Page 494 - Using MIS

462 Chapter 12 Information Systems Development
Change in Technology

Changing technology is a second reason for managing processes. For example, suppose the
equipment supplier who uses the business process in Figure 12-1 invests in a new information
system that enables it to track the location of trucks in real time. Suppose that with this capabil-
ity the company can provide next-day availability of goods to customers. That capability will be
of limited value, however, if the existing credit-checking process requires 2 days. “I can get the
goods to you tomorrow, but I can’t verify your credit until next Monday” will not be satisfying to
either customers or salespeople.
Thus, when new technology changes any of a process’s activities in a significant way, the
entire process needs to be evaluated. That evaluation is another reason for managing processes.

Change in Business Fundamentals

A third reason for managing business processes is a change in business fundamentals. A sub-
stantial change in any of the following factors might result in the need to modify business
processes:

• Market (e.g., new customer category, change in customer characteristics)
• Product lines
• Supply chain
• Company policy
• Company organization (e.g., merger, acquisition)
• Internationalization
• Business environment

To understand the implications of such changes, consider just the sequence of verifying
availability and checking credit in Figure 12-1. A new category of customers could mean that the
credit-check process needs to be modified; perhaps a certain category of customers is too risky
to be extended credit. All sales to such customers must be cash. A change in product lines might
require different ways of checking availability. A change in the supply chain might mean that
the company no longer stocks some items in inventory but ships directly from the manufacturer
instead.
Or the company might make broad changes to its credit policy. It might, for example, de-
cide to accept more risk and sell to companies with lower credit scores. In this case, approval of
special terms becomes more critical than checking credit, and the sequence of those two activi-
ties might need to be changed.
Of course, a merger or acquisition will mean substantial change in the organization and its
products and markets, as does moving portions of the business offshore or engaging in interna-
tional commerce. Finally, a substantial change in the business environment, say, the onset of a
recession, might mean that credit checking becomes vitally important and needs to be moved
to first in this process.

What Are BPM Activities?

The factors just discussed will necessitate changes in business processes, whether the organiza-
tion recognizes that need or not. Organizations can either plan to develop and modify business
processes, or they can wait and let the need for change just happen to them. In the latter case,
the business will continually be in crisis, dealing with one process emergency after another.
Figure 12-5 shows the basic activities in business process management (BPM), a cyclical
process for systematically creating, assessing, and altering business processes. This cycle begins
by creating a model of the existing business process, called an as-is model. Then business users
who are involved in the process (this could be you!) and business and systems analysts evaluate
that model and make improvements. As you learned in Chapter 7, business processes can be
improved by changing the structure of the process, by adding resources, or both. If the process