Knowledge management Related to Second Wave BPR
Knowledge management (KM) is a set of activities aided by information technology infrastructures that are designed to help enterprises more effectively: create, capture, synthesize, deploy, share, preserve, and reuse organizational knowledge.
In the late 1990s, enterprise started to focus attention on understanding how to manage organizational knowledge more effectively, as products and services become more knowledge intensive.
But what is an organization’s knowledge?
Organizational knowledge is an elusive concept to define and is not yet well understood.
It is not a more grandiose word for information, rather it is a multifaceted concept.
It can be thought of as having three faces that are exhibited simultaneously:
- Knowledge as object (what an organizational knows).
- Knowledge as process (how an organization learns something new).
- Knowledge as capability (how well an organization uses what it know).
Knowledge as object (what an organizational knows).
This is a view of knowledge as patterned information that produces insight.
It brings with it a perspective on knowledge management that centers around managing knowledge repositories that can be reused effectively.
Knowledge as process (how an organization learns something new).
This is a view of knowledge that centers around the process of knowledge creation and knowledge sharing as learning.
It brings with it a perspective on knowledge management that work at enhancing shared knowledge creation around business processes and accelerated learning.
Knowledge as capability (how well an organization uses what it know).
This is a strategic view of knowledge that treats it as a core competency connected to know-how and intellectual capital.
It brings with perspective on knowledge management that has to do with the potential synthesis and application of knowledge to new situation.
Enhancing any of these three facets around a business process can create a better knowledge management environment and, in effect, redesign the process (i.e., BPR).
Especially true for knowledge intensive business processes such as new product development or costumer support, which have received increased attention with second wave BPR.
It has been pointed out earlier that one of approaches that constituted second wave BPR was based on more effective knowledge management around business process.
Process redesign heuristics that can be used to change knowledge management and increase the knowledge creating capacity of a process.
BPR can be done by expanding the knowledge creating capacity of the process so that it learn more effectively through the interaction of its various participants, effectively giving the process a “mind” to help it function better.
Provides several principles and tactics for changing knowledge management around business processes.
How Does the Reengineering of Knowledge Work Different?
Reengineering of knowledge work more difficult than the reengineering of clerical and production work, and we know less about how to do it well.
Business processes that include intensive knowledge work are typically more difficult to tightly structure and automate through workflow management.
Business process such as order fulfillment is highly structured and follows a series of well defined predetermined steps product every time process is enacted.
Business process such as new product development is more fluid and cannot be tightly predetermined to be repetitive.
Follows that redesign heuristics that center around increasing the knowledge creating capacity of the process may be especially useful for knowledge work, rather than heuristics that try to restructure the architecture of the process of the process.
Furthermore, the information technologies that are likely to enable new ways of carrying out knowledge intensive business processes may also be different; group technologies for collaboration, search engines and data mining tools, and adaptive database.
What Is the Relationship of Customer Relationship Management (CRM) Software to Knowledge Management and BPR?
In the late 1990s another type of enterprise management software emerged in the marketplace:
- Costumer relationship management (CRM) software.
- Enterprise resource planning systems (ERP)
- Focused on the back office and transactional data
CRM systems focused on the front-office and relationship data.
CRM systems are an out growth of sales force automation systems that developed in the early 1990s.
Systems provided a way for capturing and organizing customer contact information for sales people.
Sales force automation systems then grew to become sales, and customer service systems to become sales, marketing, customer service systems that developed into front-office systems (i.e., the systems for interface with costumer).
CRM software includes functionalities such as lead/opportunity management, telesales management, database marketing and costumer profiling, sales configuration modules for configuring product, interactive marketing encyclopedias, and call center management.
CRM software is growing at 50 percent per year at this writing and the current market leader is Siebel Systems.
Sales force automation systems then grew to become sales, and customer service systems to become sales, marketing, customer service systems that developed into front-office systems (i.e., the systems for interface with costumer).
CRM software includes functionalities such as lead/opportunity management, telesales management, database marketing and costumer profiling, sales configuration modules for configuring product, interactive marketing encyclopedias, and call center management.
CRM software is growing at 50 percent per year at this writing and the current market leader is Siebel Systems.
Business environment moved further toward customer centricity and service based business model, the CRM process became a critical enterprise process to be redesigned and improved CRM is the customer life cycle process of identifying, securing, nurturing, and keeping customers.
Involves acquiring new customer (say through direct marketing), enhancing profitability of existing customers (say through call centers or cross selling) and keeping profitable customers (say through profiling royalty program).
CRM software includes capabilities for interfacing with a large enterprise database or data warehouse that organizes all the data captured through the numerous interaction during the CRM business process.
This information can be sliced in different ways, inferences made, and knowledge about customer relationships created and grown.
CRM software allow different ways of managing knowledge around front-office processes and thus enables BPR of these processes.
As opportunities for creating value in e-business settings continue to grow around capturing customer knowledge and redesigning customer interaction processes, CRM software may become the driving backbone of enterprise IT architecture.
This opportunity has not escaped ERP vendors, who have rushed to integrate ERP with CRM through development project (such as SAP and Oracle) or acquiring CRM vendors (Peoplesoft acquired Vantive and Baan acquired Aurum) or by allying closely with CRM vendors (J.D. Edwards allied with Siebel).
The ERP vendors idea is to integrated the back office processes together through their expanded software.
The CRM vendors claim the ERP systems are not geared for customer relationship but rather for resource efficiency and transactions.
Knowledge management is becoming critical for improving enterprise and supply chain processes, CRM front-office software will add the most value to business processes.
