Paul W. Lail,CFPIM
is operations service manager for coated/sc papers at International Paper.

Systems and Business Processes

Several years ago, it used to be that a decision to purchase an application system was viewed as supplementary to the business process, or as a way to automate portions of the business process. Often, these systems were "point" solutions that addressed a specific and local need, such as trimming, label printing, dissemination of lab test data, or control of a particular process or piece of equipment. As the depth and breadth of the applications that are addressed by systems has expanded, something quite remarkable has happened in the relationship between application systems and the business processes they support. The past 15 to 20 years have witnessed a merging and blurring between systems and business processes. The change has been so profound that, today, major business process changes cannot be considered apart from supporting systems.

Last September, I attended the Council of Logistics Management conference. This was a large conference, with 6,000 attendees and 230 educational sessions over a four-day period. After looking over the agenda, I counted the number of speakers whose primary subject was an information technology (IT)-related topic. An astounding 55% of sessions were IT-related. Systems-related talks ranged from using systems for measuring logistics performance, to e-business, to using technology to collaborate with customers, suppliers, and others in the supply chain. The importance of IT to the business cannot be underestimated. In fact, systems decisions are becoming more and more one of the most critical decisions that a business area makes. If this were not so, you wouldn't see business conferences so heavily focused on IT topics and projects.

CREATING A BUSINESS/IT PARTNERSHIP. For many years, there has been heightened interest in business process re-engineering. With changing customer and marketplace demands, organizations must continually re-evaluate their processes to find better ways of doing business. What happens when a re-engineering effort identifies process changes and implementation plans are developed? Today, these implementation efforts nearly always involve significant systems changes. In today's working environment, it is usually not an option to increase headcount when business process changes are implemented. And, it is also not acceptable to introduce manual practices into areas that were previously automated. Users do not tolerate for long work practices that increase the time and effort necessary to complete tasks. Tight job markets are increasing the competition for capable employees-employees who do not want most of their energy spent on tedious, manual assignments. If employees are fully consumed in manual, time-consuming activities, this can actually be a detriment to implementing process improvements. The options quickly narrow to solutions requiring systems changes to support the new business practices.

For those working in IT, this increased importance to the business does not come without additional responsibility. IT personnel must appreciate the impact of a system decision on the business. Systems decisions are understandably made with heavy involvement and influence from those working in IT. Often, IT standards, operating principles, or technical recommendations play a big part in these decisions. While there are certainly operating efficiencies and support concerns that come with IT standards, standards must be pursued in such a way as to not compromise business effectiveness. Violation of a standard usually has cost and risk implications, and these should be understood and weighed along with all other business impacts. Hard-and-fast rules can limit options that result in inferior business decisions.

For those working in the business end, there is a need to increasingly understand the role of systems, as well as how use of a system can affect the business. Understanding technology, new technical developments, and systems alternatives are now a prerequisite in many business roles. To implement business process improvements, identifying systems changes necessary to support the new practices are paramount. And managing the impact of these changes on the people involved is a critical role as well. This is why systems-related topics and projects are now playing such a dominant role in business conferences.

All of this points to an increasing need for partnership and effective communication between business and IT personnel. The strength of this relationship influences the effectiveness with which business process improvements and the resulting systems work can be implemented. In the past, I remember many discussions where various systems or IT changes were debated as to whether they were "tactical" or "strategic". The implication was somehow that "strategic" systems should get more effort, discussion, scrutiny against standards, or attention. Well, increasingly, all major systems decisions are strategic. The business practices can simply no longer exist apart from the supporting systems.