Individual Requirement M.C

8/14/2019 Individual Requirement M.C

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First Requirement for

Management Consultancy

And

Information Systems


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Submitted by: Submitted to:

Patrick R. Tuzon Dr. Gloria T. Baysa

BSA 4-5

I. Management Consultancy

Management consulting refers to both the industry of, and the practice of, helping organizations

improve their performance, primarily through the analysis of existing business problems and

development of plans for improvement.

Organizations hire the services of management consultants for a number of reasons, including

gaining external (and presumably objective) advice, access to the consultants' specialized

expertise, or simply as extra temporary help during a one-time project, where the hiring of more

permanent employees is not required.

Because of their exposure to and relationships with numerous organizations, consultancies are

also said to be aware of industry "best practices", although the transferability of such practices

from one organization to another is the subject of debate.

Consultancies may also provide organizational change management assistance, development of

coaching skills, technology implementation, strategy development, or operational improvement

services. Management consultants generally bring their own, proprietary methodologies or
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frameworks to guide the identification of problems, and to serve as the basis for

recommendations for more effective orefficient ways of performingbusiness tasks.

History

Management consulting grew with the rise ofmanagement as a unique field of study. The first

management consulting firm was Arthur D. Little, founded in 1886 by the MIT professor of the

same name. Though Arthur D. Little later became a general management consultancy, it

originally specialized in technical research. Booz & Company was founded by Edwin G. Booz, a

graduate of the Kellogg School of Management at Northwestern University, in 1914 as a

management consultancy and the first to serve both industry and government clients.

After World War II, a number of new management consulting firms formed, most notably Boston

Consulting Group, founded in 1963, which brought a rigorous analytical approach to the study of

management and strategy. Work done at Boston Consulting Group, McKinsey, Booz &

Company, and the Harvard Business School during the 1960s and 70s developed the tools and

approaches that would define the new field ofstrategic management, setting the groundwork for

many consulting firms to follow. In 1983, Harvard Business School's influence on the industry

continued with the founding ofMonitor Group by six professors.

One of the reasons why management consulting grew first in the USA is because of deep cultural

factors: it was accepted there, (contrary to say, Europe), that management and boards alike might

not be competent in all circumstances; therefore, buying external competency was seen as a

normal way to solve a business problem. This is referred to as a "contractual" relation to

management. By contrast, in Europe, management is connected with emotional and cultural
http://en.wikipedia.org/wiki/Efficiency_(economics)http://en.wikipedia.org/wiki/Businesshttp://en.wikipedia.org/wiki/Managementhttp://en.wikipedia.org/wiki/Arthur_D._Littlehttp://en.wikipedia.org/wiki/Booz_%26_Companyhttp://en.wikipedia.org/wiki/Edwin_G._Boozhttp://en.wikipedia.org/wiki/Kellogg_School_of_Managementhttp://en.wikipedia.org/wiki/Northwestern_Universityhttp://en.wikipedia.org/wiki/Boston_Consulting_Grouphttp://en.wikipedia.org/wiki/Boston_Consulting_Grouphttp://en.wikipedia.org/wiki/Boston_Consulting_Grouphttp://en.wikipedia.org/wiki/McKinseyhttp://en.wikipedia.org/wiki/Booz_%26_Companyhttp://en.wikipedia.org/wiki/Booz_%26_Companyhttp://en.wikipedia.org/wiki/Harvard_Business_Schoolhttp://en.wikipedia.org/wiki/Strategic_managementhttp://en.wikipedia.org/wiki/Monitor_Grouphttp://en.wikipedia.org/wiki/Efficiency_(economics)http://en.wikipedia.org/wiki/Businesshttp://en.wikipedia.org/wiki/Managementhttp://en.wikipedia.org/wiki/Arthur_D._Littlehttp://en.wikipedia.org/wiki/Booz_%26_Companyhttp://en.wikipedia.org/wiki/Edwin_G._Boozhttp://en.wikipedia.org/wiki/Kellogg_School_of_Managementhttp://en.wikipedia.org/wiki/Northwestern_Universityhttp://en.wikipedia.org/wiki/Boston_Consulting_Grouphttp://en.wikipedia.org/wiki/Boston_Consulting_Grouphttp://en.wikipedia.org/wiki/Boston_Consulting_Grouphttp://en.wikipedia.org/wiki/McKinseyhttp://en.wikipedia.org/wiki/Booz_%26_Companyhttp://en.wikipedia.org/wiki/Booz_%26_Companyhttp://en.wikipedia.org/wiki/Harvard_Business_Schoolhttp://en.wikipedia.org/wiki/Strategic_managementhttp://en.wikipedia.org/wiki/Monitor_Group


