Business process automation
Joke from IT-companies life: How IBM Corporation accelerated process of reviewing application for granting loans for PC?
IBM board members wondered why on average it takes almost 1.5 months to review application for granting a loan for PC. During this time most customers buy such a trifle (one or two thousands dollars) somewhere else. In order to test business-process board members decided to conduct an experiment: they immediately fill in the applications and ask to review them as soon as possible. Of course next day they were notified about being granted a loan. We can when we need it!- decided board members and ordered to analyze business-processes.
ess tasks.
They found out that every application is being reviewed by several departments, every department review applications from certain aspects (credit history, debts, property etc) and it is been done consecutively. New applications come to the next department, an expert analyzes it and makes conclusions: grand a loan, refuse or application needs further consideration. When he is reviewing one application all the rest, together with those on which the decision is already made, are stuck on his table. And the process is the same in every department. Decision, which was made by board members, was simple and reorganizing at the same time. Every department set a number of clear canons, by which decision on every application could be made: grand a loan, refuse or application needs further consideration. Then experts designed multi terminal expert system and employed operators (they were trained according to a specially designed program). As a result process started to look like this: application is directed to the operator, operator inputs data into the system, and decision is been made by system- grand a loan, refuse (reasons for the refuse are enclosed) or application needs further consideration (list of the departments that need to review the application). As a result in a couple days customers receive an answer whether they were granted a loan or if they need to wait a little bit longer. Reduce in terms of application reviewing led to sales increase, expert expenses decrease (experts started to do high-skilled work)
This example shows for what, how and what tools are used for optimization, where processes can me automated and the most important- what advantages it brings to business.
As Karl Marx writes in his undeservedly forgotten Capital- eventual goal of any company is to get maximal profit, regardless any other goals it might have. This can be achieved if company has efficient, wisely planned administrative system. Today demands for speed of information flows, proceeding of inner and outer inquires and data exchange is so high that there is no place for such atavisms as isolated workplaces, paper documents and other socialistic methods of management. Otherwise company may drown in unmanaged human resources and paper archives.
How IT can help modern companies to automate and optimize business processes? Since any management process is first of all interchanging, updating, structuring or accounting of corporate data, then company informational structure has to be the core in the management system and first of all bring profit thanks to effective management.
Unrestricted structure of data interchange looks like this: productivity+ inefficiency=0
Modern companies seek after building optimally planned, manageable and safe IT-infrastructure. But usual employees interaction on area networks and Internet does not lead to the desired effectiveness level. Sometimes in the unrestricted human environment additional management and interaction problems appear:
1. Complications may be connected with information flows, data interchange speed and information losses. This is the result of some facts present in any company:
Employees obtain 50-70% of information directly from other people;
More that 80% of information is in the personal folders or on employees local drives;
People possess business information and part of it is lost when they leave.
2. Difficulties in methods of data storage and access. Employees use many ways of data storage. Such variety in methods and types of data storage confuses employees and irritate IT-department stuff, because technical support and maintenance for many different platforms are needed. As a result:
Instead of concentrating on solving business tasks employees have to make decisions on what is the best way to use existing technologies, memorize information placement and spend time on finding it;
Stuff has to work on business tasks instead of solving data access tasks.
Two Approaches to Optimization
Two different but resembling approaches to optimization exist, fundamental difference between them is that in one case processes, existed in the company, are analyzed, transformed and automated on the move, that employee controls and corrects work that is done and released resources are analyzed. Example of this approach is implementing of electronic document management system in the juridical department, IT-solutions usually are chosen based on resemblance between existed and desired level of business-process automation.
In the latter case rule system, processes and implementing methods are designed long and thoroughly. After planning and checking, different forms of automation are designed and implemented on the implementation stage. Previous work experience is being rejected in this case, as example with application reviewing on IBM shows.
Both approaches have their advantages and disadvantages, and areas of implementation. Second one is a result of drastic changes in the management approach in the company and is often connected with the new line establishment or radical changes in the company or on the market. First approach is used where business-processes optimization and improvement leads to eliminating defects or helps to distribute resources in the existed tasks effectively.
But these are two extremes, and there are many transitory stages in between. For example total optimization of every process in the company or partial processes reconstruction in departments. But in both cases we will come across some challenges:
Understanding of our desires. Before optimization, we have to separate existent business-processes, otherwise processes will have to be built from the beginning than their optimality level evaluated and only after this the new processes will be automated.
