ITBV:

BPA Framework

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Information Technology Business Value (ITBV) Business Process Analysis (BPA) Framework Second Edition
Prepared for COMM 190, Queens School of Business By Dr. Kathryn Brohman and Dr. Sandy Staples July 2010
This framework provides the conceptual explanation and approach for completing business process analysis. The framework is a modification of John Mendoncas framework published in the Journal of Information Technology Education (Volume 2) in 2003. The framework maps to the Business (Process) Analysis learning outcome (a component of the Processes, Projects, and Change) for Business Technology Management (BTM) certification offered by the Canadian Coalition for Tomorrows ICT Skills1. The paper also includes a sample application of the ITBV BPA framework for a fictitious organization: ProRetail. The objective of the sample application is to provide a detailed explanation of how the ITBV: BPA Framework is applied in an organization. The sample application maps to the Integrative Learning outcome2 for Business Technology Management (BTM) certification offered by the Canadian Coalition for Tomorrows ICT skills.

http://wiki.ccict.ca/

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Table of Contents
Introduction to Business Process Analysis................................................................................................... 3 Business Process Analysis: Three Key Components..................................................................................... 4 Documenting the As-Is Process ............................................................................................................ 4 Designing the To-Be Process ................................................................................................................ 4 Implementing the To-Be Process ......................................................................................................... 4 ITBV Process Analysis Framework ............................................................................................................... 5 Step #1: Creation of As-Is Process Map ................................................................................................. 5 Step #2: Case analysis - Identification of Problem(s) and Problem Sources............................................ 5 Step #3: Design the To Be Sub-Process.................................................................................................. 5 Step 4: Describe the Value of the Redesign Opportunity ........................................................................ 7 Step #5: Enabling the Process with an Information System .................................................................... 7 Step #6: Implementing the Redesign....................................................................................................... 8 Appendix A: Instructions for Creating an As-Is Cross Functional Map..................................................... 10 Appendix B: Summary of Hardware, Software, and Data Components .................................................... 11 ProRetail: Business Process Analysis (BPA) Case ....................................................................................... 13 ProRetail: Business Process Analysis (BPA) Sample Case Solution ............................................................ 17

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Introduction to Business Process Analysis

Information systems affect all functions of the modern organization. Many organizations have generated significant competitive advantages (i.e., cost reduction, product/service differentiation, creation of relationships) by altering their business processes using information systems. The Information Technology Business Value (ITBV) framework was first introduced in 2003 by John Mendonca of Purdue University for teaching the discovery of value as applied to common information technology-enabled organizational processes. In 2009, Professor Kathryn Brohman and Professor Sandy Staples modified the ITBV framework based on collaborations with the Canadian Coalition for Tomorrows Information and Communication Technology skills (CCTICT). Initiated by Bell Canada in 2007, the CCTICT is a prominent group of Canadian organizations that are working to address a growing and increasingly serious shortage of IT professionals in Canada. "If left uncontested, the IT skills gap will create gaps in our economic performance, gaps in our productivity, and gaps in our ability to compete globally. It is in everyone's interest to close those gaps as quickly as possible," said Stphane Boisvert, President, Bell Enterprise Group and official spokesperson for the coalition. As a critical component of their initiative, the CCTICT is working with universities, colleges, and high schools to enhance educational programs that will help secure the future of Canada's IT workforce. One of the key learning objectives defined by the CCTICT is to demonstrate an appropriate level of competence in b usiness process analysis. COMM 190 is one of the very few required courses in the Queens Commerce program that provides students with knowledge and application of the key components of business process analysis. Business process analysis is a tool used by all organizations to alter existing business processes in an attempt to generate business value. Major consulting companies including Bell Canada, CGI, Accenture, IBM, Rogers Communications, CNR, Pratt & Whitney Canada, BMO Financial Group, The Standard Life Assurance Company of Canada, Air Canada, Canadian Tire Corp. Limited, Ericsson Canada, National Bank of Canada, Cisco Systems Canada, Bombardier, Ultramar, Pfizer, and SAP Canada identify business process analysis as a critical skill they look for in recruiting summer and full-time employees from leading Canadian business schools. The posting of a job opportunity in this area is most often referred to as a business process analyst (BPA) but can also be called a business analyst.

