1. Business Environment Trends
The increasing turbulence of the business environment in deliverable outputs (market globalisation, change in structure and demand attributes, competition) as well as in the utilisation of human, material and information resources (availability and their price), urge companies with greater vigour to accommodate flexibly their structure and processes with respect to changing conditions.
Nowadays the flexible accommodation is an inevitable precondition of each company's prosperity, which, with reference to the prosperity scale, differentiate from each other in accordance with the partial change attributes:
- Time necessary for change (T)
- Cost incurred by change (C)
- Ability of concurrent change and sustainability of eventual expansion of the company output (E)
Until recently SMEs were flatly classified as "flexible" while the big enterprises as "less flexible". This evaluation was adopted to reflect the time necessary for the implementation of changes in the course of random changes of the last century. However, in the course of the current permanent changes cost incurred by such changes has also become an essential factor besides the time. Some market sensitive innovative SMEs must spend as much as 60% of their transaction costs for permanent change processes. With regards to big enterprises this ratio is, however, less but with reference to the absolute value it represents considerable expenses. Such high and steadily increasing cost of permanent restructuring and herewith the price growth of products ironically lead to loss of competitiveness, which strikes back and results in the inability to sustain the expansion of the company output.
Consequently, the most recent task of current innovative companies is to minimize the product of T x C as a direct proportion of profit loss with reference to the competitiveness decline in the course of time T and as an inverse proportion of expandability (E).
As a response to the management science to those recently emerged sensitive spots of business activity development, Business Process Management (BPM) has come to light bringing along process design methods and tools, change and automation. In most cases it has been proved that the main target of changes is the set of processes, the so-called Company Process Map (CPM). The change and optimisation of the CPM is, however, only one of the steps in the change sequence. Without information and knowledge support of process users and operators, these CPMs represent dead corporate equity only.
2. Novitech Solution: p-Business Ring
Since 2001 in compliance with these scientific achievements and practical experiences, Novitech has been developing an integrated business innovation model: the so-called p-Business Ring. Since 2002 this solution is being gradually implemented with key reference customers. According to the p-Business Ring the innovation cycle consists of the following main phases (process components):
Fig.1 p-Business Ring
pB0: Corporate Knowledge Base:
It contains the structured specification of all the current knowledge on corporate management and operation. Its content is being set up by individual process components ranging from pB1 until pB6 or imported from libraries of best business practices. For instance the quality management domain of ISO 9001. This central component constitutes a genetic code of company intelligence.
pB1: Process Map Development and Update:
Targets' definition/change of enterprising and processes to ensure these targets. Human and technical resources to be assigned to these processes. Specification of information inputs and outputs, cost and time metrics to measure these processes. While the pB1 generally exceeds the corporate set-up as it also includes partners´ processes i.e. suppliers and customers. This component is to specify what is to be executed as well as the tie-up of respective activities.
pB2: Application Integration:
Specification of the information flow to ensure the execution of processes defined in pB1. The information flow can be ensured technically (by technical equipment, software) or by a human being (decision making processes). Important principle: means of implementation are assigned to processes and not processes to available technical or software architecture. This component outlines how technically to ensure the activities defined in pB1 and how to resolve the flow and storage of data and documents.
pB3: Learn Process:
It is a process of selective transformation of pB0 content which is kept permanently updated for use of the given participant of the business process in an extent necessary to perform the respective operation, which lies within his scope of activity. This knowledge update must always take place as a consequence of changes in pB1 or the implementation of processes (pB2) with respect to the participant. It is actually a dynamic learning of changes, which have taken place in the business process.
pB4: Performance Support:
This process component is constituted by the human entity and its empirics that help the process participants to perfect their non-structured knowledge, which is not specified in pB0. It also helps to navigate within pB0 and to resolve production system operating problems (pB5).
pB5: Production System:
This process component ensures continuous transformation of pB0 content up to the final product, which is being produced by the enterprising entity upon market demand for its customers. In general this component contains tangible and intangible processes (information system) connected with production of the final product. In case the final product is of "Service" nature this component contains the system information only. Data and information related to the operation of this component are also being administered in the pB0.
pB6: Process Evaluation:
It is a permanent process analysing financial, qualitative and logistic attributes of the p-Ring events in order to optimize the chain of pB1 to pB5 i.e. to minimize the product of T x C. Examples of analytical processes: (i) source adequacy with respect to the actual performance time, (ii) process and resource bottlenecks (iii) cost of particular innovation and production processes, (iv) content documentation quality and its availability in pB0, etc. By virtue of synthesis of those partial analyses, the Balance ScoreCard of business processes comes into being, which represents simultaneously an input for the further innovation cycle
3. Benefits of the Novitech Solution
The aforementioned p-Business Ring technology constitutes an integral and consistent innovation cycle of the company's business processes. The model integrity consists of the idea of business processes as an interactivity of:
The consistency of the innovation cycle is being ensured through the transfer of knowledge among the respective components of pBx through the common corporate knowledge base (pB0).
Besides these benefits, while consistently applying the same within the company, this innovation technology brings the following competitive advantages for an agile and creative company:
a) Ability of the company to respond flexibly to market demand changes through the restructuring of its internal activities i.e. the company becomes capable of permanent restructuring as soon as the ambient turbulence requires the same.
b) Complex mastering of this restructuring with reasonable expenses
c) Ability of incremental formation and optimisation of corporate intelligence - the establishment of structured and consistent pB0. An important by-product of the p-Business Ring technology is a transparent description of company business processes and competency roles, which are essential for ISO 9000 standards.
d) Selective accessibility to pB0 for company employees and partners in order to improve their synergy for synchronised performance of the company's operation
e) Introduction of a company information system architecture, which is being formed and changed in close dependence of the needs and changes of the company's process operation and structure. These so-called process oriented business information systems (p-BIS) are built on new paradigms supporting the activities of the p-Business Ring innovation cycle.
f) Exact specification of the corporate knowledge and process structure enables the application of effective metrics to measure the effectiveness of the company's innovation and production processes. Synthetic review of the company situation in the form of Balanced ScoreCard offers an authentic and current company situation for the top management at any moment.
g) p-Business Ring architecture constitutes a clear topology for company involvement within the so-called Networked e-Businesses by specifying knowledge (needs and trends) and product thresholds (inputs, products, services).
Fig.2. Topology company involvement X within Networked e-Businesses
4. Which business processes are to be facilitated by p-Business Ring?
These principles of the new enterprising architecture and its knowledge and information support can be applicable for any business category where mastering of frequent market changes or technology along with related cost and gains is the key factor of business prosperity.
Companies capable of flexible accommodation and optimization of their process and source structure in tie-up with external effects without considerable loss of its internal energy are known as ambient organisations.
Ambient organisations become the flagship of the information society of this decade.
Benefits of the Novitech solution founded on the p-Business Ring technology are significant for those SMEs, whose strategic core product is based on information services produced by exactly defined operational processes. For instance: financial institutions, project organisation, providers of telecommunication and Internet services, travel agencies, etc.