Wednesday, March 25, 2009

Business Process Management

With the current downturn, margins are being squeezed in most industries, resulting in an urgent need for higher efficiency and greater effectiveness, including the putting in place of better-value ways of working. A true e-business of the twenty-first century is one which thinks and acts in a way that allows it to collaborate, integrate and empower by:

  • internal and external business processes working together seamlessly, enabling collaboration with suppliers, partners, employees and customers across traditional enterprise boundaries;
  • ensuring that employees have at their fingertips the information, applications and services they need to do their jobs.

It is the Web and the applications, standards, tools and services that have been developed around it that have removed the traditional barriers to building collaborative relationships and now made it an economically attractive option.

The benefits from the transformation of business processes are derived from eliminating intermediaries like wholesalers and retailers from the value chain, removing manual operations, improving productivity and speed of operation, increasing efficiency and enhancing customer and supplier relationships.

According to industry analysts IDC Research,1 companies are on the brink of another growth cycle in IT spending, with application integration, mobile wireless and security the chief factors driving companies to invest in technology. A joint survey released in May 2002 by KPMG2 and the CBI reveals that 90 per cent of companies believe e-business will reduce costs by at least 10 per cent but only 15 per cent are currently reaping the rewards. Improving business processes alongside new technology could boost the profits of UK companies by £4.3 billion a year according to the Gartner Group, 3 who quote Easy jet and Tesco as two examples of organizations that have maximized their agility. By re-engineering the distribution chain and pushing sales online Easy jet cut out the costs of sales intermediaries and then further reduced costs by issuing e-tickets. Improvements with customer information at Tesco has reduced lost sales on promotions by 33 per cent and reduced promotion overhead and waste by 30 per cent, while wireless technologies have also increased the productivity of warehouse staff and improved the accuracy of warehouse-to-store deliveries.

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