Faculty of Business and Law

MPM 701 –Business Process Management
Trimester 3， 2010

Group Assignment
Tim’s Dynometers Pty Ltd

Jing Jing Wu 25% 212383709
Xu bi 25% 212382669
Lantian Zhang 25% 900392452
Yang Zhou 25% 212338171

UNIT: MPM701
LECTURER: Mike Bengough
DUE DATE: 11/01/2013
WORD COUNT: 1936

Table of Contents

1. BPM and Strategy……………………………………….……….…..………. 3

2. Problem Analysis.........……………………………….……….………………5

3. Proposed Solution ……..…………………..…………………………………..8

4. Solution Considerations.................................................................….……......11

5. Recommendations.………...........................................................…..……..….13

Reference List………...…………………………………………………….……14

List of Figures and Tables

Figure 1: Gap model…………………...................................................................5

Figure 2: ‘As Is’ process diagram………………..................................................6

Figure 3: Project Scoping Diagram........................................................................7

Figure 4: ‘To-Be’ Processes Flow Diagram...........................................................9

Executive Summary

The assignment aims to investigate the causes for the business process problem in Tim’s Dynometers Pty Ltd, with recommendations for the managers of ‘Tim’s Dynometers’ to diminish the management impacts of this phenomenon. Various information and academic interpretations have been drawn on. Business process management (BPM) is a method focused on regulating the functional departments to the overall company objective. ‘Tim’s Dynometers’ has several process-flow issues: inefficient communication, backward working method and less awareness of team work in Tim’s Dynometers Pty Ltd, and the most urgent problem is no enterprise resources system. All these problems have negative influence on company reputation, caused customer complaints and lost its market. The body of this report gives a strategic analysis to Tim’s Dynometers Pty Ltd from four major parts: BPM and Strategy, Problem Analysis, Proposed Solution and Solution Considerations. It is concluded that the situation of Tim’s Dynometers Pty Ltd should be changed in urgent needs. Recommendations are provided as follows: adopting ERP system, enhancing education among employees, establishing IT department, purchasing advanced facilities.

1.0 BPM and Strategy

As the science and technology has been developed rapidly recently, companies around the world are under drastic pressure in the global competition. In order to keep the competitive advantage of the business in the globalized environment, advanced management models should be brought in to replace those that are obsolete. Therefore, business process management plays a critical role in business’s performances as it helps businesses to maximize profit by efficiently collaborating functional departments.

Tim’s Dynometers Pty Ltd is a medium-scale manufacture company, which produces a hand-held pulse rates controller. The company had very strong growth at beginning stage and it lasted for a few years. However, sales and profits have been shrunk down these years. Tim did not contribute his time on the development of the business processes and pay attention to the delays which customers are usually not satisfied with. For the sake of improving the competiveness of the business, it becomes the necessity for Tim’s Dynometers Pty Ltd to apply Business Process Management (BPM) approaches to adjust its internal processes to be more efficient and effective. In order to turn the business to be good, in this case, Tim’s Dynometers is instructed by some methods to make sure the business can be back on its own track.

Business process management is to achieve company goals and objectives and to improve management via critical business processes. It is not a particular technology but an approach to provide management solutions for better business running by applying business strategies. (Rainer, R, Turban, E & Potter, R, 2007). BPM has been applied immensely in organizations and business information system these days. (Brocke, J & Rosemann, M, 2009) Moreover, BPM provides solutions for customer satisfaction, and offer cost control to the business from a business administration perspective. (Weske, M, 2012) It also helps the company to focus on aiming at a higher return on investment. Therefore, BPM can make the company more efficient and effective when dealing with customers and improve customer satisfaction.

BPM is an essential approach to the organization of business activities and to the improvement of knowing the interrelationships. In addition, BPM provides approaches and solutions to the cost control of the business by casting Cost Management scenarios. (Schiff, C, 2007) It also facilitates the achievements of organization’s internal goals and by assisting its entire department it can develop the value chain. The whole company will be improved by diminishing its operating cost through the new company system.

