Process Analysis
Introduction
Introduction
Coordination
Dependencies
Decomposition
Mapping
Representation
Specialization
Innovation
Summary
Process analysis overview
Introductory notes
Process Analysis
Introduction
Introduction
Coordination
Dependencies
Decomposition
Mapping
Representation
Specialization
Innovation
Summary
IT and coordination
• Information Technology & coordination costs
– Coordination = managing dependencies among activities*
– Falling cost of computing power = lower coordination costs?
– Well-designed information systems can decrease the cost of
organizational coordination
– Business strategies that exploit lower coordination costs can
gain competitive advantage
– Examples:
Federal Express
American Airlines
Schwab OneSource
Flew all packages to Memphis hub no matter what their
destination, providing next-day delivery.
Makes more money on computerized reservation system that it
does on flying aircraft.
Makes a market in mutual funds that had been sold through
proprietary channels, reducing the profitability of established fund
companies.
*Thomas W. Malone et. al. (1997) Tools for inventing organizations: Toward a handbook of organizational processes, Center for
Coordination Science, Massachusetts Institute of Technology, http://ccs.mit.edu/21c/mgtsci/
Process Analysis
Introduction
Introduction
Coordination
Dependencies
Decomposition
Mapping
Representation
Specialization
Innovation
Summary
A perspective on coordination
• What is coordination?
– A business can be described as a series of steps that repeat
over and over … i.e., a process
– Some steps produce a product or service
– The remainder coordinate production
• Simplified, coordination:
– delivers the right thing
– at the right time
– to the right place
• …and is another way of talking about management
Process Analysis
Introduction
Introduction
Coordination
Dependencies
Decomposition
Mapping
Representation
Specialization
Innovation
Summary
Coordination = managing dependencies among activities
Coordination
Term
Explanation
Deliver the right thing
Usability
Make sure that the product or service is
“usable” (i.e., what the customer wants,
profitable for the company, legal,
within regulatory guidelines etc.)
At the right time
Prerequisites
or
Sequencing
Make sure that the product or service is
produced or created in the appropriate
order -- so that things which must come
before others occur reliably in
sequence.
To the right place
Accessibility
or
Transfer
Make sure that the product or service is
delivered to where it is needed. Note
that the prerequisite/sequencing idea
focuses on delivery at the right time.
These characteristics describe how one activity in a business process depends on others
that occur around it.
You will hear us refer to these as dependencies between process activities.
Process Analysis
Introduction
An example: Federal Express
Introduction
Coordination
Dependencies
Decompos’n
Mapping
Representation
Specialization
Innovation
Summary
Federal Express
Transport
package
Collect
package
Receive
delivery
information
Receive
package
How
Move
package
Move to
truck
Load on
plane
Fly to
Memphis
Deliver
package
Move to
truck
Drive to
destination
Deliver
package
Why
• We will call this kind of process map an
activity decomposition
• It works top-down and bottom-up
– Moving downward describes how a piece of business is done.
– Moving upward describes the goals of the process.
Process Analysis
Introduction
Introduction
Coordination
Dependencies
Decomposition
Mapping
Representation
Specialization
Innovation
Summary
Mapping a process
In your projects, you may be able to develop a top-down business description.
It is more likely, however, that you will have to work from the bottom up, or in both
directions at once.
In practice, such “mid-level” analysis can help you redefine what you believe to be the
strategic goals of the business.
Federal Express
Transport
package
Collect
package
Receive
delivery
information
Receive
package
Move
package
Move to
truck
Load on
plane
Fly to
Memphis
Deliver
package
Move to
truck
Drive to
destination
Deliver
package
In this course, be prepared to develop multiple drafts of your process maps, and to use
them as a table of contents for summarizing your analysis.
This means much more than just drawing a map.
Process Analysis
Introduction
Introduction
Coordination
Dependencies
Decomposition
Mapping
Representat’n
Specialization
Innovation
Summary
Representing a Process
If you use your process map intelligently, a small number of symbols can carry a great
deal of information.
They can become the basis of a fairly sophisticated analysis that explicitly considers
• the parts of a process
• its major variations
• its most important coordination characteristics
Federal Express
Transport
package
Collect
package
Receive
delivery
information
Receive
package
Move
package
Move to
truck
Load on
plane
Fly to
Memphis
Deliver
package
Move to
truck
Drive to
destination
Deliver
package
You can use this analysis to assist in designing, prototyping and demonstrating the
information systems that would improve the performance of the business.
Your course project is intended to give you an opportunity for gaining first-hand
experience with such a prototype. It is, in essence, an exercise in business design.
Process Analysis
Introduction
Introduction
Coordination
Dependencies
Decomposition
Mapping
Representation
Specialization
Innovation
Summary
Analyzing a Process - Specializations
The idea of process specializations assists in understanding major variations that exist
within a business
For example, consider the different ways in which people may want to submit FedEx
packages
• some customers may wish to go to a FedEx office
• others may wish they didn’t have to
Federal Express
Transport
package
Collect
package
Receive
delivery
information
Receive
package
Input barcode
Collect how?
Move
package
Use FedEx
Ship
Move to
truck
Input
delivery
data
Glance at
insert
Use FedEx Ship
Deliver
package
Move to
truck
Collect at
FedEx office
Check
delivery
data
Collect at FedEx office
Move to
truck
Process Analysis
Introduction
Introduction
Coordination
Dependencies
Decomposition
Mapping
Representation
Specialization
Innovation
Summary
Process innovation - Dependency analysis
You can use the idea of dependencies to focus on potential business innovations.
For example, consider different ways to
• manage usability
• manage prerequisites or sequencing
• manage (information) accessibility
Federal Express
Transport
package
Collect
package
Receive
delivery
information
Trade-off matrix
Receive
package
Collect at FedEx office
Collect how?
Move
package
Use FedEx Ship
Deliver
package
Move to
truck
Usability
Prerequisites
Accessibility
Collect at
FedEx office
Customer can talk directly to a
skilled shipping agent. Agent can
correct shipping information
immediately.
Shipping agent enforces proper
sequencing. No packages shipped
without adequate information.
Customer must call FedEx to track
package. FedEx maintains 800
numbers and phone banks to
support package tracking.
Use FedEx Ship
Customer enters shipping data
directly into central FedEx
computers.
Validation routines in the input
software ensure that adequate
information is provided.
Customer can track any package
at any time from any PC on the
Web using FedEx’s computers.
Process Analysis
Introduction
Introduction
Coordination
Dependencies
Decomposition
Mapping
Representation
Specialization
Innovation
Summary
Summary
• Process analysis in this course takes a
coordination perspective.
• Information systems may assist in reducing
coordination costs.
• Doing so effectively depends upon business
and system design.
• We will learn techniques for describing and
prototyping information systems that support
new business designs.
• The course project will give you hands-on
experience in developing such a prototype.