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dimensions, where the manager is bound to be competent at all times. This is referred to as the

"pater familias" pattern. Therefore seeking (and paying for) external advice was seen as

inappropriate. However, it is sometimes argued that in those days the average level of education

of the executives was significantly lower in the USA than in Europe, where managers were

Grandes Ecoles graduates (France) or "Doktor" (Germany), though this is very difficult to

quantify given the vastly differing management structures in American and European businesses.

It was only after World War II, in the wake of the development of the international trade led by

the USA, that management consulting emerged in Europe. The current trend in the market is a

clear segmentation of management consulting firms.

Another branch of management consulting is Human Resource consulting. Such firms provide

advice to their clients regarding the financial and retirement security, health, productivity, and

employment relationships of their global workforce

Specializations

Management consulting refers generally to the provision of business consulting services, but

there are numerous specializations, such as information technology consulting, human resource

consulting, and others, many of which overlap, and most of which are offered by the large

diversified consultancies listed below. So-called "boutique" consultancies, however, are smaller

organizations specializing in one or a few of such specializations

1. Areas of Management Consultancy

Manufacturing & Business Services
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Involving a review of the layout of a production department, production control arrangements,

productivity and incentive schemes or quality control problems

Financial& Management Controls

The Installation of budgetary control systems, profit planning or capital and revenue budgeting,

office reorganization and administrative arrangements,

Human Resources

Advising on personnel policy, manpower planning, job enrichment, job evaluation and industrial

relations

Information Technology

Defining information needs, the provision of software, systems analysis and design, computer

feasibility studies, implementing computer applications, and making computer hardware

evaluations

Environmental Management

This includes urban and regional development planning, international economic research, cost

benefit and social analysis studies and physical economic, ecological and sociological studies for

the encouragement of quality of lifestyle

Quality Management


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Setting of policy strategy, customer satisfaction, performance measurement, people management

and processes

2. Professional attitude of Management Consultants

On joining a firm of management consultants, the new entrant will normally receive several

months of induction and training. During that time, they will be under the guidance of an

experienced consultant, where their diagnostic skills are developed and the professional

standards of their firms are impressed on their mind. Particular attention is drawn to the writing

of clear, considered English, and the ability to present thoughts and ideas verbally to clients. In

addition, the opportunity will be taken to provide additional training to fill any gaps in

knowledge and experience.

Although no organizational framework is common to all consultancies, most have established a

formal career structure for their staff: a consultant progressing responsibility for the detailed day

-today conduct of an assignment, and later the team leader in a multidiscipline assignment.

3. Consultancy Practice

A. Organization

In general, various approaches to consulting can be thought of as lying somewhere along a

continuum, with an 'expert' or prescriptive approach at one end, and a facilitative approach at the

other. In the expert approach, the consultant takes the role of expert, and provides expert advice

or assistance to the client, with, compared to the facilitative approach, less input from, and fewer


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collaborations with, the client(s). With a facilitative approach, the consultant focuses less on

specific or technical expert knowledge, and more on the process of consultation itself. Because

of this focus on process, a facilitative approach is also often referred to as 'process consulting,'

with Edgar Schein being considered the most well-known practitioner. The consulting firms

listed above are closer toward the expert approach of this continuum.

Many consulting firms are organized in a matrix structure, where one 'axis' describes a business

function or type of consulting: for example, strategy, operations, technology, executive

leadership, process improvement, talent management, sales, etc. The second axis is an industry

focus: for example, oil and gas, retail, automotive. Together, these form a matrix, with

consultants occupying one or more 'cells' in the matrix. For example, one consultant may

specialize in operations for the retail industry, and another may focus on process improvement in

the downstream oil and gas industry.

B. Management Standards

A would-be management consultant must posses

Integrity - your clients interest come first

Intelligence - to follow situation accurately and develop sound solutions

The ability to communicate - listening as well as talking

An enquiring mind - every problem must have a solution

Clarity of expression - both verbally and in writing

Personality - to get on well with people on all levels

C. Ethical Considerations
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Commitment to Clients

1.0 I will serve my clients with integrity, competence, independence, objectivity, and

professionalism.