2.0 Problem Analysis

After taking an overlook of Tim’s company, some problems can be seen from the whole process of the Dynometer’s sale. Firstly, backward working methods like paper based manual record and communication is inefficient and time consuming which is the main reason of time delay and customer complaints.

Figure 1: The Gap Model, As-Is process and To-Be process

Secondly, tensions between employees lead to less awareness of team working, also the leader Tim made less effort in the relationship between workers. Thirdly，solid marketing strategy made by Tim without meeting the new need of customers has a negative influence on enhancing the marketing competition. Finally, customer complaints and products quality problems cannot be solved well without an after-sale service department.

In Above all, the most urgent event is to establish an enterprise resource system (ERP) to improve daily communication and reduce transaction cycle.

Figure 2: ‘As-Is’ Process Diagram

According to ‘As-Is’ Process Diagram, the whole transaction cycle will take about two weeks if Dynometer is in stock and more than 6 weeks if Dynometer is out of stock. The customers complained the time delay when suitable products are out of stock. This problem is caused by long period of replenishment. The company creates a purchase request in a few days and sends them to suppliers through surface mail in 4 weeks. It is unreasonable to spend so long time on the supply chain. Long waiting will show the low efficiency of company and reduce the customer loyalty and company reputation. The products easily lose its marketing share if competitors have access to a more effective supply chain and provide better service.

What’s worse, only 15 computers and 2 printers are available in the company, the enterprise database keep very limited information of products and employees and paper based manual methods without company intranet and streamlined and computer based business process make employees very hard to get information from other departments effectively. For example, all order and purchase form and invoice are transferred manually and put on the desk of the accountant; loss and mistake of the record cannot be avoided during such a complicated process. The problems mentioned above extend the whole transaction cycle and reduce the profit.

From the “Project Scoping Diagram” below, all of problems have been described by dividing them into four aspects (input, output, control and enablers.)

Figure 3: Project Scoping Diagram

3.0 Proposed solution

In Tim`s Dynometers Pty Ltd, it is necessary to establish a new business process architecture which is illustrate that ‘a body of knowledge about the business process that comprises a value chain’ (Harmon, 2007). This process is seen as a hierarchical decomposition process that formed the value chain. It is also a key approach to connect the organization's strategic, process goals, and specific management objectives. In addition, based on the priority of the workflow can be obtained by using the BPM. The most crucially, by using the BPM, it is convenient for cooperation between business managers and IT managers, furthermore, it can create an enterprise software which is constructed for software development efforts, however, current BPM in Tim`s company can not solve these problems.

Figure 4: ‘To-Be’ Process Flow Diagram

As can be seen in the figure, Firstly, the need of pre-market survey is necessary for the company to improve the performance. From the transcript of Tim`s meeting with his directors, it shows that time delay is due to lack of preparation and poor adaptability. For the long-term development, it is more important to do marketing research than introduction of new products, this is mainly because marketing research can give feedbacks to the company which can help the company to adjust their strategies. Particularly for the orders of materials, it is a clear view for the company which materials needed mostly before establish of formal product design and the market survey. Therefore, buying the right materials before which can avoid the employee and the customer's complaints, and it can save a lot of time and solve a series of problems which caused by the delay.

However, the Tim`s company could introduce the Enterprise Resource Planning (ERP) system, which is an integrated business management standards, information technology and concrete business goals, to management process flow to improve production efficiency, speed and performance (Tech-FAQ, 2011). This is mainly because the process of the ERP system control and manage staff automatically by a computer, and it can reduce errors and eliminating waste (Appian, 2012). ERP system is connected to the real-time data and transaction data. Therefore, the department can take actions immediately, and the relevant departments or customers can be served based on the information that comes from the system. For example, After customer purchases by fax or e-mail, the sales orders sent to the company's sales department, then the sales department transferred this orders to sales orders, and input to the EAP system, including input customer details and order data. Different order routing has different priority, the highest priority customer`s orders can get department's attention immediately. When the production department receives the sales order, they would check the inventory database in ERP system. If there were not stock, the production department would transfer orders to the purchasing department immediately. If there is stock, the production department would confirm the order and update the sale order to official order. After confirm the sale order, the workers need to send the goods to the logistics department. At the same time, the accounting department will check official sales order and record accounts as debit. So it is request the customers to pay in advance when the product was shipping. In additional, it is suggest that consumers should provide constructive feedback to the New Product Development strategies. It is extremely important to get product requirements, it can be used as data back to the system and it can directly reflect a much clearer view of market needs. Therefore, the company could save time in the process of order and purchase materials and correct amount of inventory.

