Task: Preliminary Business Report Your task is to prepare a preliminary business report for Tim. Tim has an in-house style which he expects for business reports, so the main body of your report must be structured using the following headings. An explanation of what each section of the report must address is also provided. Your report will be assessed using the marking criteria shown below: * Presentation * Spelling and Grammar = Quality and use of References Marking Criteria Mark BPM and Strategy 15 Problem Analysis 20 Proposed Solution 20 Solution Considerations 15 Recommendations 10 Overall Quality of the Report 20 Total 100 (will be converted to a mark out of 40) BPM and Strategy Advise Tim why a BPM approach should now become part of the way ‘Tim’s Dynometers’ does business. Introduce Tim to Business Process Management by stating in plain terms what it actually is and how it can help his business In describing the benefits of BPM to Tim, ensure that you briefly highlight how BPM connects to business strategy (internal and external perspectives), positioning, structure and value propositions. Briefly describe the meaning of value chains and how using BPM, in conjunction with this concept, can assist Tim to improve the business. Problem Analysis Tim is aware that there are a number of problems within his company and whilst he is happy for you to briefly describe these, he would like you to concentrate your efforts on the problem which you believe to be the most urgent. In relation to this problem, Tim would like you to identify the causes of the problem, the problem and the consequences of the problem; refer to the capabilities gap and the performance gap here if relevant Show the current ‘As Is’ process using a simple diagram * Identify any process flow problems and/or day to day management problems; output and input problems; and problems with controls and enablers; develop a project scoping diagram to illustrate the problem which you have identified Proposed Solution ® Advise Tim what it means to develop a ‘business process architecture’ and, particularly, how valuable this can be to him and the success of the business * Bridge the identified gap, revealed in the previous section, by describing a ‘To Be’ process; what will the ‘To Be’ process do, or not do, when the change project is rolled out ® Support your ‘To Be’ process with a BPMN process flow diagram (MS Word, PowerPoint or any other simple drawing tool will be fine for this, ie. you don’t have to use a formal BPMN software program such as Tibco, unless you are comfortable with this) ® Are there any key aspects in your proposed solution that you should clearly describe to Tim, for example: SOA; ERP; Master Data; Core, Support and Management processes; alignment issues; etc? Solution Considerations Large BPM driven organisational changes can be extremely valuable, they are also complex undertakings impacting the organisation, its people and its use of modern technologies. = Identify and briefly describe significant considerations that might impact ‘Tim’s Dynometers Pty Ltd’, both during the redesign development stage and upon the implementation of your proposed solution. Some considerations might pertain to the costs of bridging the gap (time, effort, money, etc.), risks, opportunity costs, politics, etc. Recommendations = Provide Tim with a succinct list of recommendations to conclude your report Executive Summaries * Establish the need or problem — highlight or define the business issues and not the technical issues = Recommend the solution — a clear recommendation * Explain the value of the solution — not what it is but its return or benefits to the business = Provide substantiation — say why you or your company is the right one to deliver the solution * Use formatting and graphics to highlight your message — bullet points, headings, diagrams * Keep it clear and to the point — no jargon, proof read carefully, do not cut and paste from the report itself * Use links — if preparing for electronic distribution use word processor technology to link to major themes in the document Written Assignment Administrative Details You may include a brief executive summary, table of contents and brief appendices. Do not include extensive appendices — this is a preliminary report — extensive appendices will result in a reduction of marks, Use the section headings above to structure the main body of your report (you should not need sub-headings). Tim will not read the report if it does not use the above headings in the body of your report. Tim does want to see considerable use of references. While textbook references can be used, Tim would prefer that you use industry research reports, case studies and any other industry-based evidence which can justify why his organisation should implement your proposed BPM solution. You do not need to specify a particular commercial solution (such as SAP or another enterprise system), although you may specify commercial solutions to help you to clarify and support your proposed solution recommendations. The report must be no longer than 2,000 words (approximately 4 to 5 pages of words, but by including diagrams and any other graphics or figures it will be considerably longer. Words in tables are included in the word count of the main body of your report. Note that the 2,000 word count does not include your cover page, your executive summary, your reference list or your appendices. Objective Upon successfully completing this assignment you will have demonstrated that you can provide clear written advice, and recommendations for change, to a business owner, in relation to business process management (BPM). Your advice will offer the business owner several reasons for adopting a business process management approach; ® anexplanation as to what the current business processes are and why they should be redesigned ® a proposed redesign solution ¢ special considerations that need to be taken into account to deliver the solution successfully; and succinct recommendations. In providing your advice to the business owner you will take into account various perspectives and circumstances encompassing the business. Overview of Tim’s Dynometers Pty Ltd Business processes permeate all aspects of business and it is arguable that if a business is not adopting a business process management approach to realise its strategies, and its subsequent goals and objectives, then it may