Business Process Improvement
Technology is noted under various frameworks for analyzing the effect of the macro environment on the specific strategies that are adopted by businesses as one of the key variables affecting business operations. Technology has generally revolutionized how businesses view their internal strategies and the specific strategies that they employ in improving their internal capabilities (Kaltoft, Boer, Chapman, Gertsen, &Nielsen, 2006). Business process improvement initiative which focuses on improving strategies that are used in controlling and organizing processes within organizations are increasingly adopting technology. This research paper reviews the existing peer reviewed literature as it tackles business process improvement initiatives.
The definition of a good process design is increasingly placing more emphasis on risks management and internal controls. This is a result of change in technology that forces business to change their overall view of risk management as parts of efforts aimed at improving their overall processes. The risk of redundant system or simply legacy systems cannot be afforded by functional businesses considering the effect that poor systems have on operations, upgrades and implementation of up to date security and risk management features (Grant, 2008).
Another important dimension of the increased focus on risk assessments and implementation of internal controls is the inclusion
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Businesses are increasingly taking advantage of processes initiatives which include IT enabled approaches to risk management and internal controls. However, recent research shows that in most cases the IT department is not often in sync with the financial department and lacks a thorough understanding of businesses processes. It is noteworthy that this is a great threat especially if a businesses wishes to base its risk management and internal control on information technology. Business process initiatives and process controls are required to create collaborative relationship between IT and other business units (Kaltoft, Boer, Chapman, Gertsen, &Nielsen, 2006).
This relationship is important for problem definition and ensuring that the systems requirements are accurately captured thus the development of IT based processes that are relevant to the needs of varied departments. Workforce management and exception alerts are included in business process initiatives as part of efforts aimed at dealing with the associated risks and meeting the high levels of organization required in business process initiatives.
A business process can be looked at as a set of interlinked activities that help in the creation of value by transforming input into valuable outputs. It is noteworthy that in business process the inputs can be artifacts or information and the transformation can be perpetrated by humans or machine actors. An important aspect in business process initiative is developing a clear picture of where a business is headed and documenting the current state of operations (Kaltoft, Boer, Chapman, Gertsen, &Nielsen, 2006). Such strategies help determine what is lacking with respect to attaining set objectives and measures that businesses can use to move towards set goals.
The process level analysis of business operations is vital for it helps breakdown large operations as consumers, inputs and outputs are determined. This low level analysis of business operations helps ensure that every process is captured and all entities that are involved in change within an organizations are noted. Furthermore, the process level abstraction of business operations helps ensure equal consideration or developing a balance between speed, cost, risk and control which can be evaluated at every point. The process level modeling of business operations also helps businesses determine how they can respond to changes through understanding the variables that trigger change within the organization.
There are various frameworks that businesses can use in breaking down their operations. Use of the framework ensures that the breakdown is done correctly thus minimizing the risk of ignoring components that are important in analyzing the changes or internal strategies that businesses have to implement to attain their set objectives or change goals.
Risks and internal controls are vital aspects in business process initiatives that help in ensuring that various uncertainties associated with such measures are addressed. Businesses operate in highly dynamic operational environment and every strategy has an implication on the capability and positioning of a business within its industry and market segment (Brandon, 2005). Since strategies affect internal business operations, firms have to ensure that they develop robust internal systems to handle risks. Risk and internal controls is a wide initiative that requires a clear definition of the control objectives that guide in the definition of control processes.
The effectiveness and efficiency of business operations is also an important measure in ensuring that internal processes are well managed and lead to optimal results (Brandon, 2005). Other important considerations in control include ensuring the reliability of financial reporting and compliance with applicable laws and regulations. There are various activities involved in risk and internal controls which are central to the high demands by such processes.
The varied components which include the control environment, risk assessment, control activities, monitoring and information and communication further complicate internal control and risk management (Ramesh, Jain, Nissen, & Peng, 2005). The varied processes each has to be considered and relevant strategies developed to ensure that businesses are operating optimally.
Addressing specific risks that are characteristic of an organization is also important in risks and internal control. Maintaining or developing a firms reputations, banks covenant coverage, perishability, competitive obsolesce, kitting component obsolesce, employee skill and turnover, demand downturn, transport interruption, political risk and currency risk have to be all considered in internal and risk controls. The implementation of effective change management strategies and appreciation of the multitude of risks associated with business process initiatives is vital in ensuring that they are all addressed.
Effective internal change management strategies help in ensuring that every risk that is specific to an organization or emanating from business process initiatives are well managed and critically addressed. Appreciation and understanding of the potential risks is a requirement in developing effective internal strategies that will guard business processes against the varied risks (Thawesaengskulthai, & Tannock, 2008). Proper leadership and management which emphasize on the inclusion of effective change management strategies is also a requirement in ensuring that varied risks and threats are mitigated.
