Flying over the boundaries of process reengineering

Flexibility, collaboration, and financial capability have quickly become key business goals for companies today, but if these goals aren't truly embedded in core business processes and corporate culture, they're just watchwords.

Old business processes cannot be left alone, it is imperative to develop new business processes that cross company boundaries. "Loosely coupled business processes" is a step in a new direction.

Extending the process beyond the enterprise

Traditional business processes and roles are often subject to the boundaries of the enterprise and rely on specific information for specific management, which is not uncommon in management reality. On the contrary, in the "loosely coupled business process", it will span multiple companies, such as supply chain management, which spans several levels of an industry; customer relationship management requires the introduction of a professional third party for customer support. Managers and their subordinates must demonstrate sufficient flexibility to use these systems to their fullest potential.

Characteristics of new business processes

"Loosely coupled business processes" are often defined in terms of entities: Which companies should join? What role do each play? and phased results. For example, what must be done within a specified time frame? This business process uses data more selectively and can provide early warning when a business is underperforming. It is precisely because of these characteristics that the roles, rules and method updates involved in "loosely coupled business processes" are completely different from traditional business processes.

Managers whose roles are eager to implement business process reengineering quickly discover that without a clear "head" of a business process—a senior manager with authority, responsibility, and the ability to achieve the intended business benefits people, how difficult it is to make any progress. However, coordinating business activities across multiple companies is more challenging because power is too decentralized. The scope of business processes has become wider and wider, the number and types of companies have increased, and effective coordination is not the ability of one person, requiring many people to complete.

Using the example of a supply chain in the apparel industry, imagine the difficulty of coordinating multiple business activities: raw material supply, specialized weaving and weaving, tailoring and sewing, packaging, and logistics supply services, which must be very flexible The suppliers of all these services are strung together in a way that can meet the individual requirements of designers and buyers. Li & Fung, a Hong Kong trading company with $3.2 billion in sales, is a rising star under competitive pressure, composing an orchestra of complex business processes.

Li & Fung works with designers and buyers to determine the exact mix of collaborators on each garment line. In the process of cooperating with Li & Fung, all other companies are service providers, contributing a part of their expertise in the entire supply chain.

Rules The traditional way for companies to manage business processes is to specify which activities must be done, and then tell managers as much relevant information as possible. Such business processes ensure efficiency, security, and predictability.

And "loosely coupled business process" does not clarify the details of the activities in the business process, but emphasizes the characteristics of the end product at different stages in the process. It does not try to control every step of the activity, but to ensure their performance by selecting qualified service providers and establishing a reasonable reward and punishment system.

Cisco Systems is an example of the application of "loosely coupled business processes" to customer relationship management. It applies these principles to the management of Cisco Connection Online, and the organization mobilizes hundreds of professional channels to provide customers with Personalized service. Cisco Connection Online first assesses customer needs, and then provides customers with a series of accredited service providers, providing services including: consulting, configuration, implementation, installation, training and operation of Cisco equipment. Cisco is clear about the desired outcomes for service providers, giving them appropriate incentives to ensure high quality, but Cisco doesn't control the provider at every step of the process. The structure can be successful given full confidence.

With its flexibility, the "loosely coupled business process" approach unlocks the potential for more and more significant operational improvements because it emphasizes the need for stages in the process and links performance to these stages. The requirements are compared so that their designers can provide a catch-up target.

Toyota has pioneered the business process of cooperation with major suppliers for the auto industry. In its main assembly plant, there is a room dedicated to the centralized meeting of suppliers. Every week, Toyota will The performance of individual suppliers is posted, compared with the staged requirements, which puts a lot of pressure on suppliers, because the gap between actual performance and expected performance is clearly there, and they must quickly shorten and eliminate these gaps.

Supported by Information Technology

This new approach to management requires the full force of IT teams in particular, as they unlock the economic value of technology and enable businesses to succeed in an increasingly competitive environment . To capitalize on this opportunity, IT teams must learn to take on new leadership roles, take an active role in the business, and change the way they interact with CEOs and other top managers.

Today, most industries lack the skills to apply and manage this new technology, one of which is "node enablement", which uses existing IT resources as potential network service resources The second technique is "node management", which manages nodes to ensure availability, reliability, and problem-solving capabilities. The third technique is "service-grid outsourcing", which determines the correct authorization A combination of services, obtained from specialized providers, and ultimately supporting application services. These skills must be effectively integrated into more traditional IT skills such as system architecture, network operations, database management, security management and application integration.

The number of enterprises involved in "loosely coupled business processes" continues to increase, and an important challenge in ensuring effective coordination is how to develop and optimize the concept of "shared meaning" across many enterprises. In some cases, IT teams can develop their own unique capabilities in their own company to support the operation of the entire "loosely coupled business process". General Motors, for example, provides its dealers with information on certain major financial and inventory management applications, hoping to allow them to share certain services.

Large companies like General Motors often find that their powerful IT capabilities are an asset when they work with smaller companies, and letting smaller companies share this wealth is a major attraction to them.

"Loosely coupled business process" also builds a broad platform for information release and knowledge accumulation. The IT team can help capture and release the required information, so that the participants in the process can find the gaps in work and the lack of resources, and a properly designed information flow can improve the short-term business performance and long-term business learning of all participants in the process. Chance.

Web services technology provides looser connections between applications, helping us respond to business needs with greater flexibility and better collaboration. But web service technology is just a method, loose coupling is created under the competitive pressure of globalization, deregulation and trade liberalization today, before moving to a loosely coupled method, you need a super cross service provider identity, Master a different approach to managing business processes, and if you can successfully make this transition, you'll be well-positioned to meet future challenges of flexibility and collaboration.

Original article from Optimize Magazine, December 2001, with permission from CMP Media LLC. Translated by Hong Jing.

John Hagel III is Chief Strategist at 12 Entrepreneuring, a company that solves technology startup business problems, and the author of Net Gain and Net Worth. John Seely Brown is Chief Innovation Officer at 12 Entrepreneuring and Chief Scientist at Xerox.