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Business Process Analysis: Three Key Components

Documenting the As-Is Process
Documenting the as is process involves describing an organizational process using a cross-functional process model and identifying the weaknesses of the as-is (current) process to the organization. Creation of a cross-functional process model involves documenting the activities, data/document flows, inputs/outputs, decision points, and stakeholders involved in the organizational process. Identifying weaknesses highlights opportunities for change (see Appendix A).

Designing the To-Be Process

Designing the to-be process involves identifying possible redesign options made possible through redesign approaches. Redesign approaches can involve changes to activities or information flows, changes to work procedures, changes to people/skill/talent, and/or the introduction of information and/or communication technologies. As there are several redesign approaches (defined later in this document), designing the to be process should involve a thorough decision making process to make sure the redesign approach chosen will generate the most potential value for an organization. As the majority of redesign initiatives are costly and time consuming for organizations, a BPA must be able to clearly define the value the organization will gain from such an initiative.

Implementing the To-Be Process

The key objective for implementing the to-be process is to identify and mitigate the risks associated with the redesign. As redesign approaches can introduce new technologies, change the structure of an organization, change the way people work, and/or change the competency (skill) requirements, resistance is expected and must be effectively managed.

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ITBV Process Analysis Framework

The modified ITBV process analysis framework is composed of five (5) steps. The steps must be conducted in the following sequence in order to generate the most thorough and accurate analysis of the organizations situation. For the purpose of COMM 190, the organizations situation is described in case studies assigned throughout the semester.

Step #1: Creation of As-Is Process Map

Step-by-step instructions for creating a cross-functional process map are provided in Appendix A.

Step #2: Case analysis - Identification of Problem(s) and Problem Sources

To analyze the business case, first skim the case and then read it thoroughly to identify the overall company objectives. The focus of the ITBV process analysis framework is to alter business processes to better align to the company objectives, so it is imperative that the company objectives be clearly defined. Once the company objectives are clear, search the case for problems (these are usually explicitly mentioned or inferred in the case). Common problems include incorrect pricing, excessive calls to the customer, delays in processing orders, missed delivery dates, data entry errors, inaccurate checks/verifications. For each problem, examine the process map to identify why the problem exists (sources of the problem). Common problem sources include duplicated activities, manual entry (or other sources of possible error), and lack of information flow. As it may not always be feasible to address all the problems in an ITBV process analysis, the problems must be prioritized based on the overall company objectives.

Step #3: Design the To Be Sub-Process

For each specific problem you choose to focus on, identify the sub-process where the problem source is located. A sub-process is a set of activities (i.e., one or more activities) and information flows that are associated with the activities. The key to designing the to be sub-process is to identify the appropriate redesign approach. The redesign approach suggests how sub-processes can be altered to gain value; the five redesign approaches are described below. Redesign approaches differ based on whether or not the sub-process where the problem resides is: 1) essential or non-essential, and 2) the degree of change involved in the redesign. How essential the sub- process is depends on whether or not the sub-process generates value that fits an overall objective of