Can Measure How BPR Applied to Knowledge Work Translate into Value?
Process is redesigned to be more knowledge creating, it is tricky to measure the added value to the customer of the process.
One of characteristics of such a redesign principle is that it causes the business process to learn more from the participants in interaction.
Value of the process increases over time as intellectual capital trough repeated execution, even though initially there is no immediate added value for the customer.
Difficult at the design stage to measure what the return on redesigning the process might be.
Quicker that the new knowledge in the process can be translated into value that the customer is willing to pay for (whether through this business process or a related one), the more effective the business process design is.
Can Measure How BPR Applied to Knowledge Work Translate into Value?
This is one of the central tenets of Knowledge Value Added (KVA) methodology (Kanevsky & Housel, 1995; Housel and Hom, 1999).
KVA is a leading edge methodology, but there are over 40 case studies of companies using in to help guide the reengineering of core processes (example at : www.businessprocessaudits.com)
Advances have been made by Housel and Kanevsky to measure return on knowledge (ROK) as a way of comparing how much value different BPR alternative provide to a process.
They are working to extend their techniques to link the ROK rations with external financial indicators such as earning per share.
Second wave BPR continues to emphasize the importance of a creating value quickly and value can be created through increased knowledge creation around process, such techniques will become increasingly central for guiding BPR
Web-enabled e-Business and 2nd Wave BPR
BPR for e-Business involves redesigning both enterprise and supply processes around the Internet
- Urgency will increase
- Change in business models
- Opportunities for info. Flows and knowledge management around processes
- Ubiquity will increase
- Process of carrying out BPR will change to take advantage of the Internet
How will Web Enabled e-Business Change the Nature of Second Wave BPR?
BPR for e-business is introduced and its nature explained.
Principles and tactics of process redesign for e-business by laying out a framework termed the e-business speed loop.
Methodology for how collaborative supply chain processes for e-business can be redesign.
IT integration option for e-business processes and also outlines the additional implementation challenges that come with organizational transformation to e-business.
There will be no attempt at summary here, but we will point out a number of common themes:
- BPR for e-business involves redesigning both enterprise and supply chain processes around the Internet.
- Urgency of BPR will increase further as-brick-and-mortar enterprise race to transform their processes for e-business.
- The change in business modeled for creating value quickly will further drive BPR for e-business.
- There will be many more opportunities and ways to change the information flow and knowledge management around a business process as a method of BPR.
- The ubiquity of BPR will increase as urgency of e-business permeates smaller companies.
- The process of carrying out BPR will very likely change to take better advantage of the Internet and intranets to support collaboration on BPR projects.
Will BPR for e-Business Be Different for Brick and Mortar Enterprise Than It Is for Internet Only Enterprise?
- Brick and mortar enterprise is a slang name for a company that invested heavily in physical buildings (factories, offices) and typically has many physical locations through which customers interact with it.
Bricks-and-Mortar vs. Internet-Only
Hybrids
- Redesigning both physical and virtual processes
- Hybrids and can be characterized as “click-and-mortar” enterprise that exist both on the Internet and in the physical world-whether they are Internet “natives” or Internet “immigrants”.
Some Internet-only
- Internet-only enterprise is a company whose business processes and products exist only on the Internet.
- Internet-only enterprise provides only digital product (downloadable music, downloadable software, for example) or electronic services (financial services, information, electronic transaction processing, for example), and makes these available only through the Internet channel.
As we move into e-business, most enterprise will typically be hybrids and can be characterized as “click-and-mortar” enterprise that exist both on the Internet and in the physical world-whether they are Internet “natives” or Internet “immigrants”.
Amazon.com started as a bookstore on the Internet and is an Internet native.
While its front-office processes and customer interface are purely electronic and it has no physical retail stores, it back-office processes heavily involve the warehousing and physical distribution of physical goods (books, CDs, toys).
Barnes and Noble started as a bookstore in physical world but immigrated to the internet. Its front-office process include both electronic interfaces to customers and physical retail stores that custommers can visit.
How Will e-Processes Be Managed?
- Will business processes be managed differently across enterprise in an e-business world?
- Will there be different organizing models other than supply chain process model?
- How will e-processes be executed?
Supply chain process model evolve to a different structural form that is more advantageous to e-business.
Ubiquitous connectivity Internet of the Internet and the need to organize supply chain processes differently for e-business have given rise to a new form enterprise called a portal.
Form of organizing in which e-processes have primacy over physical processes, and physical business processes are rebundled and redesigned around e-processes.
Appears that business will be rebundled around process competences and process complementarities.
Each enterprise in the supply chain will be responsible for executing the process that it does best all the way to the customer.
One enterprise may be responsible for the sales and marketing process, another for order fulfillment, and yet another for customer service, but they will all be electronically orchestrated through one interface to the customer.
Form of tight orchestration among enterprises directly around the customer is only possible with seamless Internet connectivity across processes.
Model of organizing in which rich information flow from collaborative relationships fuel knowledge creation.
New form of organizing supply chain has been termed the “orchestrated e-process” (El Sawy, Gosain, and Malhtra, 1990).
Ubiquitous connectivity Internet of the Internet and the need to organize supply chain processes differently for e-business have given rise to a new form enterprise called a portal.
Portal have arisen at the interstices between enterprises in e-business supply chains.
Portal in the e-business world a coordinated access point in the form of a Web site that provides solutions and services, knowledge and information, or software tools.
Vertical portals target particular industries (for example chemical industry) while horizontal portals provide particular type service to broader market (for example, providing online maps to consumers, travel agencies, and car rental companies).
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