2.0 I will mutually establish with my clients realistic expectations of the benefits and results of

my services.

3.0 I will only accept assignments for which I possess the requisite experience and competence

to perform and will only assign staff or engage colleagues with the knowledge and expertise

needed to serve my clients effectively.

4.0 Before accepting any engagement, I will ensure that I have worked with my clients to

establish a mutual understanding of the objectives, scope, work plan, and fee arrangements.

5.0 I will treat appropriately all confidential client information that is not public knowledge, take

reasonable steps to prevent it from access by unauthorized people, and will not take advantage of

proprietary or privileged information, either for use by myself, the client's firm, or another client,

without the client's permission.

6.0 I will avoid conflicts of interest or the appearance of such and will immediately disclose to

the client circumstances or interests that I believe may influence my judgment or objectivity.

7.0 I will offer to withdraw from a consulting assignment when I believe my objectivity or

integrity may be impaired.

8.0 I will refrain from inviting an employee of an active or inactive client to consider alternative

employment without prior discussion with the client.

Commitment to Fiscal Integrity


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9.0 I will agree in advance with a client on the basis for fees and expenses and will charge fees

that are reasonable and commensurate with the services delivered and the responsibility

accepted.

10.0 I will not accept commissions, remuneration, or other benefits from a third party in

connection with the recommendations to a client without that client's prior knowledge and

consent, and I will disclose in advance any financial interests in goods or services that form part

of such recommendations.

Commitment to the Public and the Profession

11.0 If within the scope of my engagement, I will report to appropriate authorities within or

external to the client organization any occurrences of malfeasance, dangerous behavior, or illegal

activities.

12.0 I will respect the rights of consulting colleagues and consulting firms and will not use their

proprietary information or methodologies without permission.

13.0 I will represent the profession with integrity and professionalism in my relations with my

clients, colleagues, and the general public.

14.0 I will not advertise my services in a deceptive manner nor misrepresent or denigrate

individual consulting practitioners, consulting firms, or the consulting profession.

15.0 If I perceive a violation of the Code, I will report it to the Institute of Management

Consultants USA and will promote adherence to the Code by other member consultants working

on my behalf.


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I. Information Systems

In a general sense, the term Information System (IS) refers to a system ofpeople, data records

and activities that process the data and information in an organization, and it includes the

organization's manual and automated processes. In a narrow sense, the term information system

(orcomputer-based information system) refers to the specific application software that is used

to store data records in a computer system and automates some of the information-processing

activities of the organization. Computer-based information systems are in the field ofinformation

technology. The discipline of business process modeling describes the business processes

supported by information systems

Overview

There are various types of information systems, for example: transaction processing systems,

decision support systems, knowledge management systems, database management systems, and

office information systems. Critical to most information systems are information technologies,

which are typically designed to enable humans to perform tasks for which the human brain is not

well suited, such as: handling large amounts of information, performing complex calculations,

and controlling many simultaneous processes.
http://en.wikipedia.org/wiki/Systemhttp://en.wikipedia.org/wiki/Peoplehttp://en.wikipedia.org/wiki/Datahttp://en.wikipedia.org/wiki/Informationhttp://en.wikipedia.org/wiki/Application_softwarehttp://en.wikipedia.org/wiki/Information_technologyhttp://en.wikipedia.org/wiki/Information_technologyhttp://en.wikipedia.org/wiki/Business_process_modellinghttp://en.wikipedia.org/wiki/Business_processeshttp://en.wikipedia.org/wiki/Systemhttp://en.wikipedia.org/wiki/Peoplehttp://en.wikipedia.org/wiki/Datahttp://en.wikipedia.org/wiki/Informationhttp://en.wikipedia.org/wiki/Application_softwarehttp://en.wikipedia.org/wiki/Information_technologyhttp://en.wikipedia.org/wiki/Information_technologyhttp://en.wikipedia.org/wiki/Business_process_modellinghttp://en.wikipedia.org/wiki/Business_processes


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In order for the engagement process to be successful it is important that the client

understand its role in the review and is familiar with the internal audit function at East

Carolina University. Stepping Trough the Engagement Process has been written with

the client in mind and explains the engagement process as well as the role of the internal

auditor and the internal audit department. From this point on the Office of Internal Audit

will be referred to as Internal Audit

What is its scope of authority?

