BPM. Outsmart your enemy Before They Destroy You. Graduate School of Management KAIST

Transcription

1 BPM? Outsmart your enemy Before They Destroy You Graduate School of Management KAIST

2 Agenda 1. New Business Model 2. BPM: Built to Learn and to Execute 3. BPM Trends and Challenges 4. Conclusion 2

3 Red Queen 3

4 Case of Sears Fortune, 1964 How did Sears do it? everybody in its organization simply did the right thing, easily and naturally. Sears pioneered SCM, store brands, catalogue retailing and credit card sales. Seeds of failure were already planted in 1960s when discounted stores emerged and credit cards boomed. 4

5 M. Porter s View, Who makes money and why? Changing Social Values Technology Substitutes Regulatory Environment Buyers Rivals Suppliers Economic Changes New Entrants Demographic Changes Why A Firm Does or Doesn t Make Money? (Macro Environment) (Industry Structure) 5

6 ? - Quizzes Fortune Global 500 Quizzes Which has grown faster since 1997: Intel or inflation? When Chris Galvin become Motorola s CEO in 1997, the company earned more than $ 1 billion a year. By ho much have the corporation s profits since exceeded Galvin s compensation? Galvin took home $45 M but Motorola has kept bleeding IBM Lou Gerstner turned declining IBM into service oriented company and grew at double-digit rates? Only 2.9% during his 10 year tenure. 6

7 Dell & PC Internet, IT, : Threat of substitutes Bargaining power of suppliers : Intel, Microsoft : IBM, Compaq, Apple, Gateway, HP,. Bargaining power of buyers : Threat of new entrants : 7

8 Dell, Compaq, 1984, 1 Direct Sell 8

9 Internet Bookstore WWW : Threat of substitutes Bargaining power of suppliers : : Bargaining power of buyers : Threat of new entrants : 9

10 Amazon.com vs. Barnes and Noble Amazon no brick and mortar 1996 : $15.7 mil 2002 : $3.9 billion Barnes and Noble 1,000 bookstores $2.5 billion $5.3 billion 1996 : 1996 : $61k/person (256) $102k/person (24k) 2002 : 2002 : $524k/person (7.5k) $105k/person (50k) 10

11 ? 11

12 Changes in Business Models Improve Efficiency in Operation Discernable Change Reconfiguration Value Chain Significan t Change Change Rules of Game Transform -ation Processes Management Systems Organization Structure Culture 30% Cost (P. Draker). 12

13 Winners and Losers.. No Rocket Science! IBM, Compaq, HP Dell 13

14 Dell? 14

15 Why only Dell? New Business Model BPR PI. DNA Process 15

16 Wal-mart s Cost Advantage Cost Item Store rental expense Ad expense Payroll expense Shrinkage expense Distribution Expense Cost Drivers Store location Brand Reputation Employee Loyalty Distribution/Logistics System 4.5% (1%= $500 M). Source: D. Collis, Corporate Strategy,

17 Innovation Portfolio Value Matrix Efficiency & Customer Loyalty New Value Creation High Business Criticality Operational Excellence Reduce Expenses Increase Margins Breakthrough Strategies Market Growth & Share Low New Fundamentals Rational Experimentation Low High 17 Innovation/Value

18 Develop DNA for your business model Built to Learn 18

19 19

20 Agenda 1. New Business Model 2. BPM: Built to Learn and to Execute 3. BPM Trends and Challenges 4. Conclusion 20

21 Right Decision and Execution, not Right Information 21

22 Most of Organization with old IT 22

23 Today s Pressure 23

24 Today s Pressure! 24

25 Where waiting takes place? People FAX IS Documents Data Applications 25

26 ? People FAX IS Documents Data Applications 26

27 BIG, really BIG question 27

28 IT is everywhere in your firm 28

29 IT Matters? Troubled reports continue 29

30 Carr s Argument 30

31 IT: Evil curse to firms? 31

32 Best-Practice, Vendor-side Innovation 32

33 Agenda 1. New Business Model 2. BPM: Built to Learn and to Execute 3. BPM Trends and Challenges 4. Conclusion 33

34 BPM Process Identification Business Model DNA 34

35 MetaCapitalism Push Focus BRAND CAPITAL Pull Focus Production Focus HUMAN CAPITAL Customer Focus High WORKING CAPITAL Low High PHYSICAL CAPITAL Low (Outsourced Network) 35

36 BPM Goal 36

37 Trends and Directions (ERP, CRM) BPMS/RTE BPMS Cross-Functional Process Integration BPMS Tool Internal Process Value Chain Process Optimization Customer Centric BPM Lean Consumption BPM Packaged Processes (Vendor Applications) 37

38 From 4P to 4R 4P Product Price USP (Unique Selling Points) Price War Promotion Place Battle for Eyeballs No time for Shopping Next Economy - Elliott Ettenberg 4R Relationship( ) -, Retrenchment ( ) Technology, Relevance ( ), ( ) Rewards ( )- stature ( ), (time) 38

39 Customer Driven BPM Harvard Business Review, May

40 Car Fix Before & After Lean 40

41 Car Fix Before & After Lean 41

42 Car Fix Before & After Lean 42

43 Agenda 1. New Business Model 2. BPM: Built to Learn and to Execute 3. BPM Trends and Challenges 4. Conclusion 43

44 ... The End... Thank you very much Byungtae Lee, KAIST