ITBV: BPA Framework Page 6 the company. A BPA attempts to eliminate and minimize sub-processes that are non-essential and simplify, transform, or automate essential processes. 1. Elimination of non-essential sub-processes. Elimination is the removal of a sub- process that is not essential to the desired outcome of the overall process. For example, it is appropriate when the source of the problem relates to long wait times, excess inventory, duplication of processes, inspection, and reformatting of documents to comply with multiple systems. 2. Minimization of non-essential sub-processes . Minimization is the reduction of activities in a sub-process that are not essential to the desired outcome of the process (but still somewhat necessary). For example, minimization is appropriate when the source of the problems relates to multiple transportation of documents/data, excess handling, multiple points of inspection, and multiple points of verification. 3. Simplification of essential sub-processes . Simplification is the alteration of a sub- process that requires minimal change in procedures and people. Simplification is often achieved through the introduction of forms, procedures, communications, technology, or customer contact mediums. For example, simplification is appropriate when the source of the problem relates to manual data entry, complicated communication, complicated work flows, or complicated customer contact. Simplification is similar to minimization; the difference is that simplification fits with an essential sub-process whereas minimization fits with a non-essential sub-process. 4. Transformation of essential sub-processes . Transformation is the alteration of a sub-process that requires significant change in procedures and people (i.e., often process steps are removed and the process flow is altered considerably). Transformation is often achieved through the creation of new jobs, creation of cross-functional teams, transfer of work to the customer, or transfer of work to the supplier. For example, transformation is appropriate when the source of the problem relates to poor customer service, severe financial problems, non- competitive product/service offerings, or severe employee inefficiencies. 5. Automation of essential sub-processes . Automation is the replacement of the majority of the activities in a sub-process with technology. Automation involves the implementation of a hardware, software, and data solution that reduces or eliminates procedures and people (i.e., usually the same steps are done, just using more technology instead of people). For example, automation is appropriate when the source of the problem is task difficulty, lack of data capture or transfer, and lack of controls related to error checking or verification in a process.

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Step 4: Describe the Value of the Redesign Opportunity

The value of the redesign is described by what value the redesign will add to the organization. The what is described by five (5) possible value dimensions. It is important to note that this list is not necessarily exhaustive, but it is a good template to use when attempting to determine the benefit of the redesign to the organization. The five (5) dimensions are as follows: 1. Increase Quality of process and/or product. The redesign will improve the quality of the output that the company is producing. The output may be a product or a service. 2. Reduce Cost. The redesign will help an organization increase margins and profits. 3. Faster speed. The redesign will help increase the speed in which the company can meet customer or supplier needs. 4. Innovation. The redesign will help the organization differentiate their product/service from competitors, be first-to-market, or enable the company to develop new delivery options. 5. Improve relationships. The redesign will help the organization initiate and further develop relationships with customers (could be internal or external), suppliers, alliances, or competitors.

Step #5: Enabling the Process with an Information System

The information system needs to support the proposed redesign. There are five (5) components of the information system: Hardware, Software, Data, Procedures, and People. On the Computer Side, Software (Programs) provides instructions to the Hardware and on the Human Side, Procedures provide instructions to the people. The Data involved in the system acts as a bridge between the Computer side and the Human side (it is what usually both the computer and human are working with).

It is critical that the enabling information system aligns to the redesign approach (it enables the redesign change). A description of each approach and common enabling information system implications is described below:

ITBV: BPA Framework Page 8 Eliminating and minimizing redesign approaches will usually have minor (if any) information systems implications. Simplification is often enabled by changes to the hardware, software, and data and requires minimal change to procedures and people. Automation is usually enabled by changes to hardware, software, and data and likely involves the reduction of procedures and/or people. Transformation is enabled by changes to procedures and people and often requires changes to hardware, software, and data as well. A transformation is usually a major change and, as such, could also involve a combination of the other four approaches. Although the enabling information system has a specific focus, depending on the redesign approach, it is important that all components be defined (hardware, software, data, procedures, and people). Appendix B provides a summary of relevant hardware, software, and data terminology; use appropriate terms from this summary to describe the hardware, software, and data of the enabling information system. Procedures describe the work to be completed by the people in the system; a description of all relevant procedures and people are required.

Step #6: Implementing the Redesign

As the ITBV framework aims to identify value-producing redesign changes to procedures and people, often as a result of changes in technology, the implementation section focuses on the changes in people and work (procedures) since this is where resistance may be encountered that could undermine the potential value of the change. The Comm190 ITBV framework does not explicitly require the consideration of financial cost of implementation (although this would obviously be very important if this framework was being used within an organization); however, you do need to consider the feasibility of your redesign. There is always some level of resistance to change so the purpose of this step is to state the level of expected resistance to the redesign and enabling information system, identify the causes of that resistance, and identify opportunities that may mitigate the risk (including recognizing the stakeholders who will support the change and considering how involving them can help reduce resistance). Table 1 provides an implementation framework for all redesign approaches; please note that this is not a complete summary - there may be additional causes of resistance and mitigation opportunities.

