated , the process can be put into operation.