In accordance with the audit charter, Internal Audit has unrestricted access to all records, assets,

and other resources of the University, which are necessary to accomplish its objectives. Internal

Audit ensures the safekeeping and confidentiality of all records and information used during an

engagement.

Who is reviewed and why?

Internal Audit develops an annual audit plan that is reviewed and approved by the Board of

Trustees and the Chancellor. This plan identifies the engagement projects to be conducted during

the upcoming fiscal year; however, it can be amended to include requested reviews, special

projects, or changes in priority.

Not all reviews are selected in the same way. An area can be selected for a review if:

It's assessed as an area with high risk

It's a cyclical engagement project

Irregular conduct is alleged and a review is requested


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There is a request from management

Selection based on assessment of risk: The most common method of selecting an area for an

engagement is through the application of a risk assessment. Several factors that are considered in

the assessment are:

Internal control structure

External regulations

Financial impact

Complexity of operations

Prior engagement findings

Length of time since last engagement

When this model is applied, areas are ranked according to their risk. Areas with the greatest risk

become priority engagements and can result in three types of engagements: compliance,

operational, or information systems.

Cyclical engagements: Some engagements are performed on a regular basis. Examples are:

petty cash reviews, inventory counts, security reviews, and disaster recovery testing.

Investigative engagements: These engagements are normally requested by management and/or

anonymous tips and focus on alleged, irregular conduct. Reasons for investigative engagements

include: internal theft, misuse of State property, and/or conflicts of interest.


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Requests from management: Management requests these engagements through the Office of

Internal Audit. The scope of the engagement depends on the request.

How is the scope of the engagement determined?

The scope of the engagement and/or review is determined from one or more of the following:

Information collected during a preliminary survey, which includes interviews with the

appropriate client personnel

Assessment of risk associated with the client's functions

Evaluation of answers received on internal control questionnaires tailored for the

assignment

Client requests concerning topics, functions and/or time frame

Sometimes discoveries or events that occur during a project can change the scope of an

engagement. If this should happen, the client is notified if the scope changes significantly.

How long does an engagement last?

Engagements and reviews vary in length. The amount of time required depends on the objectives

of the engagement, the cooperation and availability of the client, and the complexity of the

operation. An internal control review may take one to two weeks, while a broad-based

engagement may take months. A positive working relationship between the client and the

auditors is an important factor in the accuracy of information gathered and the timely completion

of the engagement.


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What is the actual engagement process?

1. The engagement or review is announced through an engagement letter.

Internal Audit notifies the client in writing when their area is selected for an audit. An

engagement letter is sent to the client, which describes the general objectives of the

engagement, the auditor in charge, the projected time frame of the engagement, and

information the auditor may need the client to supply.

2. An entrance conference is scheduled.

An entrance conference is scheduled by the auditor in charge with the client to discuss the

purpose, scope, and process of the engagement. The director and auditor in charge attend the

entrance conference along with personnel deemed appropriate by the client. Clients are

encouraged to present any questions or concerns they have about the engagement. Clients are

also given the opportunity to request that a specific function or area of their office be

examined during the engagement or in future work.

3. A preliminary survey is performed.

During this portion of the engagement, the auditor will gain an understanding of the client's

operation or area being reviewed. The auditor may request written policies and procedures,

organizational charts, job descriptions, and other information in order to become familiar


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with the client's operation. Internal controls may be reviewed and documented during this

portion of the engagement through an internal control questionnaire.

4. Fieldwork is conducted.

This phase of the engagement includes testing the internal controls and performing other

procedures necessary to accomplish the objectives of the engagement. The auditor will

follow a work program when conducting this phase of the engagement. A work program lists

the control objectives of the engagement and the necessary steps an auditor must follow to

collect and analyze the data.

This phase of the engagement is the most time-consuming part of the review for the client

because personnel will need to be available to answer questions and provide information.

Internal Audit realizes the value of each person's time and tries to arrange meetings in

advance and work around scheduling conflicts when possible.

During this phase of the engagement, the auditor will strive to maintain an open

communication with the client to ensure they are kept abreast of the initial observations and

there are no surprises once the final report is issued.

5. Draft report is prepared.

After the fieldwork is completed, the auditor prepares a draft report, which will include the

background of area being audited, audit purpose, objectives, scope, methodology, reportable


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conditions, and recommendations. The draft report along with any non-reportable condition

is sent to the client via e-mail for review before the exit conference.