Furthermore, the most important thing is to elect a respected and powerful leader of the company departments, and a lot of training programs should be provided to the employees after built a new management system.

4.0 Solution Consideration

While adopting BPM approach and implementing the proposed solution, Tim’s Dynometers need to pay attention to several factors that may contribute to BPM failure.

One of the major issues is that it is essential to address the teamwork throughout the whole process of BPM, not only by the top management, it also need all team members’ understanding and cooperation. Sometimes the lack of support from top management makes the whole process run inefficiently. Because BPM project will change the structure and the way top management run Tim’s company, according to Bandara et al (2007), employees sometimes feel not secure about these changes, especially for top management. Their fear to new BPM software may make them consider the redesign of company will weaken their power, even cause job losing. Again, these sort of unsure about BPM project and refuse to co-operate with each other will take Tim’s Dynometers more time and resources to enable the ERP system and the whole project.

Another essential consideration for Tim should be the training on old employees and new skilled-team member hiring. At the beginning of BPM project, manual transference of data could increase chance of data flaws occur. However, some organisations ignore the importance of old employee training, as a result, many combined issues such as system database inaccuracy could damage BPM project significantly. On the other hand, some potential attack from network and other competitors require IT background worker’s support. Therefore, skilled employees could minimise these risks, and an IT department could provide technical support and monitoring the system to ensure it working properly.

Although Tim’s business efficiency could increase dramatically by adopting BPM and ERP system, it can also cost large amounts of time and money to implement. For example, hiring employees, purchasing new software, cost of equipment and communications (Allen, 2007). According to Allen (2007), Tim needs to ensure that business management cost fewer expanses and time than the revenues in efficiency. As a result, it will help to maximise business efficiencies in a long run.

5.0 Recommendations

1. Adopting ERP system to conduct a comprehensive network management, in order to provide customers efficient and reliable services. 2. Enhancing the education of EPRS skills among all level employees, so that all workers would be aware of the new technology. 3. Establishing an IT department to provide technical support throughout the whole system，monitor system performance and secure network safety. 4. Strengthening the importance of co-operation among all level employees and avoid conflicts. 5. Introducing customers the online trading system to become more competitive. 6. Purchasing advanced facilities to enhance internal communication and to help employees’ efficiency. 7. Using market survey to learn customers’ requirements. 8. Improving the relationship with suppliers, in order to shorter delivery time and cut costs, so that customer satisfaction will increase. 9. Using awards to encourage customers to pay their debt, eg. giving discount to customers who never default on payments.

Reference list

Allen, D 2007, 'Cost/Benefit Analysis for Implementing ECM, BPM Systems', Information Management Journal, vol. 41, no. 3, pp. 34-41, EBSCOhost, viewed 24 December 2012.

Appian 2012, Benefits of BPM, Appian, retrieved 29 December 2012, .

Bandara, W, Indulska, M, Sadiq, S, Chong, S, Rosemann, M & Green, P n.d. 2007, Major Issues In Business Process Management: An Expert Perspective, The University of Queensland, retrieved 30 December 2012.

Brocke, J & Rosemann, M 2009, Handbook on Business Process Management: introduction, methods and information systems, retrieved 30 December 2012.

Rainer, R, Turban, E & Potter, R, C 2007, ‘Introduction to information systems’, retrieved 3 January 2013.

Scriff, C, A 2007, ‘maximize business performance’, pp. 30 - 31, retrieved 6 January 2013.

Tech-FAQ, 2011, ERP, retrieved 27 December 2012
.

Weske. M, C 2012, ‘Business process managemen: concepts, languages, architectures’, 2nd Edition, p. 3, retrieved 27 December 2012.