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REDESIGN APPROACHES

Non-Essential Sub-Processes
Eliminate Minimize Simplification Low-Medium Likely Low As the focus is on non- essential sub-process, little resistance is generated. Some people may resist if parts of their jobs are eliminated/ reduced.

Essential Sub-Processes

Level of Resistance Causes of Resistance

Transformation Likely High

Automation Medium-High Resistance is generated by the degree to which technology eliminates peoples work.

Mitigation Opportunities

Key to mitigation is to inform employees of the non-essential nature of the sub-processes in question and build their support.

Resistance is generated by the degree to which the redesign will alter peoples work. If the change is simple resistance will be less. If change is transformational resistance will be much more. Resistance is generated by the degree to which the redesign creates structural changes related to changing authority, departmental responsibilities, or possibly loss of positions, etc. Involve people in the change process, gain top management support for the change, keep hardware, software, and data changes as simple as possible.

Replace job losses with new responsibilities and opportunities.

Table 1: ITBV: Implementation Framework

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Appendix A: Instructions for Creating an As-Is Cross Functional Map

1. Draw a cross-functional process map a. Identify the cross-functional bands (be sure each function involved is represented, including internal and external) b. Label each band (if possible, put the customer at the top) c. Identify all activities (i.e., a task that changes an input). d. Identify all decisions (i.e., a branch point that initiates two or more possible processes) e. Check that all activities and decisions are in the correct band (i.e., in the function responsible for the task or decision) f. Check that all activities are in the correct sequence. 2. Add and label inputs & outputs. a. Arrows can show movement from one activity or decision to another (no information flow, just shows sequence so no label is required). b. An arrow can also be an Information Flow that shows a transfer of information as an output of one activity or decision to another activity or decision. These types of arrows should be labeled to indicate what information is being moved between the steps. c. Check that all flows that cross bands are labeled with information flow.

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Appendix B: Summary of Hardware, Software, and Data Components

Hardware
Computer Hardware: o Client (e.g., PC, Blackberry, Cell Phone, laptop) o Server (Web server, Database server, Application server, Email server etc.) o Peripherals (Photocopier, Printer, Fax Machine, etc.) o Components (processor, main memory, secondary memory, input and output devices), Network Hardware (various media, hardware switches & routers, etc.): o WAN (modem to ISP, Leased Lines). Modem to ISP can be Narrowband (dial up) or Broadband Internet connection (DSL, ADSL, cable). o LAN o Wireless LAN, Wireless WAN (e.g., WiFi, WiMax)

Software
Application Software: o Horizontal-market applications (word processors, graphics, spreadsheets, presentation programs) also include communication applications (text messaging, and many Web 2.0 applications such as RSS, weblogs, and social networking (Facebook)). o Vertical-market applications (dental office scheduling software, auto mechanic customer information system). o Cross-functional integrated applications (CRM, E-Commerce, SRM, ERP) can include order-entry applications, purchasing applications, warehouse management applications etc.) o Custom Applications (e.g., IRS). Operating Systems: Windows, Linux, MacOS, Unix and server operating systems Web Applications: Website, Portal, Web Crawlers, Search engines, Browser and web server software Security Software: Firewall, anti-virus programs, VPN Thin Client/Thick Client arrangement: Software can either be thin (program run on the server) or thick (program run on the client). Applications are considered server-side if thin and client-side if thick. Network Protocols: VoIP (software e.g., Skype), other protocols that enable LANs, WANs and internetworks (TCP/IP), the web, encryption, VPN, etc. (networks are created via a combination of hardware and software)

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Databases and Data-Related Software

Relational database software. Types of Databases: o Transactional databases (e.g., customer database, order database, supplier database, shipping database). Operational databases, Analytical databases (Data Warehouse, Data Mart) o Content Management Databases (e.g., storage of rich documents such as resumes, company reports, company documents, email database, blog database). o Object-oriented Databases Database Software: o DBMS (Enterprise, Personal). Different types of DBMS for different types of data (e.g., relational DBMS for transactional data, document management system like Lotus Notes for content management database. o Database applications (forms, reports, queries) o Business Intelligence/Data mining software (e.g., market based analysis) o Knowledge management systems Decision Support Systems have a model base and a database (e.g., expert systems).