reduce its chances for success - even its very survival. By taking a business process management approach, organisations can improve their chances of succeeding in their quests for sustained competitive advantages through greater efficiencies, quality, innovation and customer responsiveness. In, what is now, a highly competitive, global, interconnected and uncertain business environment, there has never been a better time to draw on the advantages offered by applying the BPM discipline to any business or organisation anywhere. Tim Jonas is in his late forties and is the inventor of the Dynometer. The Dynometer is a ‘hand-held device, similar in appearance to a mobile phone. It sits in the palm of the hand during exercise so that resting and active pulse rates can be easily taken. Among many of its features include a very advanced digital interface, two terabytes of storage capacity, full internet connectivity, an inbuilt heart-rate monitor for resting and active pulse-rate, Vo2 Max oxygen readout, pedometer, blood pressure reader and inbuilt scales recording weight to within S00 grams. As well as these features, the Dynometer includes a database which tracks physical movement during exercise and gives the user immediate access to a ten week integrated personal training and nutrition program. The Dynometer has attracted enormous popularity from a wide range of people in various walks of life but most particularly, with people aged roughly between 25-50 who are interested in maintaining a healthy lifestyle. Tim commenced working on his Dynometer invention during his twenties. His family had a history of medical problems including diabetes, heart failure and obesity and he believed that many of these problems could be prevented if he was able to invent a device which made it easy for people to monitor and continually improve their health. Tim had also seen a number of his close friends develop severe medical problems because they did not pay enough attention to exercise. Following years of development and testing he finally launched his Dynometer in a new business that he established in 2005. Tim’s business is a company called Tim’s Dynometers Pty Ltd. The business manufactures the Dynometers but obtains parts from external suppliers. Most parts suppliers are located in Australia but one is based in Singapore (supplying the Dynometer’s casing) and another in Hong Kong (supplying the digital screen and the Dynometer’s special internal power supply). The Hong Kong supplier is the only company in the world capable of manufacturing these critical components. Tim has built the business to perform most major functions that are typical of a medium sized enterprise. The firm’s organisational structure chart is shown below. Accounting veri NECOrait The departmental directors are named in their respective function boxes in the chart. The number of employees working under each director is shown below the function boxes respectively, The sales function is also charged with marketing and service responsibilities; service requests though are usually referred to the production department. The accounting function is also charged with finance responsibilities, The production function manufactures the Dynometers and manages the warehouse. The firm has a centralised IT function which provides all the firm’s IT needs. Tim’s Dynometers Pty Ltd currently employs 64 individuals, including Tim. The business experienced strong growth in its first few years and this enabled it to grow quickly. In 2011 things started to change. Sales were down and profits reduced (see profit table below). Globally, many businesses were struggling and Tim’s Dynometers felt the impacts of this. Consumers focused on necessities rather than luxuries. Along with this, sales of the Dynometer essentially relied upon word of mouth communication. A solid marketing strategy had not been developed at all. Worse still, Tim had never put much time or effort into developing streamlined and computer based business processes and rather, resorted to many paper based manual methods to get things done, including purchasing material, controlling production, satisfying customer orders and managing all the accounts. ley] 2008 Ply 2010 rls 2012 2013 Revenue $m 2 3 6 7 5 3.5 ? Expenses $m 1 15 3.5 - 3 2 ? Profit $m 1 15 25 3 2 15 ? Tim’s business strategy has always centred on differentiating from potential competitors such as heart rate monitor manufacturers and portable blood pressure unit manufacturers. He underpins this strategy with a focus on quality and customer responsiveness. He realises though that most of his competitive advantage comes from innovation — no other firm has been able to match the Dynometer’s looks and features in a single unit. He also realises that, given a recent rise in customer complaints about delays in receiving orders, his firm’s customer responsiveness is waning and needs redress. Tim wishes to maintain his strategic stance but knows that organisational change must occur urgently if it is to work as intended. Tim decided to hold a meeting with his directors. They assembled during the morning around the board room table and after a morning tea of guava juice, yoghurt and fruit, Tim asked “What happens when a customer places an order for a Dynometer ?” (Tim’s question assumed that the group would understand that a customer might be a wholesale or retail customer or an individual purchasing directly from the company either online (via eBay) or via phone or fax. Tim’s Dynometers Pty Ltd does not have a retail store front). Cath spoke up and said, “well, we write up a sales order form and send it to production.” Jan said, “yep, when we get to the sales order form, usually within a week, we physically check to see if there is a Dynometer (or number of Dynometers) in stock that suits the configuration required (metal, leather or carbon hand straps), if there is, we pack it, label it and write stock details onto the sales form and send it over to Mike’s guys to ship it out and we also send a duplicate copy to Jeff so he can organise the accounts. We keep a triplicate in a box in my office — | guess | should get a filing cabinet one of these days, last week Ross tripped over the box and | had papers all over the place — ah well, we shoved them all back into the box in about two minutes, not a problem! | also keep ‘post it’ notes of sales orders on my office whiteboard — these usually