Replenishing specific control also help strengthen the risks management systems in business process initiatives. Exception reporting is widely considered a key requirement in business process initiatives. Other important strategies aimed at replenishing specific controls include ABC classification, cycle counting, 2nd level review, vendor analysis and economic outlook analysis. Under general business considerations, there is high emphasis placed on evaluation of the progress that has been made as a result of the implementation of clearly defined goals.
In fact, evaluation plays a central role in improving the levels of motivation, implementation of corrective measures and documentation of the strategies that have been implemented by an organization (Thawesaengskulthai, & Tannock, 2008). The specific internal controls play vital roles in ensuring that evaluation strategies are ported into business process initiatives. Furthermore, the measures help in actual mitigation of the risks faced in improving business processes.
Varied process disciplines have been formulated and can be used by businesses in their improvement initiatives. Most process disciplines are portrayed as models; this eases consideration on the processes and resources required to ensure full implementation of the varied requirements. Moreover businesses can take on varied process discipline such as reengineering, management, improvement and automation for they are all important in maximizing gains that businesses can make out of harnessing their resources.
Other important process initiatives that are increasingly being adopted by businesses include corporate performance management, six sigma, lean manufacturing and lean six sigma. It is noteworthy that the last three process initiatives focus on improving the overall quality of the processes and therefore outputs (Thawesaengskulthai, & Tannock, 2008).
Though the process disciplines differ in their naming and area of emphasis, they share a number of critical features that may help in their concurrent executions within functional businesses. All business process initiatives are based on modeling, design, development testing, monitoring and are circular which highlights continuity. A critical review of the shared characteristics reveals that they have some significance on the actual strategies that business may adopt in their operations (Thawesaengskulthai, & Tannock, 2008). Furthermore, there is high conformance to the requirements in strategic management and project implementation in the business process initiatives. This implies that the requirements in strategic management hold true for business process initiatives which is expected considering that both aim at improving internal capabilities of a business.
The incorporation of technology in business process initiatives does not result in the elimination or disregard of requirements that have been highlighted. Technology in business process initiatives helps facilitate the execution of varied process and therefore is an enabler. This implies that technology does not eliminate the risks involved or considerations in evaluating risks rather it provide an effective platform for addressing various control requirements. Incorporation of technology in business process initiatives imply that business must put in place measures to address the risks and threats associated with the use of technology.
However, most researchers are of the view that the use of technology can considerably improve the execution of the processes involved in the improvement initiatives. Use of extensive information system that include proper information management systems such as databases help mitigate common risks associated with information systems whereas providing centralized management. Proper programming and use of systems wide centralized systems for instance ERP systems may also go a long way in improving workflow and exception alerts.
Exception alerts are important in determining the cause of errors and improving different levels of security. Exceptions alerts may help in storage of information on the forms of errors handled by a system which is important in highlighting specific measures that organization should adopts to improve internal control. Workflow management is made easy by use of databases and system wide strategies that allow for knowledge sharing and overall view of organizational processes (Bendell, 2005).
Such strategies help ensure a comprehensive view of the processes, outputs and inputs thus facilitating modeling and other processes that often complicate business operations. Furthermore, alerts can be designed such that the process initiatives are well monitored and controlled. The inclusion of technology in business process initiatives has been facilitated by development in web technology, scripting languages and knowledge of computing and IT.
Use of technology does not guarantee success unless a number of key threats emanating from its use are addressed by businesses. Change management is an important aspect in the inclusion of technology in modeling, designing, controlling and even implementing business process controls. Not every business will welcome the use of technology in the same manner (Juan, & Ou-Yang, 2005). This differential is a result of the level of experience in using technology, past experiences in use of technology and change management strategies that have been ported into the initiatives.
Consideration on change management initiatives is therefore important in ensuring that technology is ported and used well in business processes. Another variable that businesses have to consider is IT and business requirements. It is noteworthy that IT in business process initiatives is an enabler or a facilitator and therefore emphasis should be on business considerations. This is of critical importance because the lure of technology may force organizations into developing systems that they do not need. Inclusion of proper project management strategies is another point of failure in the inclusion of technology in business process initiatives (Faulk, 2006).
The implementation of business project initiative takes on a project approach that requires the inclusion of proper support from the top management. Failure to incorporate relevant support systems such as effective leadership, adequate resource allocation, proper management and effective communication may impede the use of technology in business process initiatives.
Business process initiatives are on the rise and take on different forms including lean manufacturing and business process reengineering. Technology is increasingly being adopted in the business process initiatives so as to meet the modeling, design, implementation and monitoring requirements. Though the use of technology may help in management of exceptions and improving internal controls, it is associated with varied risks that should be acknowledged and addressed. Proper change and project management strategies come out as key requirements in the inclusion of technology in business process initiatives.
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