Data Component (recommendations under the data section of the ITBV):

What data, information, and/or knowledge are required? (e.g., entity, attributes, etc. if relational data being used to hold the data) Considering existing databases, what has to happen to capture the required data/info: o Add database table o Add database field o Add Metadata

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ProRetail: Business Process Analysis (BPA) Case

ProRetail is a successful Canadian supplier of athletic wear to the high-end consumer market. They sell an exclusive selection of equipment and apparel to men and women who exercise and pursue sport activities on a regular basis. They operate in five upscale retail stores in the Western Canadian market with their headquarters (HQ) in Vancouver, BC and a warehouse in Burnaby, BC. There are several centralized departments at HQ including accounting, purchasing and sales/marketing. Most of their products are purchased from two suppliers, Winter Gear Distributors outside Vancouver and Canadian Fitness Supplies in Burnaby. ProRetail has expanded successfully in the Western Canadian provinces over the past five years; however, to expand nationally as a major retailer they need to improve the scalability of their operations (stores and warehouses). A key part of their strategy is to leverage information systems to automate and improve operations. A diagram of their operational structure is provided in Exhibit 1.

Organizational Processes at ProRetail

Both Winter Gear Distributors and Canadian Fitness Supplies mail quarterly product catalogues to the Purchasing Department at ProRetail HQ. Purchasers buy from these distributors four times a year; buying decisions are made based on an analysis of data in both the ProRetail sales and purchasing databases. The sales database is part of the sales and marketing information system; it captures customer and sales information from both the in-store POS system as well as the e-commerce system that enables web-based sales. The purchasing database stores supplier and order data as well as inventory data from the warehouse. Warehouse inventory values are updated each quarter after the inventory manager completes inventory at the warehouse. Inventory-taking is a paper-based system that requires warehouse employees to manually count inventory and record totals. The final inventory report is faxed to the ProRetail purchasing department for manual entry into the purchasing database. To place an order, the purchasing manager calls the automated order system at each distributor and orders products by catalogue number and quantity. Once an order is placed, both distributors ship product directly to the warehouse. The product is shipped with a detailed packing slip that clearly states the catalogue number, description, and quantity of each item in the order. For payment, distributors send an invoice to the Purchasing department at ProRetail Headquarters. The Purchasing department at ProRetail HQ verifies the invoice with the packing slip (received from the warehouse) and two copies of the invoice are made: one stays in purchasing so the purchasing database can be manually updated and one is sent to accounting for payment. The purchasing manager files the detailed packing slips for reference. The stores and the ProRetail Warehouse are responsible to HQ with respect to profit & loss for their own entity. ProRetail store managers decide what to stock in their stores; they purchase and manage

