Business Process Management Dynatrix Pvt. Ltd.

Question: Discuss about the Business Process Management for Dynatrix Pvt. Ltd. Answer: Introduction: To understand the significance of introducing business process management in an organization, it is first necessary to understand what exactly BPM is. For that, one must be very clear about what do we call as business. Here is a basic understanding about the concept. Furthermore, its importance and relevance to Dynatrixs requirements are also elaborated (Smith Fingar, 2003). What is a business? In plain terms, it refers to an entity which works to create value for people who are its customers. But in a critical sense, business is considered as a medium of transformation of a society. This is so because when an organizations objectives are put into action, raw materials are transformed into finished goods that add value to customer satisfaction (Carroll, 1979). What is meant by Business Process Management? Operations team is responsible for improving organizational performance by finding the best possible way of carrying out various business processes. This is what we call as business process management or optimization of business processes. BPM is a mechanism that helps business organizations in attaining efficiency and effectiveness, facilitates change according to the needs of dynamic environment and enhances profitability by impacting cost- revenue aspects of business. (Harmon, 2010) Business processes are very crucial assets of an organization that needs due diligence in formulation of policies for marketing of value- adding goods and services (Zairi, 1997). Significance of BPM approach The essence of BPM lies in the fact that it answers and re- designs all the Ws of business processes. In an organization, What is done, Where it is done, When it is to be done, How it is done, by whom it is done and most importantly, Why it is done are the critical Ws of the business. Managers need to identify appropriate answers to these given questions. BPM is there to assist them in critical analysis of all the business processes and identifying the most optimum manner of performing a particular. BPM follows the principle that there is always one best method of doing a task and that task should be done using that method only. BPM helps in giving an insight of methods and strategies to find that best possible manner and solves most of the worries of business enterprises. Hence, it can be rightly said that BPM is an important aspect of any business as it aims at reducing costs and maximising profits. It is very beneficial for business enterprises if they apply the methods and strate gies in execution of their processes continuously (Trkman, 2010). The following paragraph will explain Mr. Pete what they can achieve using BPM or what BPM will deliver to their business. For any organization to be successful, it is important to take care of customers needs on priority basis. Hence, all the business functions must be appropriately aligned with customers preferences. This is the basic role of BPM. It helps an entity to critically allocate business resources in productive activities. If BPM is executed in an organization sincerely, then it possesses the ability to create visibility in operations and also paves the way for sound financial management. One can achieve tremendous growth in revenue, slow down costs, mitigate risk, enhance productivity, gain customer loyalty and satisfaction, innovation, gain better returns on investments, and competitive advantage. Not only this, BPM will also help in polishing capacity, capital, space, and resource utilisation. All the above cited merits are enough to substantiate that BPM is a critical need of the hour for any business enterprise (Weske, 2010). BPM in context of operations of Dynatrix Pvt. Ltd. This part explains why there is a need of process optimization in Dynatrix Pvt. Ltd. It is evident from the companys past records that it has performed well in its initial years. But subsequently, the company began to lose sales and revenue. The companys major strategy is to perform better than the competitors. Looking at current scenario, the competition is intensely rising due to globalization and liberalisation of economies. For the company to successfully compete with this competition, it must consider re- designing of business processes through BPM. Otherwise, the best situation they can face is losing profits and the worst scenario they can come around is to get acquired by competitors. Innovation dexterity via BPM approach is the only way to enhance their business value in the market (Ward Duray, 2010). Three most vital reasons to opt for BPM in context of the situation of Dynatrix Pvt. Ltd. are highlighted below. Changing business procedures and increasing complexity is one of the major factors to be considered. The companys business involves complex procedures of assembling parts of the machine. Apart from that, daily innovations are there for adding more complexities and they need to change. Hence, a complete transformation is required in the corporate strategies on regular and continuous basis (Champy Cohen, 1995). The company needs to administer their moves in context of enterprise mobility so that they can realise some advantages of economies of scale and brand awareness. The third and most significant factor is the customer. It is rightly said that caveat emptor which means customer is the king of any business. A customer who has purchasing power of such high technology equipment will look for the products availability and accessibility at his doorstep. This gives the need of re- alignment of business processes to gain loyalty and retention of customers (Aladwani, 2001). BPM, in combination with value chain concept In an industry, a business enterprise operates to produce goods or services that add value to customer satisfaction. The set of activities performed by an organization for this production is known as value chain. This concept is a critical component of business management. Improvisation of companys value chain helps in gaining competitive advantage and superior performance. This concept states that a manufacturing firm is a system having various subsystems