Doing one thing do not damage the other one. Inefficiency elimination from one aspect can lead to the index decaying from the other one. That is why such procedures need to be discovered, their props and cons evaluated and reasonable decision made.
Every time in the process of effectiveness increase stuff resistance needs to be overcome, employees do not like process optimization because it will cause rise in their exploitation.
It is complicated but it is not impossible
Definitely we are talking about a complicated, extended process, but if we simplify the scheme, we will be able to break it down into its constituent parts. Planning and analyzing lie in processes, resources and information studying and grading:
Company has resources that are an object of management. These are first of all employees, which take part in business-processes, tools, which employees use for work (but very often are used not on purpose. About methods of fight with such inefficiencies you can find out in chapter), documents, information and methods of interaction. Resources are distributed into groups depending on the departments or teams they belong to or by interaction method.
A lot of working processes run in the company. They are initiated in different ways and it is important to understand process initiation in the system of management, whether it is a new document creation, database correction, inner or outer request or other peculiar action. Processes are first of all interactions on the information interchange level.
Existence or necessity of information management system.
Having understanding where attempts need to be applied, process proceeds to the stage of selecting a solution which is the most efficient and is designated for the area that needs to be changed. As a result it can be electronic document management system, project management software, customer relationship management and many others.
Very important is to evaluate whether company IT-infrastructure is ready to accept business-process automation solution, because assurance of information access, reliability and regularity of work obtains new importance level, plan and implement actions to prepare integration of the chosen solution into the IT-structure and start to integrate solution with the resources.
Definitely we are talking about a complicated, extended process, but if we simplify the scheme, we will be able to break it down into its constituent parts. Planning and analyzing lie in processes, resources and information studying and grading:
Company has resources that are an object of management. These are first of all employees, which take part in business-processes, tools, which employees use for work (but very often are used not on purpose. About methods of fight with such inefficiencies you can find out in chapter), documents, information and methods of interaction. Resources are distributed into groups depending on the departments or teams they belong to or by interaction method.
A lot of working processes run in the company. They are initiated in different ways and it is important to understand process initiation in the system of management, whether it is a new document creation, database correction, inner or outer request or other peculiar action. Processes are first of all interactions on the information interchange level.
Existence or necessity of information management system.
Having understanding where attempts need to be applied, process proceeds to the stage of selecting a solution which is the most efficient and is designated for the area that needs to be changed. As a result it can be electronic document management system, project management software, customer relationship management and many others.
Very important is to evaluate whether company IT-infrastructure is ready to accept business-process automation solution, because assurance of information access, reliability and regularity of work obtains new importance level, plan and implement actions to prepare integration of the chosen solution into the IT-structure and start to integrate solution with the resources.
Sure considering investing into expensive systems we would like to ask: What outcome we will have? Though the answer is obvious every case need to be separately examined, because a lot depends on companys field of work and existed solutions:
Enterprise information portal- is applications that allow companies open information both from inside the company and beyond and grant to every user a single access point for assigned for him information, necessary for making reasonable management decisions.
Unified Communications and Collaboration Resources- resources that support collaboration can become efficient tools for business and were designed in a correspondence with companys concept, where telecommunication network is considered as universal environment for business.
Project Management Software- unites all company products into one or couple management project portfolios and assure their management.
Electronic Document Management System- is managerial technical system that ensures creation, access administration and distribution of electronic documents in computer networks, and also monitors documents flows in a company.
Customer Relationship Management- interaction model, which believes that customer is a center of business philosophy, and main business vectors are methods of effective marketing, sales and service.
Contact Centers- are created for customer to be able comfortably and easily interact with your company, but are not limited only to this function; many companies have internal contact centers for technical support and other functions.
Enterprise Resource Planning Systems- is information system, which is used to monitor and plan all resources used in the company; sell and produce products; buy and keep record of raw materials and other resources that are used in the process of primary and secondary production. Primary ERP assignment lies in finding interconnections between departments and creating a single data storage, which has all the information about the enterprise, its services, production, work of all departments etc.
Information on different systems in this article is not for making any choices but just for information. We do not ask you to choose the system on your own and come with your decision. Bring on your tasks and we together can choose optimal solution.
Specialists of our company have all the necessary resources, solutions and qualification for professional and effective implementation of various difficulty level projects for companies of all sizes.
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