6. An exit conference is scheduled.

An exit conference is scheduled by the auditor in charge with the client to discuss the draft

audit report. The director and auditor in charge attend the exit conference along with client

personnel. The conference is an opportunity to discuss the observations and clarify any

ambiguities. Non-reportable conditions will also be discussed during the exit conference.

7. Client submits their responses to the audit findings and recommendations.

After the exit conference, any changes deemed necessary are made to the draft report and

submitted to the client via e-mail. The client is normally given 30 days to respond to the draft

report. The client includes a response to each of the observations and recommendations and

sends the report to the auditor in charge via e-mail. If circumstances arise that prohibits the

client from responding to the report in the allotted time frame, the client should contact the

director to request more time.

8. The final report is issued.

A final report is issued after the auditor in charge receives the draft report with the client's

responses. The final report is distributed to the client, senior-level management, ECU Board

of Trustees, and the Chancellor.


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9. Post-engagement survey.

As part of a self-evaluation program, Internal Audit asks client's to comment on their

performance. After the final report is distributed, Internal Audit will send client management

a post-engagement survey to evaluate their performance concerning the review process.

Clients need to be very honest when completing this survey because it will be used to

evaluate procedures and make changes as a result of a client's suggestions.

10. Follow-up review.

A follow-up review is performed approximately 9 months after the final report is issued to

verify the resolution of the observations. The review will conclude with a follow-up report,

which lists the actions taken by the client to resolve the original observations. A discussion

draft of the report will be circulated to the client before the report is issued. The follow-up

report will be circulated to the original report recipients and other University officials as

deemed appropriate

2. Management of operations audit

The operations audit objective is to provide an independent and objective evaluation of the

quality and effectiveness of internal operations including internal controls established by

management. Associations are encouraged to complete an association risk assessment, which

encompasses all relevant areas within association operations. Based on this assessment and other

defined criteria, FCC Services will work with the association to develop an operations audit plan


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that provides a timely and appropriately, in-depth audit of internal operations. The audit universe

is appropriately defined by the association, but could include:

Board Operation

Internal Control Policy

Organization

Portfolio Management

Scorecard Lending Programs

Secondary Market Program

Loan Compliance

Participations

Leasing

Acquired Property

Credit Cards

Direct Note Payable

Financial Related Services

Investments

Payroll and Employee Benefits

Asset / Liability Management

Loan and Lease Accounting

Capital

Allowance for Loan Losses

Accounts Payable and Accrued

Liabilities

Accounts Receivable

Fixed Asset

IT Operations and Security

Data Integrity

Other Income and Expense

Business Continuity

3. Business process improvement for reengineering

Business process reengineering (BPR) is, in computer science and management, an

approach aiming at improvements by means of elevating efficiency and effectiveness of

the business process that exist within and across organizations. The key to BPR is for
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organizations to look at their business processes from a "clean slate" perspective and

determine how they can best construct these processes to improve how they conduct

business.

4.

5. Business Process Reengineering Cycle.

6. Business process reengineering is also known as BPR, Business Process Redesign,

Business Transformation, or Business Process Change Management. It is the radical

redesign of an organization's processes, especially its business processes. Rather than

organizing a firm into functional specialties (like production, accounting, marketing, etc.)

and considering the tasks that each function performs; complete processes from materials

acquisition, to production, to marketing and distribution should be considered. The firm

should be re-engineered into a series of processes.
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7. The main proponents of re-engineering were Michael Hammerand James A. Champy. In

a series of books including Reengineering the Corporation,Reengineering Management,

and The Agenda, they argue that far too much time is wasted passing-on tasks from one

department to another. They claim that it is far more efficient to appoint a team who are

responsible for all the tasks in the process. In The Agenda they extend the argument to

include suppliers, distributors, and other business partners.

8. Re-engineering is the basis for many recent developments in management. The cross-

functional team, for example, has become popular because of the desire to re-engineer

separate functional tasks into complete cross-functional processes. Also, many recent

management information systems developments aim to integrate a wide number of

business functions. Enterprise resource planning, supply chain management, knowledge

management systems, groupware and collaborative systems, Human Resource

Management Systems and customer relationship management systems all owe a debt to

re-engineering theory.