which deal with companys inputs and transform them into final goods. Five Ms of business resources are required in the processes of acquiring raw materials, transformation processes and selling final output. These Ms are money, material, machine, method and men. Now it depends on the company that how well they can perform the functions of enhancing value chain. This factor holds a crucial place in determining companys cost and revenue. Value chains work as a catalyst to accelerate change in the business processes (Kaplinsky Morris , 2001). Problem Analysis Petes Dynatrix Pvt. Ltd. is facing a lot of problems as evident from the case study. Its problems along with their causes and consequences are discussed below. In addition to those, most urgent problems will also be identified so that Pete can understand the capabilities gap and performance gap in the operations of his company. The * marked problems need urgent change in the organization. We know that the company performed well in its initial years. However, things have changed since 2015. Reduced sales and revenue can be witnessed even in 2016. One of the main reasons is that people think that the companys product is a luxury product and not a necessity. (Kim Ko, 2012) Problem1 Customers mindset is that the product is not necessary for their life. There has never been any effort to inform customers that they need the product in their day- to-day life Problem2 The companys marketing strategy is totally in vain. It completely relies on word- of- mouth marketing, which is highly unreliable strategy (Peter et al., 1999). Problem3 In this modern and high technology work, Pete is using manual subsystems to keep records of purchases, production, accounting, and consumer orders. This is definitely not compatible with high needs of globalised and competitive world. For example, if the company gets a sales order, they check physically whether Dynatrix is available or not. They do not have computerised systems for inventory management that shows correct number of units available in the stock (Breen, 2003). Problem4 Pete has always been in a competitive advantageous position due to the innovation factor in his product. No other competitor is able to match his products design and quality. This is a good sign of attracting consumers in stores, but then customer also wants easy accessibility and availability of the product in the market. The company is not able to respond to customers orders on a timely manner (Burns Stalker, 1961). Problem5 The next problem is excessive paperwork. It is given that accounting department has a piled up stock of papers which keep records of sales order. If they have a computerised system, then they do not need to keep triplicate copies of so many documents. They keep copy of shipping note in their warehouses and dont know where to use them. This is a sheer wastage of time, money and resources. Problem6 Payment period is of 21 days. This means that customers need to pay within 21 days of delivery. The company is incurring all the expenses immediately but are getting revenue after a period of 21 days. Although customers need time to check the device and then make payment to the company but the company should also keep an option of cash on delivery. Every company must remember one thumb rule to maintain liquidity. Revenues must be realised as soon as possible. Payments must be done as later as possible; however, it must not harm the companys reputation. Problem7 Lack of inventory management is another issue of concern. Sales department says that generally they run out of stock. For that, they have to assemble parts of Dynatrix from outside which takes a lot of time. The reason is purchase department is lethargic in giving purchase orders and getting them executed (Silver et al., 1998). Problem8 There is a sort of miscommunication or misperception among three main employees of the company- Nick, James and Bette. An employee, Jan seemed over- confident while others are anxious (Need, 2006). The main cause of all these problems is that Pete has overlooked the need of re- designing business processes. This extra ordinary product needs to be matched with outstanding business processes. The main process flow problem of this company is inventory management because many other problems are related to it. It has become a day- to- day business problem for the company. They do not have inputs readily available when there is a sales order. Hence, they are not able to deliver the output within stipulated period. As a result, business is losing competitive edge and customers. Revenues are also delayed due to delayed delivery (Stock Lambert, 2001). Bizagi modeller software- a brief Bizagi modeller is computer software that helps in designing appropriate models and strategies for business processes mapping and helps in collaboration of all the activities towards one objective. The main advantage of using this software is that it provides the ease of preparing complex flowcharts in an attractive way using a computer system for any business process. This facility was not available to large companies few years back but today, this software enabled easy business mapping for even small entrepreneurs start- ups. This software is especially made for businessmen who are not so familiar with technical terms and coding. Besides that, this software also provides support systems for businesses like video tutorials, user guide, online forums and guidance. Using this software, business enterprises can easily formulate their as is process and to be process, giving efficiency and clarity of operations which helps in identifying skills gap and paves the way to bridge them. The t est version of this software has many new features- cloud collaboration services, storing the processes to be shared across the entire organization and publishing the documents via command prompt (Nafie Talab, 2013; Garcia et al., 2010). As is business process of Dynatrix Pvt. Ltd. This is an approach to jot down the current state of all the business processes that takes place in an organization. It comprises of a model which includes all the business aspects- a brief portrayal, roles and responsibilities, step- by- step sketch of process