CXO

The business process e-advantage

Using a business-process oriented approach to standard software implementations will give your company an advantage in the world of e-business. ERP expert Dr. Mathias Kirchmer explained what your company needs to know.


On June 9 Dr. Mathias Kirchmer explained what your company needs to know when using a business-process oriented approach to standard software implementations.If you couldn’t join us then, enjoy the transcript and we hope to see you on our next live Guild Meeting.

Note: TechProGuild edits Guild Meeting transcripts for clarity.

Welcome to the Guild Meeting
MODERATOR: Welcome to today's Guild Meeting. We have a very special guest today—Dr. Mathias Kirchmer. Dr. Kirchmer, a renowned expert in designing and implementing business processes, joined IDS Scheer in 1990 as a consultant and project manager. Dr. Kirchmer is now the president of IDS Scheer Inc. He holds Master's degrees in business administration, computer science, and economics. He also holds a Ph.D. in Business Process Oriented Implementation of Standard Software Packages. He has produced numerous publications including a book about business process orientation—of which I will be giving away three copies to the members that ask Dr. Kirchmer the best questions.

Dr. Kirchmer, a recent HP World article was titled "IDS Scheer's Approach, Power Is in the Process." Can you explain the title?

MATHIAS KIRCHMER: In the 90s, companies started to tear down walls within their organizations. That means they implemented intra-enterprise processes, making them more flexible concerning customer requirements and changing markets. Process has given power to individual organizations. In today's world the walls between companies have to be broken down, enabling collaborative new economy business environments, based on the Internet. Inter-enterprise processes give power to the collaborating companies.

Tearing down the walls of a brick-and-mortar company
LADYBUGGIE: Dr. Kirchmer, I'm in the process of transitioning from my traditional brick-and-mortar company to an e-business. Should I change my business processes in any way?

MATHIAS KIRCHMER: Essentially, whether the business is a brick-and-mortar company or an e-business company, they should be following similar principles, which are to identify the goals and objectives and to define the business processes to support them. However, new economy companies will see many more changes in the business environment, due to new product and technology developments. That's why flexibility will be key for successful business processes.

IT doesn't walk down Wall Street
JWALLEN: I have a question for the good Dr. (I think this question might be within the boundaries of his specialty). It seems to me that the IT industry has been given a stranglehold by Wall Street. What I mean is this: Big business looks so heavily toward Wall Street to gauge success and failure that it has trickled down into IT. This means that the people running the IT show are having to implement products that aren't quite the most sound solutions.

MATHIAS KIRCHMER: Do I understand correctly that you basically say that companies buy the application software and information technology that Wall Street likes—not caring about what is really needed in the company?

JWALLEN: Exactly. Often times these packages are not the best solutions, but because they hold market share they are pronounced the "only" solution.

MATHIAS KIRCHMER: In my opinion, many executives try to avoid risks in selecting solutions suggested by Wall Street. If everybody does that, we cannot be wrong in doing the same thing. However, those security strategies will not allow a company to keep up with the speed of the IT and business developments. And sooner or later, those companies will suffer under these security decisions. And then Wall Street will act again and force companies to change strategy in order to keep the share value up.

Understanding ARIS
HALVAH3: Hi, Dr. Kirchmer. I've seen your book on business process and I was wondering if you can tell me what ARIS stands for and a little bit about this framework.

MATHIAS KIRCHMER: ARIS stands for ARchitecture of Integrated information Systems. It is a framework, developed by Professor Scheer, that enables an efficient and effective business process management. During the last six years, ARIS has become an industry standard for the support of analysis, design, implementation, and continuous improvement of business processes. Based on ARIS, IDS Scheer has developed the ARIS Toolset, which according to industry analysts is the leading business process modeling and management tool. The new ARIS E-Business Suite extends the functionality toward inter-enterprise e-business processes.

Understanding the relationship between process modeling and knowledge management
DCILEA: Can process modeling and process management help knowledge management?

MATHIAS KIRCHMER: Process modeling is nothing else than the first step to manage the knowledge around business processes. It helps people understand how things fit together and at which process step they need which knowledge. Therefore I see process modeling as part of knowledge management.
Our Guild Meetings feature top-flight professionals leading discussions on interesting and valuable IT issues. You can find a schedule of Guild Meetings in your weekly TechProGuild Notes TechMail, or on the Guild Meeting calendar.
DCILEA: Why is it that there are so many unsuccessful ERP implementations, and what can a company do to ensure that its project is successful and delivers measurable ROI?

MATHIAS KIRCHMER: Industry analyst groups cite that about 70 percent of all ERP implementations fail. The primary reason for this is because businesses do not have a baseline for their objectives and business needs, as well as the associated business processes, at the onset of the implementation. Before beginning such an initiative, companies need to define their goals and define clearly how future business processes have to be executed in order to support these goals. Also the measurement of business process performance plays a key role in this context. Applications like IDS Scheer's Process Performance Manager help to find out if an ERP implementation has improved the business performance and how specific goals can be reached. Many companies today just do not really know if their ERP implementation was really successful or not. But you get only what you can measure.

Show your support of mySAP.com
ARTUROGALLEA: What is your opinion of mySAP.com?

MATHIAS KIRCHMER: Let's first define what mySAP.com is. On one hand, SAP's e-marketplace is call mySAP.com; on the other hand SAP's whole Internet initiative (including applications like the SCM application APO, B2B applications, or the marketplaces) is called mySAP.com. I will comment on the second definition, because it is the broader one.

In my opinion, the mySAP.com solutions, documented in collaborative e-business scenarios, are much more robust and comprehensive than many people think. And I know that pretty well because IDS Scheer is the co-developer of APO and prime implementation partner. And the feedback from our customers that went live is very positive. The same is true for the B2B procurement. And the business-driven documentation of the c-scenarios in the form of easy-to-understand inter-enterprise process models ensures a very user-friendly entry point into the mySAP.com solutions. However, SAP has a real marketing challenge that must be resolved.

Helping users relate to ERP
ARTUROGALLEA: I consulted on an implementation in which the end users are having difficulty understanding the purpose of ERP. Should I explain the entire business process to them?

MATHIAS KIRCHMER: I think you have already made a good suggestion: Explain the business processes, not just the ERP system. That means, in a first step, help users understand their future working processes. In a second step just explain the parts of the ERP system that are relevant to support the defined company specific business processes. Don't explain the whole ERP system and all processes that can be supported.

Involving employees in process improvement
RORYPLAIRE: Dr. Kirchmer, my name is Rory. Thank you for speaking with us on this important matter. I am in government, and there is a greater resistance to process change than in the corporate world. I was wondering if there is a best-practices to integrate the employees in the reformation of process to deliver on organizational goals?

MATHIAS KIRCHMER: The involvement and commitment of the affected employees is key for the success of any business process improvement and change initiative. I think the corporate world has one big advantage compared to the described government environment: the goal of a process initiative (e.g. reduce cycle times or cost) is easier to understand because it is normally driven through profit or shareholder value aspects.

In a government environment you may have to take some more time and work out the goals of the business process initiative (e.g. better customer service) and help employees understand those goals. Maybe you even have to start with the definition of your products (specific services), which are often not clearly seen as such. Then you can involve employees in the design and implementation of the new processes, just as in the corporate world.
Our Guild Meetings feature top-flight professionals leading discussions on interesting and valuable IT issues. You can find a schedule of Guild Meetings in your weekly TechProGuild Notes TechMail, or on the Guild Meeting calendar.

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