ITBV: BPA Framework Page 1 4 their own inventory (from the warehouse only). The purchasing department at ProRetail HQ sends a copy of the supplier product catalogues, a description of products ordered for the warehouse, and a Recommendation for Purchase document that defines the products and quantities that are likely to sell based on the purchasing managers analysis of past ProRetail sales history across all retail stores. The Recommendation for Purchase document is the same for all stores. All in-store advertising, website design, and promotions are the responsibility of the sales and marketing department at HQ. To place an order from the warehouse, a store manager calls the warehouse and the warehouse manager fills out an order form. Three copies of the order form are made: one copy is sent to the store manager for verification, one copy is used at the Warehouse to fill the order, and one copy is sent to the Sales/Marketing Department at HQ for entry in to the sales database. Once the order is filled, the warehouse manager sends an invoice to the Accounting department; the Accounting department processes the invoice (an internal transfer from the store to the warehouse). A copy of the paid invoice is sent to both the store manager and the warehouse manager for their records. Internal invoices are paid whether sufficient funds are available or not; issues related to insufficient funds (i.e., store losses) are evident in the Quarterly Income Statements that are created by Accounting and sent to the store managers and the executive members at ProRetail. Finally, each store is equipped with an in-store point-of-sales (POS) system and a web-based sales information system (client) that enables store managers to view orders and track shipping information. The in-store sales process is simple; sales representatives process payment and package product for the customer. Web-based sales are quickly becoming the primary source of revenue in most of the ProRetail stores. The web-based sales application is a central e-commerce system (server) managed by the sales and marketing department at ProRetail HQ. Once a web-based sale is made, the central e-commerce system at HQ processes payment and captures customer and product information in the sales database. Once sales/marketing confirms payment, a web-based order form is sent to the web-based sales information system (client) at the retail store closest to the customer for processing. The central e- commerce system (server) sends complete sales information, including the retail store that filled the sale, to the sales database at HQ tracks to ensure the retail store is given credit for the sale. Managers at each retail store are required to check the web-based sales system first thing in the morning and again after lunch. Stores are responsible for picking the products on each order form and packaging them for shipment. ProRetails policy is that all stores will process two shipments a day, one at 12:00 noon and one at 5:00pm. All shipments are sent Canada Post Xpresspost; this service provides ProRetail with a tracking number and an email confirmation once the package is delivered. Once a shipment is complete, the store manager enters shipping and tracking information for each order into an Excel spreadsheet for their reference. Often managers do not have time in the business day to enter the tracking and shipping information so they simply file the paper records for entry in to the system at a later time. At the end of each business day, store managers compile a detailed summary of in-store sales and send the electronic file via a dial up connection to HQ. The connection is a secure link between each store and the sales database. ProRetail recognizes that other networking solutions are available that are faster; however, as the file has personal and confidential data, their primary concern is security. The electronic

ITBV: BPA Framework Page 1 5 file from each store is loaded into the sales database at ProRetail Headquarters. The sales database stores detailed sales and customer data for each store.

Current Situation at ProRetail

To date, ProRetail has enjoyed rapid growth and have been very effective at attracting new customers. In an effort to expand nationally as a major retailer, senior executives recognized the need to maintain the companys momentum by retaining customers, employees, as well as controlling costs where possible. Senior executives were very concerned about customer service. In the current process, the e-commerce system verifies payment confirmation but the customer does not receive any shipment information about their purchase. One customer explained their frustration with ProRetail, I called ProRetail to inquire about an order and was told they couldnt help as my order was processed by a specific store. I had to actually ask for the store number ridiculous. When I called the store, I waited while the store manager fumbled to find my order only to learn that my only option to track my package was to call Canada Post myself! Is providing me with a tracking number your definition of customer service? As much as I love your product your service is very disappointing. This will be my last order from ProRetail Store managers had several complaints. First, advertising and promotions were becoming more and more ineffective. Store managers explained that each store has a unique customer profile and the advertising and promotional campaigns are too general to be effective. Second, processing web-based orders is taking more and more time and in-store customer service is starting to suffer. One store manager explained, There are many days I find serving in-store customers an annoyance as web-based orders are becoming more important to my bottom line. Finally, store managers are frustrated with the store ordering process in general. The Recommendation for Purchase document is not overly helpful and store managers find they have little guidance from Headquarters in terms of buying decisions. They also complained about receiving products they didnt order from the warehouse or not receiving products they did order. As the warehouse does not send a packing slip with the store shipment, correcting order errors often become an episode of he said, she said. Finally, executives were focused on trying to get a better handle on cost control by addressing some of the inefficiencies in ProRetails processes. Specifically, not only were inventory levels at the warehouse increasing, but the percentage of scrap inventory being written off has also increased over the last three years. Executives also realized that although the overall profit position at ProRetail was positive, some stores are highly profitable and others are consistently producing losses.

