by Jack Shaw
Becoming an e-business is about more than simply setting up a web site and waiting for the orders to pour in. Companies who want to transform themselves into e-businesses must not just implement such e-commerce technologies as the Web, EDI, bar coding and email. They must look at their internal processes and systems and change them in ways that will take full advantage of e-commerce. One very useful way of managing these internal business practices is to analyze, and eventually digitize your business's information streams.
Every organization has many information streams flowing through it on a daily basis. And it doesn't matter what size the business is. Even small businesses will have information flows in the form of bank statements and invoices, orders, contracts, etc. With large businesses, the information streams can resemble Niagara Falls. So what happens if all of this information is on paper?
The nine steps that follow show you what you need to do in order to analyze your paper information streams, assess how the information could be communicated digitally, and determine how the processing of the information could be automated. Whether your business is large or small, you will want to appoint one or more individuals to manage this assessment. Since they will be interacting with managers across departments, it should be someone with sufficient authority to require information from them. Many companies find it beneficial to put together a team for this purpose.
Step 1- Identifying Information
Obtain a clear picture of what information enters your organization, how the information is received, what specific departments need access to the information, and how the information enters your business management systems.
You will need to thoroughly investigate all information coming into your organization and what format is employed to carry the information. It is usually a good idea to organize information flows department by department. Keep in mind that information may enter the organization electronically, on paper, or verbally. For example, customer orders may come in electronically, vendor invoices may come in on paper, and competitive information may come in verbally.
Step 2 - Tracking Information Flow
The receipt of a business document or information usually kicks off the generation of subsequent documents by each department accessing the information. These documents may be acknowledgments, invoices, reports, schedules, etc.
The functional manager of each department should answer the following questions for each document:
Step 3 - Evaluating Actions
Identify the primary recipient of the information and any secondary recipients. For example, the primary recipient of the information may be customer service for entry into the business management system. The primary recipient may also be an automated business management system. Any other person or department that needs access to the information would be considered a secondary recipient.
Make a detailed list of the actions taken by the primary recipient as a result of receiving the information. Also, you will need to determine how the information is used to initiate an action. Each of these actions generates some result that is part of the business process, whether it is entry of the information into internal business management systems, routing and filing of paper documents, or packaging and shipping product.
e-Business process design demands that all actions are verified and justified. Involved personnel should be asked how they get the information, what they do with the information, and whether the information is really necessary for them to complete the business process. The objective is to determine why a specific action is performed. For example, if reports are the result of select actions, what format do the reports take, how often are the reports generated, and do the reports provide information that serves as a basis for subsequent actions? Are the reports read as they are produced or are they filed away?
It is important to determine how the results of an action contribute or add value to the benefit of the company. Does the action contribute to the quality of the product or service, to the improvement of customer service, to controlling costs, or to environmental/social responsibility? Actions that serve no identifiable purpose should be eliminated.
Those actions that already possess some form of low-level automation, as well as those that are routine, and therefore receptive to automation, should be identified. Note any action taken which requires human intervention to resolve exceptions, determine the appropriate person to perform that action, and define the steps needed to achieve resolution.
Finally, list all the actions performed by secondary recipients of the information following the same procedures as above.
Step 4 - Defining Decisions
Actions or business processing procedures that require more than simple calculations or the movement of data involve a decision-making process. This decision-making process draws upon the information received, related information from other sources, and the results desired. From experience, training, or common sense, a series of select and logical rules are applied, a decision is made, and an action is initiated.
In this step, define the decision-making rules for routine actions, for actions involving common exceptions, and for actions involving unusual exceptions. The goal is to record the decision-making rules and parameters that lead to each action. This, in turn, provides a template for the possibility of programming the decision-making rules in an electronic environment that could automate that action.
Where such decision-making automation appears impractical, this step still indicates how skilled people should approach the situation and what information they will need to make their decisions.
Step 5 - Validating Data
All the individual pieces of data or information received that require a series of decisions to initiate an action should be reviewed -- whether digital, paper, or verbal. Typically, a paper document includes some information that is redundant or unnecessary. Validating data helps ensure that you are not collecting or processing unnecessary information.
Step 6 - Automating Actions
While a great deal of benefit comes from automating communications with external entities, internal communications and routing of information between departments should also be evaluated, and where possible, automated.
The first step in automating business processes is to convert information to a digital format to allow the information to be extracted, routed, or accessed electronically. The guiding rule governing the automating of business processes is that a person should make no decision or perform a subsequent action, if it can be effectively automated.
The obvious target for automation is the routine action; however, too many organizations stop after that point. Real opportunities lie with automating those groups of business processing actions that fall into the exception category, yet share common limitations or parameters. Hence, the logical progression of automating business processes is to:
1. Automate routine actions.
2. Automate actions involving exceptions that share common, but complex decision-making rules.
3. Automate notification of actions involving unusual exceptions that require human resolution.
4. Automate the access and communication of relevant data to allow human resolution of unusual exceptions.
5. Measure results.
For example, if an order is short-shipped, does the automated system handle the exception by:
Finally, for unusual exceptions requiring human intervention, all information necessary to resolve the exception should be made easy for the employee to locate and access.
Step 7 - Recording New Procedures
At this point, your team should have a blueprint detailing which actions or processing procedures can be automated.
The team should record new departmental procedures (manual and electronic) that result from automating actions. In particular, employee job tasks should be reevaluated. Many of the paper-based clerical tasks (i.e., reconciliation, re-keying, filing, routing, etc.) can be minimized, if not eliminated.
Step 8 - Exploring New Data
One of the more overlooked benefits of becoming an e-business is the availability of additional information that previously might have been impractical to include in paper documents. This might have been due to the physical size restrictions of the paper document, additional re-keying constraints, business management system inflexibility, or database restrictions. Exploring new data is perhaps the most difficult step to achieve in redesigning business processes and systems, yet it is one that can be most fruitful. It requires creative thinking by management and between trading partners. Determining what other actions could be taken to contribute to or add value to the company is the first step in exploring what new data might be beneficial. New information opportunities are usually found in one of four areas:
Step 9 - Business Management Systems Redesign
e-Business transformation will usually result in modifications to the computer and business management systems. An overall plan to develop an IT infrastructure as a platform to support changes and new electronic technologies is necessary. It makes for a smoother implementation process if the IT infrastructure is designed to grow with the redesigned systems -- this helps avoid redesigning systems with the phase-in of each electronic technology.
These nine steps are the basics for assessing the information that moves into and out of your company. It doesn't matter if your company is in the initial stages of e-business transformation or has been trading information electronically for years. Evaluating your information flows as outlined above will assist you in getting the maximum benefit from your information streams. This, in turn will help your organization progress toward becoming an e-business that can attain the maximum benefit from e-commerce.