IS 788
[Process] Change Management
 Wednesday, September 2
 Reminder: Pac Bell has been moved
to Wednesday, 9/9
 Lecture: Strategy and process
architecture (1 of 2)
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Alignment
 Alignment with organizational goals
and strategies is a top priority for
process and IT development
 Exceptionally difficult to achieve
 Turf wars (local optimization, global suboptimization)
 IT (and process architects) at too low an
organizational level
 Lack of clearly stated goals and
strategies! (UNR as example)
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Alignment begins with a clearly
defined strategy
 Strategy: how a company will
compete, what its goals are and what
policies will support those goals
 Formal strategies (SWOT analyses)
vs. informal strategies (a calibrated
gut)
 Porter’s strategy analysis:
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Three phase process
 Determine the current position of the
company
 Determine what is happening in the
environment
 Strategize to get from where you are to
where you want to be given the current and
anticipated environment
 Some analysts believe formal strategies are
too confining for the fast pace of the 2nd
millennium
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Environmental analysis (Porter)
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Seeking “sustainable strategic
advantage”
 Barriers to entry:
 Large capital investment
 Established branding in a market
segment
 Proprietary product/process
 Process, people and technology smoothly
and tightly integrated (v. difficult to
imitate!)
 This is similar to what Porter calls ‘fit’
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Value Propositions
 Abstractions (generalized views) of
what your organization does and sells
 Examples:
 Bookstore  entertainment and or
information provider
 Taco Bell  warming and serving food
(NOT a restaurant, NOT food
preparation)
 (hair) Salons  ‘experience providers’
ala ‘the experience economy’
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Value Propositions – help you
understand the need you are satisfying
– and focus efforts
 Competitive strategies:
 Cost leadership – dangerous – can lead to
‘hypercompetition’ and commoditization;
Dell, for example, eventually squeezed the
profit out of desktops even for itself!
 Harmon, p.44 discusses Porters negative view of
excessive stress on operational effectiveness
 Differentiation
 Niche markets (extreme differentiation)
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Automotive product positioning
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From strategy back to process
 Focusing on value chains and value
propositions helps to distinguish between
value adding activities and non-value
adding activities
 Work processes can then be refined so that
most organizational effort is directed to
core process: what the organization does
best and uniquely to provide value to
customers
 Non core processes can be selectively
outsourced
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Competitive advantage
 When your company can make more profit
in a market than competitors
 This requires good strategic position
arrived at via strategic analysis which is
backed by difficult to replicate ‘fit’
 Fit (again): when process activities are
tightly integrated with each other and
underlying technology
 Good fit overall is superior to any single
exceptionally efficient process
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So, how does alignment happen?
 IF it happens, it is because it is given
high visibility and resources within
the organization
 Frequently, successful organizations
have formal business process
architectures (how processes fit
together to achieve organizational
goals) overseen by formal
committees of high level executives
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The alignment cycle
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Mapping Strategies to Goals
 It should be possible to map
strategies to organizational goals
 When this mapping is graphically
rendered it becomes a powerful tool
for communicating with all levels of
the organization and identifying new
processes or process
change/improvement/ candidates
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Strategic Activity Map
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Maximize effectiveness
 Almost any process can be made
more efficient, but most are not
strategic
 Most businesses evolve too rapidly to
permit formal analysis and
documentation of all processes
 Determine the processes linked most
closely to strategic goals – these are
prime targets for redesign
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Multiple core value processes for a
bank
Management
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Each process redesign requires a
team from multiple functional areas
 To optimize organizational objectives
a high-level steering committee is
invaluable
 Recall “Failed ERP” – decentralized
structure with no high level guidance
 Managing multi-department teams is
a challenge in itself – discuss matrix
organizations – Lecture2.2, ppt #10
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Industry Standard Process
Architecures
 The text overviews the
Telecommunications Business Process
Framework (eTOM) in Ch. 4
 For 788 this is notable primarily as a
market (telecom) initiative which may
lead to standardized (commoditized)
processes – anticipating the
Davenport HBR paper
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The process hierarchy
 To some degree the definition of process,
subprocess and activity is arbitrary.
 A Value Chain is typically the largest
process class in an organization, ranging by
definition across multiple functional areas
 A process is a logically distinguishable
sub-portion of a value chain. Some authors
call these ‘tasks’
 An ‘activity’ is wherever you choose to
stop modeling lower levels ;-)
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The process hierarchy
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Deciding what type of change effort
is called for
 Process change types:
 Design – new product or service
 Redesign – a major effort for significant
improvement
 Automation – a largely manual process is
redesigned for IT assistance
 Improvement – incremental refinement of
process for small percentage improvement
 A change in the management of a process rather
than the process
 Outsourcing – following a non-core
determination
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A process / strategy matrix
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Putting it all together




Determine strategy
Goals to implement the strategy
Process changes to achieve goals
Prioritize and begin modeling and reengineering
 With detailed sub-steps added it looks
like this:
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Additional Alignment Tools
 Balanced Scorecard (BS) – for overall
organizational measurement
 Steers (accounting oriented) managers away
from strict financial measurement
 Financial measures +
 Customer measures +
 Process measures (internal business) +
 KM measures (innovation and org. learning)
 Harmon points out that there is NO sense of a
value chain and thus BS best supports a
functional organization rather than a process
org.
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Balanced Scorecard
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Organizational Positioning
 Basically YASDM – yet another
strategy determination method
 But, a nice ‘lens’ for viewing the
organization that yields some good
insights
 You can map either your processes or
your goals to this concept
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Organizational Positioning
Based on the notion of
three distinct customer types:
1. Operational (cost) focus
2. Service focus
3. High performance products
cf. Moore’s diffusion
of innovation theory:
innovators, early
adopters, middle
majority, laggards.
Position your company to
best serve your dominant
customer type.
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