ITBV: BPA Framework Exhibit 1: ProRetail Operational Structure

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ProRetail: Business Process Analysis (BPA) Sample Case Solution

Step #1: Creation of As-Is Process Map
See Solution Exhibit A: ProRetail (Possible Solution). Note that this is just one solution, there are variations that are also acceptable (which is also likely true for the redesign ideas below).

Step #2: Case analysis - Identification of Problem and Problem Sources

ProRetail Objectives National expansion requires an improvement in cost control and scalability of their existing operations and corporate control over store operations (some highly profitable others producing losses). Maintain momentum by retaining customers and employees.

Problem s (listed in priority) Case analysis resulted in the identification of three primary problems at ProRetail. As rising inventory costs need to be addressed to prepare for national expansion these are identified as highest priority. Addressing customer service problems (Problem 2) is also important to retain existing customers and employees. Problem 3 will not be addressed in this analysis. Decentralizing advertising and purchasing decisions are recognized as opportunities for change; however, it is not clear these changes specifically address ProRetails objectives in the short term. 1. Rising inventories are costly to manage and scrap inventory costs are rising. After careful analysis of the process map, two sources of this problem were identified: a. Manual entry of inventory data. Warehouse takes stock and updates inventory quarterly. This process is slow and prone to errors (possibly). Results are faxed to purchasing and manually updated into the purchasing database. b. RFP document created by sales/marketing is not store specific and do not consider upcoming promotional and marketing campaigns. Order placed by phone. No documentation about what was ordered (to match to what was shipped i.e., no packing slip so possible issue in operations as product shipped that was not ordered). 2. Customer service problems both in online orders and in-store service. a. Source: No centralized online order system so tracking information is handled at the store level and stores do not have a system to track orders once they leave the store. No formal separation of web order staff and in-store staff so, as web sales increase, quality of in-store service decreases.

ITBV: BPA Framework Page 1 8 3. Centralized sales and marketing is not providing store-specific advertising or purchase recommendations. a. Source: The sales/marketing department consolidates sales data and develops advertising and purchase recommendations based on a centralized view of the data; as such, the advertising and RFP document are too general and do not provide store- specific information.

Steps #3-6: To Be Process, Value, Enabling IS, and Implementing the Redesign
Problem 1a: M anual entry of inventory data. Sub-Process: Involves the Warehouse and HQ Purchasing (See Process Map Solution Exhibit A).

Design Approach: Simplification of an essential sub-process. This manual process can be simplified by capturing inventory data at the source enter data electronically to the purchasing database as the inventory arrives at the warehouse. As such the fax inventory report and update purchasing database can be removed from the sub-process. The limitation of this new design approach is that data in the system will only include flows in as such, the design needs to also include an activity that will populate the purchasing database with flows out data once orders are filled for the stores. Value Proposition: Reduce labor costs for updating inventory and increase speed of the inventory tracking process. Increase the quality of the inventory data at ProRetail through real time inventory capability that can enable better decision making. Enabling IS:
Hardware: Hand held PDA wireless devices. Warehouse server to store stock data and to communicate with the purchasing database to transfer data. Software: Inventory application for entering flows in and flows out. Data: Purchasing database needs to be updated to include an Inventory table that includes product descriptions, codes, and quantity to describe the inventory. Procedures Employees will use the PDA to enter product information when the inventory arrives at the warehouse. They will also use the PDA to enter order information when the inventory is shipped to the stores. People Warehouse employees.

Implementing the Redesign: Warehouse employees may resist the use of the PDA. Management will need to explain the benefits of the enabling IS to the employees and provide them with training. It is important to note that as the inventory update was a quarterly activity in the as-is process, the short term gain may not be perceived as outweighing the cost so there could be some manager resistance. They key to the business case is that a more up-to-date view of inventory is essential to supporting the companys expected growth and errors could become very costly if they result in stock outs or excess inventory supply.

ITBV: BPA Framework Problem 1b: RFP docum ent created by sales/m arketing is not store specific.

