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TECH TALK: Envisioning the Future: Business Process Re-engineering (Part 2)

April 24th, 2001 · No Comments

The key business processes that will need to be re-engineered for the Internet are procurement, supply chain management and customer interactions.

Procurement is moving on to the web, as companies either set up their own private marketplaces or participate in public, industry exchanges. Reverse Auctions are becoming increasingly common. The attractiveness of the Net stems from the ability to source a wider range of suppliers, eliminating rogue buying and decreasing the paperwork, all of which help in bringing down the cost of purchasing.

Supply chain management and optimisation is about making information about demand and supply to everyone in the chain, thus enabling decentralized decision-making and lower inventory costs. This means trusting suppliers and forging closer relationships with them, and not just increasing the number of suppliers based on who can supply at the lowest price.

Customer Relation Management is also changing because it is now possible to make greater information available to customers and have them interact directly with the company through the Internet (along with other channels). Companies can also do more targeted marketing to customers based on their previous history and profile, thus allowing for differentiation in the way customers are managed.

Besides integration of processes and information, the other big changes which are being brought about in business processes is the ability to get information in real-time across the organization. All entities can now access and interact with information. Employees can find out status of their various requisitions, suppliers can update the status of their deliveries, customers can track the status of their orders. The interesting change here is that the Web enables all of this to happen directly by the entity, via “self-service” forms.

The next few years are also likely to see increasing adoption of the Internet for business by the small and medium enterprises (SMEs), who form an important part of the supply chain for most of the larger organisations. For SMEs, the promise of using enterprise software to manage their processes from Application Service Providers (ASPs) offers an opportunity to get the functionalities of what so far has only been available to the larger companies.

As companies increasingly adopt eBusiness technologies, there will be a need for greater innovation – in products, processes and marketing. The ability to understand trends and bring about radical change will continue to be an art. Technology can create sameness, but cannot replace human creativity.

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Tags: Tech Talk

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