university of zagreb faculty of economics and business master study managerial informatics ...

52 Pages·2015·1.26 MB·English

by  Abdulla Primov

UNIVERSITY OF ZAGREB
FACULTY OF ECONOMICS AND BUSINESS
MASTER STUDY MANAGERIAL INFORMATICS

IMPROVING THE EFFICIENCY OF ORGANIZATIONS THROUGH
BUSINESS PROCESS REENGINEERING AND INFORMATION
TECHNOLOGY
Master Thesis

Abdulla Primov

Zagreb, 2015
POBOLJŠANJE UČINKOVITOSTI ORGANIZACIJA PRIMJENOM
REINŽENJERINGA POSLOVNIH PROCESA I INFORMACIJSKE
TEHNOLOGIJE
Master Thesis

Student: Abdulla Primov
Student number: 0067535937
Supervisor: Prof.dr.sc. Vesna Bosilj Vukšić

Zagreb, 2015
______________________________
Name and family name of student

STATEMENT ON ACADEMIC INTEGRITY

I hereby declare and confirm with my signature that the _____________________________ is
exclusively the result of my own autonomous work based on my research and literature
published, which is seen in the notes and bibliography used.

I also declare that no part of the paper submitted has been made in an inappropriate way, whether
by plagiarizing or infringing on any third person's copyright.

Finally, I declare that no part of the paper submitted has been used for any other paper in another
higher education institution, research institution or educational institution.

Zagreb, _____________ Student: ______________________
ACKNOWLEDGEMENTS

I would like to extend my sincerest thanks and regards to all those who supports and encouraged me
during my study. I wish to express my gratitude to these people.

Foremost, my special thanks to my first supervisor Prof. dr. sc. Vesna Bosilj Vukšić for her guidance
and scientific advices during my study. I am very thankful for her critical comments that greatly
improved this work. Her help, suggestions and encouragement helped me in writing of this thesis.

Moreover, I am also grateful to my co-supervisors Prof. dr. sc. Katarina Ćurko and Doc. dr. sc.
Nikola Vlahović for their valuable advices, constant encouragement and enthusiasm during all
stages of this work.

I would like to express my sincere thanks to the coordinator of this Master Program Prof. dr. sc.
Mario Spremić, and other professors of Managerial Informatics department of the Economics and
Business Faculty for their assistance and friendly atmosphere during my studies.

I also wish to express my wholehearted appreciation for the InDeCA project (Designing Social
Institutions in Transition: Promotion of institutional development of common pool resources
management in Central Asia) at Humboldt University of Berlin (Germany) for hosting me during
my internship period from June until September, 2015. The project is financed by
VolkswagenStiftung.

I wish to express my sincere thanks to my family for their constant love and support throughout this
study. Furthermore, my deepest thanks to my sister and brother in-law who provided me with
inspiration and encouragement.

Finally, I would like to thank everybody else who contributed in one way or another to the
completion of this study.