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Sub-Process: Involves Purchasing, Stores, and the Warehouse (See Process Map Solution Exhibit A).

Design Approach: Simplification by introducing new procedures and technology. A new procedure is needed to analyze sales activity by store and create custom RFP documents for each store. As this new procedure requires sales/marketing expertise, it is recommended that this activity be an integrated effort between sales/marketing and purchasing. The procedure change would be to change Prepare RFP for stores activity to Analyze sales by store and prepare custom RFP for each retail store. Also, a new information flow upcoming advertising and promotional campaigns from sales/marketing would need to be added so the Prepare PFP for stores activity could be informed by upcoming marketing efforts. A new order system is needed that will enable the store to place orders electronically and verify the order once received. Value added: Quality of products offered in each store improved (fits customer profile better). Reduce cost of inventory as a more effective order system will improve the accuracy of store orders. Improve the relationship between Headquarters and stores as headquarters (specifically sales/marketing and purchasing departments) is more aware and focused on individual store needs. Enabling IS:
Hardware: Server to support the new order system. Clients (likely PCs) at each store. Software: Business intelligence software. Cross-functional order entry system. Networking software to connect the order entry clients (stores) to the server in the warehouse. Data: Add store table to the sales/marketing database. Order data (product descriptions, codes, and quantity). Procedure: Purchasing manager must coordinate with sales/marketing and spend more time analyzing sales data by store and creating custom RFP documents. Warehouse manger must print orders from the order entry system. People: Sales/marketing manager. Warehouse manager. Store managers.

Implementing the Redesign: Purchasing manager may resist the additional work involved in creating custom RFP documents as well as the requirement to coordinate with marketing. It is imperative that the purchasing manager understand that the suggested redesign will not change the authority or responsibility of the RFP document it should remain a purchasing department responsibility. To mitigate the risk it is recommended that the purchasing manager be involved in designing the changed process to make sure he/she has input into the new job responsibilities. It may also be necessary to hire some assistance for the purchasing manager to help them manage the added work.
Store managers may resist the electronic order system but this is unlikely as the store managers already have experience with technology through web-based sales. As this will simplify the process, it is expected that the managers will not resist. That being said it is important that the order system work and is easier to use otherwise, there is a risk that store managers will revert back to the old process.

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Problem #2: Customer service problems both in online orders and in-store service. Sub-Process: Involves HQ Sales/Marketing, Stores, Customers, and Canada Post (see Process Map: Solution Exhibit A)

Design Approach: Transformation by moving the web order and fulfillment activities away from the stores to a centralized warehouse. Value-Added: Increase quality of online order fulfillment and customer service. Enabling IS:

Hardware: Warehouse server and PDAs for the pickers and packers. Software: Vertical-market application that integrates the warehouse to the Canada Post shipping company so packages can be tracked online by customers. Data: Tracking # for shipping, order details (product, quantity, price), payment data, customer data. Procedure: No change to actual pick and packing procedure responsibility of procedure will move from stores to the warehouse. A new procedure is needed to automatically enter the shipping and tracking information into the customer order system (assuming this is a component of the vertical-market application). New procedure will be needed to handle exceptions for those customers who cannot find a solution from the online system it is recommended this replace the sales/marketing activity look up status or refer to store. People: Warehouse manager and employees, sales/marketing, and the customer.

Implementing the Redesign: Resistance from stores is anticipated to be very high as web sales represent their primary growth opportunity. To mitigate the risk, it is recommended that headquarters develop a policy that assigns web sale revenues by geographic region as such, a store in Kingston would get credit for all sales from customers with postal codes within 175 km from Kingston. Marketing may also resist in the long term if the number of calls increases dramatically ProRetail may need to consider hiring a customer service representative in the near future. Finally, ProRetail will need to hire pickers and packers for the warehouse these jobs should be offered to interested store employees internally prior to conducting an external search.

ITBV: BPA Framework Exhibit A: ProRetail Process Map Solution

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Problem #1a Problem #1b Problem #2