9. == Overview ==** Business process reengineering (BPR) began as a private sector

technique to help organizations fundamentally rethink how they do their work in order to

dramatically improve customer service, cut operational costs, and become world-class

competitors. A key stimulus for reengineering has been the continuing development and

deployment of sophisticated information systems and networks. Leading organizations

are becoming bolder in using this technology to support innovative business processes,

rather than refining current ways of doing work.[1]
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10.

11. Reengineering guidance and relationship of Mission and Work Processes to Information

Technology.

12. Business process reengineering is one approach for redesigning the way work is done to

better support the organization's mission and reduce costs. Reengineering starts with a

high-level assessment of the organization's mission, strategic goals, and customer needs.

Basic questions are asked, such as "Does our mission need to be redefined? Are our

strategic goals aligned with our mission? Who are our customers?" An organization may

find that it is operating on questionable assumptions, particularly in terms of the wants

and needs of its customers. Only after the organization rethinks what it should be doing,

does it go on to decide how best to do it.[1]

13. Within the framework of this basic assessment of mission and goals, reengineering

focuses on the organization's business processes--the steps and procedures that govern

how resources are used to createproducts and services that meet the needs of particular
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customers ormarkets. As a structured ordering of work steps across time and place, a

business process can be decomposed into specific activities, measured, modeled, and

improved. It can also be completely redesigned or eliminated altogether. Reengineering

identifies, analyzes, and redesigns an organization's core business processes with the aim

of achieving dramatic improvements in critical performance measures, such as cost,

quality, service, and speed.[1]

14. Reengineering recognizes that an organization's business processes are usually

fragmented into sub processes and tasks that are carried out by several specialized

functional areas within the organization. Often, no one is responsible for the overall

performance of the entire process. Reengineering maintains that optimizing the

performance of sub processes can result in some benefits, but cannot yield dramatic

improvements if the process itself is fundamentally inefficient and outmoded. For that

reason, reengineering focuses on redesigning the process as a whole in order to achieve

the greatest possible benefits to the organization and their customers. This drive for

realizing dramatic improvements by fundamentally rethinking how the organization's

work should be done distinguishes reengineering from process improvement efforts that

focus on functional or incremental improvement.

History

In 1990, Michael Hammer, a former professor of computer science at the Massachusetts Institute

of Technology (MIT), published an article in the Harvard Business Review, in which he claimed

that the major challenge for managers is to obliterate non-value adding work, rather than using

technology for automating it. This statement implicitly accused managers of having focused on
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the wrong issues, namely that technology in general, and more specifically information

technology, has been used primarily for automating existing processes rather than using it as an

enabler for making non-value adding work obsolete.

Hammer's claim was simple: Most of the work being done does not add any value for customers,

and this work should be removed, not accelerated through automation. Instead, companies

should reconsider their processes in order to maximize customer value, while minimizing the

consumption of resources required for delivering their product or service. A similar idea was

advocated by Thomas H. Davenport and J. Short in 1990, at that time a member of the Ernst &

Young research center, in a paper published in the Sloan Management Review the same year as

Hammer published his paper.

This idea, to unbiasedly review a companys business processes, was rapidly adopted by a huge

number of firms, which were striving for renewed competitiveness, which they had lost due to

the market entrance of foreign competitors, their inability to satisfy customer needs, and their

insufficient cost structure. Even well established management thinkers, such as Peter Drucker

and Tom Peters, were accepting and advocating BPR as a new tool for (re-)achieving success in

a dynamic world. During the following years, a fast growing number of publications, books as

well as journal articles, was dedicated to BPR, and many consulting firms embarked on this trend

and developed BPR methods. However, the critics were fast to claim that BPR was a way to

dehumanize the work place, increase managerial control, and to justify downsizing, i.e. major

reductions of the work force, and a rebirth ofTaylorism under a different label.

Despite this critique, reengineering was adopted at an accelerating pace and by 1993, as many as