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TABLE OF CONTENTS

ACKNOWLEDGEMENTS......................................................................................................... iv
TABLE OF CONTENTS.............................................................................................................. v
LIST OF FIGURES .................................................................................................................... vii
LIST OF TABLES ..................................................................................................................... viii
LIST OF ABBREVIATIONS ..................................................................................................... ix
1. INTRODUCTION ..................................................................................................................... 1
1.1 Topic and goals of the thesis ................................................................................................. 1
1.2 Explanation of methodology ................................................................................................. 1
1.3 Structure of the Thesis ........................................................................................................... 2
2. THEORETICAL FRAMEWORK .......................................................................................... 4
2.1 Reengineering ........................................................................................................................ 4
2.2 Business Process.................................................................................................................... 5
2.3 Business Process Reengineering ........................................................................................... 6
2.4 BPR characteristics................................................................................................................ 8
2.5 BPR approach ........................................................................................................................ 9
2.6 Theoretical Framework of BPR and Organizations Performance ....................................... 11
2.7 Business Process Redesign .................................................................................................. 12
2.8 Total Quality Management .................................................................................................. 13
3. RELATIONSHIP between INFORMATION TECHNOLOGY and BPR ........................ 15
3.1 Role of IT on BPR ............................................................................................................... 15
3.2 Impact of IT on BPR ........................................................................................................... 16
3.3 The benefits of IT – enabled BPR ....................................................................................... 16
3.4 IT tools for BPR .................................................................................................................. 19
3.4.1 Enterprise Resource Planning ....................................................................................... 19
3.4.2 Outsourcing ................................................................................................................... 20
3.4.3 Enterprise Software ...................................................................................................... 20
3.4.4 Internet .......................................................................................................................... 21
3.4.5 Intranet .......................................................................................................................... 21
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3.4.6 Electronic Data Interchange ......................................................................................... 22
4. CASE STUDY “UZDONMAHSULOT” JOINT-STOCK COMPANY ............................ 23
4.1 General information on the company .................................................................................. 23
4.2 Organizational structure of the company ............................................................................ 24
4.3 Main activities of the company ........................................................................................... 26
5. THE AS-IS PROCESS ........................................................................................................... 27
5.1 The As-Is process model ..................................................................................................... 27
5.2 Analysis of as-is cycle time ................................................................................................. 28
5.3 Workload ............................................................................................................................. 29
6. IMPROVING THE PROCESS.............................................................................................. 30
6.1 Brainstorming for process improvement suggestions ......................................................... 30
6.2 COPAFILT analysis ............................................................................................................ 31
6.3 Evaluation matrix ................................................................................................................ 32
7. THE TO-BE PROCESS ......................................................................................................... 33
7.1 Description of the chosen solution ...................................................................................... 33
7.2 The To-Be process model.................................................................................................... 33
7.3 Analysis of to-be cycle time ................................................................................................ 34
7.4 Cost-benefit analysis of to-be process ................................................................................. 35
8. CONCLUSION........................................................................................................................ 37
REFERENCES ............................................................................................................................ 39
APPENDIX A .............................................................................................................................. 42
APPENDIX B .............................................................................................................................. 43

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LIST OF FIGURES
Figure 1. Outline of the thesis ......................................................................................................... 3
Figure 2.. Reengineering drives many changes .............................................................................. 5
Figure 3. Business Process Reengineering main activities ............................................................. 8
Figure 4. Overview of the Research Model .................................................................................. 11
Figure 5. Kobu Conceptual Model ................................................................................................ 18
Figure 6. Organizational structure of the company ....................................................................... 24
Figure 7. The company’s enterprises in Uzbekistan ..................................................................... 25
Figure 8. The As-Is process model ............................................................................................... 28
Figure 9. Brainstorm mind-map .................................................................................................... 30
Figure 10. Evaluation matrix with five idea groups...................................................................... 32
Figure 11. The To-Be process model ............................................................................................ 34

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LIST OF TABLES

Table 1. IT capabilities and their organizational impact ............................................................... 10
Table 2. Activity times and cycle time ......................................................................................... 29
Table 3. COPAFILT assessment with + and - indicating positive or negative consequence ....... 31
Table 4. Activity times and cycle time for the to-be process ........................................................ 35
Table 5. Cost-benefit analysis of to-be process ............................................................................ 35

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LIST OF ABBREVIATIONS

BPM - Business Process Management
BPR - Business Process Reengenering
BPR - Business Process Redesign
CSA - Customer Service Activity
EDI - Electronic Data Interchange
ERP - Enterprise Resource Planning
JSC - Joint Stock Company
IS - Information System
IT - Information Technology
SAP - Systems, Applications, and Products
TQM - Total Quality Management

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1. INTRODUCTION
1.1 Topic and goals of the thesis
Nowadays, the efficient IT system is the base of functioning of all kinds of companies as well as
public organizations. Effective IT system helps companies to reduce operational costs, improve
the quality of the customer service and eventually allows further development and expansion of
new markets.

The aim of this thesis is to present the business processes of the “Uzdonmahsulot” joint-stock
company, emphasize the existing problems with IT systems and, on the basis of these
observations, provide the possible ways of business process reengineering. Due to the features of
offered solutions it is possible to introduce them, both in private companies and public
organizations.

Taking everything into account the number of improvements were listed in the paper. The
changes mentioned in the thesis will help managers to generate additional benefits for the
company, like improving accounting system, documents, flow in the company, communication
between entities of the company, decreasing queues and customers’ average time of waiting and
reducing costs of operational activities of the company. As the result, the “Uzdonmahsulot”
company will increase effectiveness and profits, experience positive changes in organizational
approach and finally will receive an efficient tool to develop the business.
1.2 Explanation of methodology
The theoretical part of this Master thesis is based on the usage of available literature; textbooks,
reports, journal publications and statistical data, which are available in the library of the Faculty
of Economics and Business, Zagreb, in the National University Library, Zagreb and also the
source of all of this literature was mostly the internet where all of the articles and publications
can be found.
The rest of the necessary information was taken from official company website.
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