Managing Information Technology

338 Part III • Acquiring Information Systems

Old Ways to Work Information Technology New Ways to Work

Field personnel (such as sales and

customer support staff) need to

physically be located in an office

to transmit and receive customer

and product data

Portable computers with communications

software and secure networks that allow

remote access to company data

Field personnel access data and

respond to messages wherever

they are working

Centralized databases that capture

transactions from different parts of the

business and are accessible via a network

Client data can be accessed

simultaneously by employees

working in different business units

Only experts can do a complex

task(see Mutual Benefit Life

Insurance example)

Expert systems that have knowledge

rules used by company experts when

they do this task

Generalists can do a complex

task previously only done by

an expert

Client data is collected in different

databases to support different points

of contact with the client

FIGURE 8.7 How IT Enables New Ways to Work

This was accomplished by supporting the case manager with
an advanced PC-based workstation, expert system software,
and access to a range of automated systems. Time to issue a
policy dropped from three weeks to about three hours.

IT as an Enabler of BPR

In both of these examples, IT played a key role as an
enabler of radical business process redesign. Hammer and
Champy (1993) encourage managers to go through exercises
that help them think about how IT can be used to break old
assumptions and rules. Three examples of rule-breaking IT
are provided in Figure 8.7.
Hammer (1990) advocated the use of key principles
for redesigning business processes. A consolidated list of
six principles is presented next.

1. Organize business processes around outcomes,
   not tasksThis principle implies that one person
   should perform all the steps in a given process, as in
   the case of Mutual Benefit Life, where one manager
   handles the whole application approval process. IT is
   used to bring together all the information and decision-
   making resources needed by this one person. Often
   this principle also means organizing processes
   around customer needs, not the product.


2. Assign those who use the output to perform the
   processThe intent of this principle is to make those
   most interested in a result accountable for the
   production of that result. For example, Hammer
   reports the case of an electronics equipment
   manufacturer that reengineered its field service
   function to have customers perform simple repairs
   themselves. This principle reduces nonproductive
   overhead jobs, including liaison positions. Principles

1 and 2 yield a compression of linear steps into one

step, greatly reducing delays, miscommunication,

and wasted coordination efforts. Information tech-

nologies, like expert systems and databases, allow

every manager to perform functions traditionally

done by specialty managers.

3. Integrate information processing into the work
   that produces the informationThis principle states
   that information should be processed at its source.
   For example, at Ford this means that the receiving
   department, which produces information on goods
   received, should also enter this data, rather than
   sending it to accounts payable for processing. This
   puts data capture closest to the place where data
   entry errors can be detected and corrected, thus
   minimizing extra reconciliation steps. This principle
   also implies that data should be captured once at the
   primary source, thus avoiding transmittal and
   transcription errors. All who need these data work
   from a common and consistent source. For example,
   the true power of electronic data interchange (EDI)
   comes when all information processing related to an
   EDI transaction works from a common, integrated
   database. This principle also implies that process
   design should begin early in the information systems
   development process, when enabling technologies
   can influence breaking long-standing business rules
   before they are perpetuated by new information
   processing.


4. Create a virtual enterprise by treating
   geographically distributed resources as though
   they were centralizedThis principle implies that
   the distinction between centralization and decen-
   tralization is artificial with IT. Technologies such as