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Business Process and IT - before spending a fortune on new IT consider if your business processes need improvement.
Sometimes it’s hard to see how IT and business process fit together. So here is a simple way of thinking about it.
Business process happens in the real world. We have a hiring process,and a new guy turns up at work. We have an accounts payable process and that tells us to cut a check to pay a vendor. Every day, in a typical business, there are thousands of transactions like these that follow some process or another.
In fact, there are so many, we could not possibly keep track of all this information without help. So, we use computers and that’s why we call it Information Technology.
What IT does for us is create a mathematical model of where we are with all our transactions. The model is a reflection of what is going on in the real world. When we hire people, we add them to the payroll with a social security number and set a salary level. When we cut a check for a vendor we increment the check numbers by one so we don’t confuse the bank. And we update the accounting system so we know what we have spent, and whom we have paid.
We capture all these transactions by reducing them to numbers we store in databases using various different software programs. The same software allows us to retrieve the information, change it, run reports and otherwise mess with it. In other words, the software supports the process by providing the means to create and maintain the mathematical model.
But software does not exist on it’s own. It takes pcs and servers and keyboards and networks and all the other paraphernalia that the guys with the pocket protectors love. So, we need the hardware to run the software.
Now it’s a bit easier to see how this all fits together. The hardware supports the software that supports the processes. This three-layer model is pretty simple. But it’s a good way to think about what’s going on.
When you realize that IT merely supports business processes, then you can start to see that fixing your processes is every bit as important as improving hardware and software. It’s amazing how many smart business people are ready to spend money on improving efficiency with IT projects without getting their processes right first. I hope this model helps you avoid that mistake.
There are lots of ways to improve processes. You can find out more by watching other business process management videos in this series.
Thanks for watching!
I am Ian James, The Process Consultant.