65% of the Fortune 500 companies claimed to either have initiated reengineering efforts, or to
http://en.wikipedia.org/wiki/Thomas_H._Davenporthttp://en.wikipedia.org/wiki/Ernst_%26_Younghttp://en.wikipedia.org/wiki/Ernst_%26_Younghttp://en.wikipedia.org/wiki/Sloan_Management_Reviewhttp://en.wikipedia.org/wiki/Business_processhttp://en.wikipedia.org/wiki/Competitivenesshttp://en.wikipedia.org/wiki/Peter_Druckerhttp://en.wikipedia.org/wiki/Tom_Petershttp://en.wikipedia.org/wiki/Downsizinghttp://en.wikipedia.org/wiki/Taylorismhttp://en.wikipedia.org/wiki/Fortune_500http://en.wikipedia.org/wiki/Thomas_H._Davenporthttp://en.wikipedia.org/wiki/Ernst_%26_Younghttp://en.wikipedia.org/wiki/Ernst_%26_Younghttp://en.wikipedia.org/wiki/Sloan_Management_Reviewhttp://en.wikipedia.org/wiki/Business_processhttp://en.wikipedia.org/wiki/Competitivenesshttp://en.wikipedia.org/wiki/Peter_Druckerhttp://en.wikipedia.org/wiki/Tom_Petershttp://en.wikipedia.org/wiki/Downsizinghttp://en.wikipedia.org/wiki/Taylorismhttp://en.wikipedia.org/wiki/Fortune_500


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have plans to do so. This trend was fueled by the fast adoption of BPR by the consulting

industry, but also by the study Made in America, conducted by MIT, that showed how companies

in many US industries had lagged behind their foreign counterparts in terms of competitiveness,

time-to-market and productivity.

Development after 1995

With the publication of critiques in 1995 and 1996 by some of the early BPR proponents,

coupled with abuses and misuses of the concept by others, the reengineering fervor in the U.S.

began to wane. Since then, considering business processes as a starting point for business

analysis and redesign has become a widely accepted approach and is a standard part of the

change methodology portfolio, but is typically performed in a less radical way as originally

proposed.

More recently, the concept ofBusiness Process Management (BPM) has gained major attention

in the corporate world and can be considered as a successor to the BPR wave of the 1990s, as it

is evenly driven by a striving for process efficiency supported by information technology.

Equivalently to the critique brought forward against BPR, BPM is now accused of focusing on

technology and disregarding the people aspects of change.

Business process reengineering topics

Definition

Different definitions can be found. This section contains the definition provided in notable

publications in the field:
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"... the fundamental rethinking and radical redesign of business processes to achieve

dramatic improvements in critical contemporary measures of performance, such as cost,

quality, service, and speed."[5]

"encompasses the envisioning of new work strategies, the actual process design activity,

and the implementation of the change in all its complex technological, human, and

organizational dimensions."[6]

Additionally, Davenport (ibid.) points out the major difference between BPR and other

approaches to organization development (OD), especially the continuous improvement or TQM

movement, when he states: "Today firms must seek not fractional, but multiplicative levels of

improvement 10x rather than 10%." Finally, Johansson[7] provide a description of BPR relative

to other process-oriented views, such as Total Quality Management (TQM) and Just-in-time

(JIT), and state:

"Business Process Reengineering, although a close relative, seeks radical rather than

merely continuous improvement. It escalates the efforts of JIT and TQM to make process

orientation a strategic tool and a core competence of the organization. BPR concentrates

on core business processes, and uses the specific techniques within the JIT and TQM

toolboxes as enablers, while broadening the process vision."

In order to achieve the major improvements BPR is seeking for, the change of structural

organizational variables, and other ways of managing and performing work is often considered

as being insufficient. For being able to reap the achievable benefits fully, the use of information

technology (IT) is conceived as a major contributing factor. While IT traditionally has been used

for supporting the existing business functions, i.e. it was used for increasing organizational
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efficiency, it now plays a role as enabler of new organizational forms, and patterns of

collaboration within and between organizations.

BPR derives its existence from different disciplines, and four major areas can be identified as

being subjected to change in BPR - organization, technology, strategy, and people - where a

process view is used as common framework for considering these dimensions. The approach can

be graphically depicted by a modification of "Leavitts diamond".[8]

Business strategy is the primary driver of BPR initiatives and the other dimensions are governed

by strategy's encompassing role. The organization dimension reflects the structural elements of

the company, such as hierarchical levels, the composition of organizational units, and the

distribution of work between them. Technology is concerned with the use of computer systems

and other forms ofcommunication technology in the business. In BPR, information technology

is generally considered as playing a role as enabler of new forms of organizing and collaborating,

rather than supporting existing business functions. The people / human resources dimension

deals with aspects such as education, training, motivation and reward systems. The concept of

business processes - interrelated activities aiming at creating a value added output to a customer -

is the basic underlying idea of BPR. These processes are characterized by a number of attributes:

Process ownership, customer focus, value adding, and cross-functionality.

