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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/14399
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| Title: | A VALUE-CHAIN BASED PROCESS MODEL FOR SUPPORTING BUSINESS PROCESS REENGINEERING |
| Authors: | Dhar, Vasant |
| Issue Date: | Dec-1991 |
| Publisher: | Stern School of Business, New York University |
| Series/Report no.: | IS-91-42 |
| Abstract: | Constantly envisioning how the rapid developments in information
technology offer new opportunities, and engineering business processes
accordingly will continue to be a difficult problem for senior
management. An important observation by Keen (1991) is that over the
last three decades, effective use of rapidly changing technology has
lagged its availability. A central problem is that of justifying the
technology, measuring its business value. The value-chain model
articulated by Porter (1985) is a natural candidate in providing a basis
for this evaluation. It is based on the simple economic theory that a
firm remains competitive by virtue of being a low cost producer or
differentiating its products/services to the customer, that is, by
providing customer satisfaction. It is intuitive to think of "the
customer" as the end user of a product or service. However,
projecting this definition into the organization, where all pieces of
work within it have a customer that needs to be satisfied provides a
good basis for work design and its implementation. As technology
evolves, forcing the organization to reassess its customers, the work
must be redesigned. This is becoming known increasingly as "process
reengineering" . Porter's model has found widespread appeal among
practitioners at the strategic level due to its theoretical simplicity
and commonsense appeal. Several methodologies have been designed around
this model that encourage executives to "think through" and
identify technologies that could provide competitive advantage. However,
these methods have some serious limitations due to the lack of a sound
conceptual underpinning and their inability to link explicitly,
technology to business value metrics. Based on an analysis of one
specific industry (insurance) we have found that simple process oriented
models such as BSP, when extended to deal with value (in terms of cost
or product/service differentiation to the customer), provide a sound
basis for exploring process reengineering. An implementation of this
methodology should enable management to simulate how a system would
"react" to various types of inputs in terms of specific
metrics of interest. |
| URI: | http://hdl.handle.net/2451/14399 |
| Appears in Collections: | IOMS: Information Systems Working Papers
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