match the triplicates in the box so! don’t need to fiddle with the papers in the box.” When the box is full, we send it to Jeff in Accounting. Then Mike said, “well, when we get the sales order from Cath, we sign it and make notations of the date and time, then, when we pack the order onto one of the trucks for local delivery or get Toll to collect it for interstate or international delivery, we forward the sales order along with a shipping note to Jeff in accounting. We don’t know what he does with it but we’ve always done this. We keep a photocopy of the shipping note in a ring binder in the warehouse office. When the photocopier is broken we just slap a ‘post it’ note on the order in the folder. That sort of works; well, it does work most of the time.” Then Jeff spoke up and said, “when we receive the sales order from Cath we file it and wait for the shipping order to come in from Mike. We usually cross check all sales orders and shipping orders that are sitting on our desks every day to ascertain whether an invoice action can be taken. When we see a sales order and a shipping order for the same sale (which we ascertain by looking at the name of the customer on the order), we send the customer an invoice to the customer’s address, either their shipping or head office address — it doesn’t really matter, we just choose whichever address appears first on the order. Payment terms are net 30 days and the majority of our customers pay within this time which means that there is very little action required in following up debtors.” Tim sighed quietly to himself and then asked, “well, what happens if we haven’t got any suitable Dynometers in stock?” Jan said, “well when we get the sales order from Cath and check for suitable stock, if we find that we’ve run out, we organise a purchase request and send it to James so that we can get the necessary materials to make more. It only takes us a few days to get the purchase request organised and sent.” James then spoke up and said, “when we get the purchase request from Jan, we file it for action so that purchase requests are tended to in order of date received. That's how we prioritise things in my department! When we finally find time to get to the request, we study it and then organise purchase order forms which we complete and send to our respective suppliers. We send these in the surface mail. It usually takes about four weeks before we receive dispatch contirmations and invoices trom our suppliers indicating that our orders have been filled and sent. Then we send the original invoices from our suppliers, with a payment order, to Jeff so that he can organise payment for the materials. Our job is done!” Jeff then said, “when we receive the invoices and payment orders from James, we pay these immediately. We’d hate to ruin our relationships with our suppliers.” Tim sensed tensions between members of the group. He particularly noticed a strong three way tension between Jan, James and Jeff. Cath seemed to be the most positive member of the group, even though sales were down, and whenever she spoke, Tim noticed that all other members of the group became anxious. Tim was beginning to see the consequences of his neglect of the firm’s business processes and sensed that if all of this were to continue, he could be out of business within a couple of years or even sooner. He is confident that the Dynometer can adapt to changing times and will remain very popular for many years to come but he knows that he must match this fantastic product with excellent business processes. Tim calls you in as his BPM Consultant to help make sense of the current organisational approach and to provide some preliminary advice about redesigning processes so that the current downward trend in performance can be reversed. He gives you the transcript of his meeting with his directors (as seen above). He also provides you with some other basic information that he quickly gathered together for you including some Balance Sheet items (to help you to form a view of the firm’s position to invest in change) and some other miscellaneous information which might help you to determine the extent of change necessary. No other information is available to you to develop a solution. Tim states that he has at least been conscious of accumulating some cash reserves for the firm’s development and that it seems the day has come to use some of these! All of this is revealed in the tables shown below. Cash at Bank (based on latest statement found on floor) 3,000,000 Debtors (estimated) 1,000,000 Percentage of debtors outstanding more than 2 months 50% Creditors 500,000 Stock on Hand (based on rough estimate count in warehouse) 120,000 Other Assets (including land, buildings, equipment and vehicles (straight line 4 million depreciation), investments, patents, trademarks and goodwill. Other Liabilities (including bank loans, venture capital) 450,000 Loan expiry and review date 31 January, 2013 Other information (based on Tim’s investigations only; no other information is available) ec Tan) Units/Info _Organisational Personal Computers (Core 2, basic peripherals) 15 Laser Printers (Hewlett Packard, 3 years old) 2 Local Area Network 10 PCs connected Internet Access 10 PCs connected Software — Microsoft Office 2003, Microsoft XP 12 Licences only Telecommunication Networks — Cable available to whole business Cable Telecommunications provider Telstra Some client data are currently held on spreadsheets Excel and Open Office Two MS Access databases hold some data on employees Name, Address, Employee Number and Title only. A Filemaker Pro database on a standalone PC holds some data on the Dynometer configurations and stock holdings; it is out of date Product names, Stock Keeping Unit number, number available Managers are not equipped with mobile devices such as iPhones or Blackberry’s but some have their own mobile phones that they occasionally use on the job. An company intranet has not been established Computer literate staff (basic and intermediate levels; no power users) 8 Total product lines 3 approx. Suppliers (one in Hong Kong, one in Singapore, 6 in Australia — all have 8 approx. Internet access Customers (i.e. retail stores and some distributors) 60 approx. Retail Price for a Dynometer $1000 Cost of producing a Dynometer unit $240 Individual Directors’ salaries p.a. $150,000 Staff's average annual income $50,000 Production time for one Dynometer 8hours