Planning Functionality of an ERP System – Setting up of Planning Engine
In customer centric business environment, it is critical to have an effective plan to manage production capacity, materials availability and shipment schedules. The planning functionality of an ERP system provides organizations the means of meeting such customer centric approach. Planners are able to simulate alternate scenario planning wherefrom they determine which assemblies and components to […]
Linearity and Resolution
Apart from accuracy and precision, there are more factors that determine the soundness of a measurement system. Two of these important factors are as follows: Resolution: Resolution is the ability to see fine details in a system. This ability also gives the system, the ability to distinguish different readings from one another. A good example […]
Components of Commercial Value Chain
Introduction The concept of the value chain was introduced by Michael Porter. The concept helps categories’ activities undertaken by enterprise to deliver a successful product to a customer. The concept since its introduction in 1980s has become a forefront in developing strategies around customer delight and commercial success. The value chain is series of activities […]
Financial Analysis and Planning
Introduction Financial analysis and planning are one of the fundamental activities and responsibility for the finance department. Financial analysis and planning help an organization in achieving strategic tasks and objective within available resources. The key responsibility of financial analysis and planning team is facilitate management in formulating short and long-term objectives, carrying out cost-benefit analysis […]
International Businesses and Resistance to their Activities
Global Capital, Local Resistance The previous articles in this module discussed how international businesses expand into overseas markets both for selling their products as well as to extract the resources in mineral rich countries. We discussed how the international expansion of these businesses has to equitable and follow the rules of justice. What happens when […]
Using Business Process Improvement as a tool to improve internal efficiencies and to bring about the desired changes in business operations has become an accepted practice in most of the Organizations. At a time where the life cycle of products and businesses is becoming shorter and fast changing in line with changes in technology and all round development of Science and technology, BPI becomes an effective tool for Organizations to keep re-inventing themselves to meet with newer challenges every day.
For BPI program to be effective and productive, it has got to be sponsored and managed by the top management or the concerned Business Unit heads. The BPI model and the critical business processes that the program should help manage or change should be identified by the leadership and the desired results or end objectives should also be specified. BPI can be used to improve areas that impact the customers, sales and after sales management or to drive efficiencies in internal business operations or to bring about a change in the operations by automating and using advanced softwares in cross functional and inter departmental processes.
Typically areas like Sales Order Management, Procurement and Inventory management, Sales Invoicing and Revenue recognition as well as logistics etc are few of the important areas that call for regular BPI exercise from time to time.
Organizational leadership or the Executive Improvement Team needs to choose the areas and the processes that need to be covered in the BPI exercise. Amidst several processes and priorities that need to be addressed, Organizations can choose to adopt any particular method to choose the specific business processes. Generally it is seen that the following four methods have been employed by the Organizations in choosing their priorities for BPI program.
In cases where the Organizations or the Business Units are independent and smaller in size, the managements choose to implement BPI in all areas covering all functions and departments thereby enabling the entire Organization to spruce up, increase the overall efficiency and move to the next level. This approach can work provided, the management is able to focus on the program and ensure its implementation throughout the timeline and length of the program without losing out on focus and priority.
Most of the Organizations choose to adopt this approach with the assumption that the Business Unit heads and management know their business, its requirements, its current status and issues faced in the Organizations and therefore would know their priorities well. In such cases the management might choose to improve an internal process to achieve higher efficiency or to reduce the operating costs or select areas and processes that are likely to impact the sales and customer relationship. Depending upon the business area and operations, the exercise might involve anywhere from ten or twenty to a few hundred processes including sub processes, covering several functions as well as departments as well.
If the leadership is faced with several processes and areas of business operations to be overhauled, they might wish to make selection using some kind of measurement or assigning values to each of the priorities and thus choosing the process those scores high. The determinants for rating each of the processes could be chosen depending upon the specific business. Generally the factors considered are likely to include Customer/Market impact, Improved Efficiency, Cost Reduction and Business Impact. Each of the business process when tabulated by giving weight age for all of these factors will show up a table making it easier for management to choose the right priority.
There is no case to argue as to which is the best approach for Organizations to follow. The best and most practical approach could include a combination of any one of the above along with a detailed analysis done by the management and the team of business managers to analyze the external and internal business situations, environment, to identify the critical areas and processes and to outline the need of the hour and choose accordingly.
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