The Conceptual Framework for Business Process Inno

WORKINGPAPERI-2006-02CharlesMøllerTheConceptualFrameworkforBusinessProcessInnovation-TowardsaResearchProgramonGlobalSupplyChainIntelligenceInformaticsResearchGroupCharlesMøller1TheConceptualFrameworkforBusinessProcessInnovationTowardsaResearchProgramonGlobalSupplyChainIntelligenceCharlesMøller,DepartmentofBusinessStudies,AarhusSchoolofBusiness,Denmark,e-mail:[e-mail]roposesaresearchprogramonBusinessProcessInnovation:TowardsGlobalSupplyChainIntelligence.Fewwordsaremoreubiquitousinbusinessorsocietytodaythan“innovation”.Thisreflectsthatbusinessesarestrivingforwaystosurviveandthriveinanincreasinglycomplexandconnectedworld(IBM2006).MostindustrialsupplychainstodayaregloballyscatteredandnearlyallorganizationsrelyontheirEnterpriseInformationSystems(ES)forintegrationandcoordinationoftheiractivities.Inthiscontextinnovationinevitablyisdrivenbyadvancedinformationtechnology.Organizationstodayarerequirednotonlytooperateeffectivebusinessprocessesbuttheyalsoneedtoaccommodatetochangingbusinessconditionsatanincreasingrate.ConsequentlytheabilitytodevelopandimplementnewprocessesdrivenbytheEnterpriseInformationSystemsisacentralcompetenceinmostindustries,andfurthermoreitisacriticalpracticeforaglobalenterprise.ThenextpracticeinGlobalSupplyChainManagementisBusinessProcessInnovation.BusinessProcessInnovationisthetransformationofaglobalsupplychaindrivenbyanewadvancedEnterpriseInformationSystemstechnology.Thistechnologyholdsthepotentialto“closethecontrolloop”,butuntilnowfeworganizationshavemanagedtounleashthefullpotentialofglobalsupplychainintelligence.Thus,thereisanemergingneedformanagingthetransformationandfornewapproachesthatwillleadtorobustglobalsupplychains.PracticesforGlobalSupplyChainsSupplyChainManagementInnovationMediationEnterpriseSystemsManagementTheoreticalFoundationforBusinessProcessesFigure1.FrameworkforBusinessProcessInnovationCharlesMøller2ThispaperpresentsaconceptualframeworkforBusinessProcessInnovation.Aresearchproposalbasedonfiveinterrelatedtopicsisderivedfromtheframework.Theresearchprogramisintendedtoestablishandtodeveloptheconceptualframeworkforbusinessprocessinnovationandtoapplythisframeworkinaglobalsupplychaincontext.Thesetopicsarepresentedinthefollowingsections,butfirstthebackgroundfortheprogramisdiscussed.BackgroundInahyper-competitiveenvironmentcompaniesmustcontinuallyimprovetheirpeople,processes,andtechnologiestocreateacompetitiveadvantage.Theabilitytoaccuratelypredictconsumerdemandcoupledwiththecapabilitytorapidlyreactandreadjusttoenvironmentalchangesandsupplyanddemandfluctuationsseparatesthewinnersfromthelosers(Raietal.2005).Theemergentchallengeandopportunityforanorganizationistoarchitect,designandorchestrateadaptiveglobalsupplychainnetworks.Adaptivesupplychainnetworksexploitinnovationstoimproveefficiencyandresponsivenessandconsistentlyachievetheseobjectives.Furthermoremostglobalsupplychainsarevulnerabletodisruptionslikenaturaldisasters,accidentsandterrorism.Consequentlynotonlysenseandresponse,butalsorobustnessandresilienceareemergingconcernstomostenterprises(Sheffi2005).InnovationisinevitablytiedintotechnologyandespeciallyIT.ModernEnterpriseInformationSystems(ES)fromthemajorvendorssuchasSAP,OracleandMicrosoftcontainvastamountsofnewconceptsandtools,butlet’sfaceit:quiteoftenthesewonderfultoolsareused(andsometimesmisused)tocreatetrivialsolutions.Whyisthat?Maybebecauseweasusersandasorganizationsarenotabletograsptheenormouscomplexityofthetaskofchanginginter-organizationalprocessesspanningglobalsupplychains,numerousorganizationalboundariesandcountlessIT-systems.ThisprogramisfueledbytheideathatthereisahugepotentialcontributioninusingadvancedEStotransformanorganizationandcreateabetteralignmentbetweenbusinessandprocesses.Thisisapracticethatcanbedescribedasbusinessprocessinnovation(BPI).Davenport,PrusakandWilson(Davenportetal.2003)simplifytheinnovationprocessintofoursteps:1)scanningandidentifyingideas;2)packagingtheidea;3)advocatingtheidea;and4)makingithappen.Theycomeupwithtwoextremeroles:the“guru”packagersandthecreative“ideapractitioners”.Thisoutlinesaplaygroundforaninnovatorasamediatorwhotransformsthebigideasintopracticeandmakesitwork.Althoughinnovationtheoriesoftenemphasizetheinnovator´sroleintheprocessChristensen,AnthonyandRoth(2004),otherstakeacompletelydifferentstance.MichaelSchragearguesthattheinnovativeprototypecreatesinnovations,nottheinnovator(Schrage1999).Hispointissimplythattheprocessofworking(andplaying)withtheprototypemodelsismoreimportantthanthedesignprocess.Hisworkillustrateshowleadingenterprisesmasterthismodelingprocessandareabletotransformthelearningintoinnovativeproductsonthemarket.Hismessageissimple:youneedtobeabletomodelyourideas,playwiththemodelsandlearnbydoing(Schrage2004).ResearchapproachThefundamentaltheoreticallensonthisproblemisthesystem´sperspective,i.e.thebusinessprocessisconsideredasaworksystem(Alter2006)andbusinessprocessinnovationisconsideredasystemsengineeringprocess.SystemDevelopmentandinparticularISdevelopmentisawell-knownandmatureperspective.Thispersp