The role of information technology

Information technology (IT) has historically played an important role in the reengineering

concept. It is considered by some as a major enabler for new forms of working and collaborating

within an organization and across organizational borders.
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Early BPR literature identified several so called disruptive technologies that were supposed to

challenge traditional wisdom about how work should be performed.

Shared databases, making information available at many places

Expert systems, allowing generalists to perform specialist tasks

Telecommunication networks, allowing organizations to be centralized and decentralized

at the same time

Decision-support tools, allowing decision-making to be a part of everybody's job

Wireless data communication andportable computers, allowing field personnel to work

office independent

Interactive videodisk, to get in immediate contact with potential buyers

Automatic identification and tracking, allowing things to tell where they are, instead of

requiring to be found

High performance computing, allowing on-the-fly planning and revisioning

In the mid 1990s, especially workflow management systems were considered as a significant

contributor to improved process efficiency. Also ERP (Enterprise Resource Planning) vendors,

such as SAP, JD Edwards, Oracle, PeopleSoft, positioned their solutions as vehicles for business

process redesign and improvement.

Methodology

Although the labels and steps differ slightly, the early methodologies that were rooted in IT-

centric BPR solutions share many of the same basic principles and elements. The following
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outline is one such model, based on the PRLC (Process Reengineering Life Cycle) approach

developed by Guha.

Simplified schematic outline of using a business process approach, examplified for

pharmaceutical R&D:

1. Structural organization with functional units

2. Introduction of New Product Development as cross-functional process

3. Re-structuring and streamlining activities, removal of non-value adding tasks

1. Envision new processes

1. Secure management support
http://en.wikipedia.org/wiki/File:Bpr1.png


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2. Identify reengineering opportunities

3. Identify enabling technologies

4. Align with corporate strategy

2. Initiating change

1. Set up reengineering team

2. Outline performance goals

3. Process diagnosis

1. Describe existing processes

2. Uncover pathologies in existing processes

4. Process redesign

1. Develop alternative process scenarios

2. Develop new process design

3. Design HR architecture

4. Select IT platform

5. Develop overallblueprint and gather feedback

5. Reconstruction

1. Develop/install IT solution

2. Establish process changes

6. Process monitoring

1. Performance measurement, including time, quality, cost, IT performance

2. Link to continuous improvement
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Benefiting from lessons learned from the early adopters, some BPR practitioners advocated a

change in emphasis to a customer-centric, as opposed to an IT-centric, methodology. One such

methodology, that also incorporated a Risk and Impact Assessment to account for the impact that

BPR can have on jobs and operations, was described by Lon Roberts (1994). Roberts also

stressed the use of change management tools to proactively address resistance to changea

factor linked to the demise of many reengineering initiatives that looked good on the drawing

board.

Some items to use on a process analysis checklist are: Reduce handoffs, Centralize data, Reduce

delays, free resources faster, Combine similar activities. Also within the management consulting

industry, a significant number of methodological approaches have been developed.


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References:

http://en.wikipedia.org/wiki/Business_process_reengineering June 19, 2009

http://en.wikipedia.org/wiki/Management_consultancy June 19, 2009

http://www.ca.courses-careers.com/management.htm June 19, 2009

http://en.wikipedia.org/wiki/Information_systems June 19, 2009

http://dictionary.bnet.com/definition/operations+audit.htmlJune 19, 2009

http://www.ecu.edu/cs-admin/audit/Engagement.cfm June 20, 2009

http://www.imcusa.org/?page=ETHICSCODEJune 24, 2009
http://en.wikipedia.org/wiki/Business_process_reengineering%20June%2019http://en.wikipedia.org/wiki/Management_consultancyhttp://www.ca.courses-careers.com/management.htmhttp://en.wikipedia.org/wiki/Information_systemshttp://dictionary.bnet.com/definition/operations+audit.htmlhttp://www.ecu.edu/cs-admin/audit/Engagement.cfmhttp://www.imcusa.org/?page=ETHICSCODEhttp://en.wikipedia.org/wiki/Business_process_reengineering%20June%2019http://en.wikipedia.org/wiki/Management_consultancyhttp://www.ca.courses-careers.com/management.htmhttp://en.wikipedia.org/wiki/Information_systemshttp://dictionary.bnet.com/definition/operations+audit.htmlhttp://www.ecu.edu/cs-admin/audit/Engagement.cfmhttp://www.imcusa.org/?page=ETHICSCODE

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