flows. To prepare an as is model, one needs to access business stakeholders- those who perform functions and those who understand or are affected by those functions. This is vital because when we prepare a flow chart of activities, we need a person to assume that role and responsibility. Once such a draft is prepared, one can find knowledge gaps and take steps to fill those gaps. It is not always necessary to prepare as is process, but it is so in the context of Dynatrix Pvt. Ltd. because mangers need to know everything in detail. A process flow problem is illustrated below using the concept of as is flowchart. This is a process flow problem of the organization which is depicted using as is flowchart approach (tofa Pavlk, 2012) Business Process Architecture Architecture is a discipline which involves designing of a map or an outline of a building. Likewise, business process architecture refers to a blue print of the business processes to give managers an insight about the organization and the needs to re- align business operations with changing needs of the market. So, we can say that a business architect performs the role of bridging the gap between companys as is situation and its to be situation. Dynatrix Pvt. Ltd. has critical need to architect their business processes typically known as process architecture. This will be done by creating flowcharts of the hierarchal positions of the organization. It will give managers an easy to understand view of business processes and identify the areas of improvement (Weske, 2012). To be business process To be process of an organization gives the desired position of the enterprise. It helps in identifying the gaps and states the need and ways of change management. A to be process is depicted below in context of the process flow roadblock of the company discussed above using as is process flowchart. (tofa Pavlk, 2012) Solution considerations As it has already been discussed that one of the major problems faced by the company is lack of efficient inventory management. The company should consider a revision of its policies regarding stock at godown to avoid the issues of liquidity and late delivery. It is highly required that they should consider mathematical models to ascertain optimum order levels and frequency. Customers ask for in- hand availability of products which can be done if delivery period is reduced. This calls for readily available finished goods in warehouse. Hence, as a solution, one can also work on reducing the lead time in production or assembling of inputs. This will improve process flow issues of the company. It is accepted that the company has exceeded its competitors in terms of innovation. However, these considerations will add value to companys USP. They will help in timely availability of the product. Secondly, the companys marketing strategies are totally bizarre. One cannot rely on sophisticated marketing tools like word- of- mouth or publicity. Managers do not even able to realise when these sources go against the companys interest. And, when they realise, half of the game is over then only. So, a well- structured marketing strategy should be considered to position the product in its target market in a different manner. Till date, the product was considered as a luxury item. It must be re- positioned in the market as a necessity good to boost up its demand. Apart from that, the company can also explore new markets for the product. Dynatrix Pty. Ltd. has to survive and compete in the highly technological environment. In such a scenario, to what extent manual administration can hamper growth is evident from the companys case study. Hence, they should consider a computerised accounting system. This change calls for skills training and development of employees. Hence, they should prepare a training plan for this purpose. However, few employees can be recruited from outside to get more talented pool of human resource. In addition to all these resolutions, if the company can revise its supply chain strategies, then it will add much needed flavour to their success. Easy access of the product is equally important as other factors. Hence, more retail stores should be opened to increase the scale of business. Another consideration may be to have online outlets for the product. Besides, above listed factors, communication problem also needs to be resolved. Co- ordination is that string that can bind all the functions of an enterprise together towards a common objective. So, employees should learn to co-operate as well as co-ordinate. Recommendations Introducing ERP ERP stands for enterprise resource planning. It is also computer software. It helps business processes to see a clear picture of what is happening and what should be done with technical, human and material resources. This software integrates all the aspects of a business operation so as to facilitate co- ordination and collaboration in the organization. Pete has an urgent need of such a system in his organization (Holland Light, 1999). Alignment issues Business activities must be properly aligned with long- term mission of the organization. Individual activities must be aligned with departmental functions. Since, in this organization, there is some tension among the employees, there should be an open flow of communication; long- term thought process and agreement on IT arrangements of the organization (Scheer Nttgens, 2000). Co- workers must have mutual understanding and mutual trust with each other Managers must clearly communicate the policies to employees. There should be a support of senior management as well as operational mangers in change process. In change management, it should be kept in mind that external environment is very dynamic and volatile. So, there is a need to enforce change management on a regular basis. Most importantly, there should be clearly explained authority and responsibility relationships. The organization must also have a sound information system (Davenport Short, 1990). References Aladwani, A.M., 2001. Change management strategies for successful ERP implementation. Business Process management journal, 7(3), pp.266-75. Breen, J..S.N.a.C.C., 2003. 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