BUSINESS PROCESSES AND TECHNOLOGY

Businesses depend on their critical business processes. A
business process
is
a set of interrelated activities that are performed to process specific work in the
business. Payroll, marketing, warehousing, and accounting are all business
processes. Organizations make or lose money depending on their processes.
This was recognized in ancient Rome where military and civil work was
systematically reduced to formal procedures. Business processes were created
and expanded throughout the Renaissance and during the Industrial Age, with
the railroads and modern logistics. Industrial engineering and “efficiency
experts” addressed steps in business processes in excruciating detail (e.g., hand
movements in performing work). From the 1950s to the 1970s, business
was preoccupied with expansion and other activities, and viewed computers
and technology as support to business processes. The clumsy technology
could in no way restructure the business process; it could only replace some
steps.
This changed with online systems in the 1980s. Transaction-based systems
changed the way people did their work. From administrative online systems to
automated teller machines (ATMs) to voice response systems, business
processes changed with the technology. The trend has continued with client-
server and intranet /Internet systems. Currently, most critical business processes
in a company are tightly connected to systems. In addition, it is hard to think of
systems that do not support business processes. Yet, where do things go wrong?
It is a matter of degree. If you spend money, time, and resources on critical
business processes, then you will be more successful. However, if resources are
drained to support minor maintenance and enhancement changes that have little
or no strategic impact, both money and time are wasted. The promise of technol-
ogy goes unmet.
Another major theme is that business processes such as technology evolve. As
time goes by, new situations arise. If the current process cannot handle them,
then people may create new, little business processes on the side. These are
called
shadow systems.
They may be procedures or PC systems that are not part
of the formal process. Shadow systems act to undermine the integrity of the
process. The situation worsens when there is turnover of business staff and the
new staff is not properly trained in the new process. New employees are told to
take their past experience and knowledge and just plunge in. And you wonder
why processes can deteriorate? A good combination of technology and process
reinforce each other and stave off, or at least delay, decay and rot.
Failure can occur if a firm adopts new technology too soon. An example is a
retail firm that adopted their own coding system for their merchandise, prior to
the development of bar coding. When bar coding became popular, the firm had
to use both the internal code and the bar code. The systems complexity over-
whelmed the business process, and inventory controls collapsed. Some stores
had excessive merchandise; others had severe shortages of the same goods.
However, if you adopt technology too late, you can lose in competition. Timing
is essential.