Business Process Management Systems At Boots

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The research I wish to undertake as part of my MBA requirement is the study of Business Process Management Systems at Boots. My work aims to gain deeper insights into the concept of BPMS, understand its organisation and explore possible ways to improve. More specifically, I would be researching on the organisation of this concept from an Operational perspective, study the strategic initiatives, efficiency and the related principles at The Boots Company, UK.

The Boots Company is a premier pharmacy and pharmacy related retailer of the UK. The Boots story dates back to 1849, when it was established by John Boot as a small time pharmacy store. It was his son Jesse Boot who expanded the company and laid the roots for the UK's leading pharmacy-led health and beauty retailer (The Boots Company, 2009). In 1920, Jesse Boot sold his controlling stake in the firm to American Investors. However, deteriorating American economy in the 1930s saw the ownership back to British hands in 1933. Boots has seen growth both organically and inorganically. Along with internal expansion, the company has expanded to be a European retailing major with the acquisition a number of power brands like Timothy Whites and Taylors Ltd and Halfords, among others.

Alliance Boots, the holding company of Boots has widespread geographical reach. It has wholesale pharmaceutical business in The Netherlands, Czech Republic, Norway, Spain, Russia, Italy, France, and the UK. Its retail segment (Boots) has been expanding outside the UK since 1936. Its stores are spread out to as far as the New Zealand, Taiwan, Japan and Thailand, along with a number of countries within the European Union. Its scale of operations is vast. The company's primary business model revolves around leveraging on the economies of scale. It has a full line distribution and wholesale network of 125,000 plus outlets serving 14 countries through over 380 depots. It runs its operations from 3,000 retail units, 2700 of them having a pharmacy.

The company has in the pipeline, a number of attractive opportunities in new geographic markets for expansion. The emerging markets; Brazil, Russia, India and China are its new targets. The group's ability to tap new business opportunities along with its reputation of superior network management with its business partners are expected to be enhanced significantly by leveraging on its superior brand recognition, management expertise and impressive financial statements.

The Concept

To understand the Concept of BPM, we need to look at what does a Business Process mean. A Business Process is a set of integrated and coordinated tasks, both technical and personal, the execution of which leads to the fulfilment of an organizational task. In simple terms, it is the Operations function of an organization. Business Process management is a business thinking which aims at optimizing these Business processes.

Business Process Management can formally be defined as the collection of tools and techniques which integrate business functioning with the customer demands and expectations. It strives to improve business efficiency by focussing on innovation, flexibility and continues improvement. As the primary aim of BPM is to improve organizational performance, it is often referred to as the "process optimization process".

The fundamental thinking of the BPM culture within an organization is that the business processes are strategic assets of a firm and require a thorough understanding, efficient management and continuous improvement for the business to optimize its efficiency. It shares many of its ideologies and concepts with Total Quality Management (TQM) and Business Process Reengineering (BPR).

The BPM Life cycle has five integral stages:

Design:

Designing a Business Process is a complex approach. It involves the identification of existing process (As-Is) and then the design of its future form (To-Be). It involves the fundamental activities of visualising the process flow, identifying the actors within it, and incorporating the management utilities via Service Level Agreements (SLAs), Escalations, Standard Operating Procedures (SOPs), and risk management. Design is the most important phase; effective planning and the implementation of which can avoid many potential problems.

Modelling:

Modelling involves using the theoretical designs made during the design phase and performing a What-If analysis. This involves altering input variables and/or process procedures and studying its effects on the outputs. Modelling may be numeric or descriptive. As an instance, this could take the form of "What is the impact on customer Service if the retail staff is reduced by 20%?" Or, a more numeric case could be "What is the cost cutting achieved by reducing the operational staff by 20%?"

Execution:

Having designed the To-Be process and modelling it to find the Optimised result, the next phase is the implementation of the identified improvement. Most often, this results in the implementation of an Organization wide ERP. It could also be as simple as restructuring the organization of the Tills within a store.

Monitoring:

This phase encompasses the control function. It involves studying the actual working of the new system, deviations (if any) from the modelled output and introducing changes to reduce these variations. Business Activity Mining describes the set to tools and techniques for effective process control. Process Mining is another area of thinking in the subject.

Optimization:

Having monitored the actual live process, the next stage involves the implementation of changes identified during the monitoring stage.

Purpose:

The purpose of my research work is to study the importance of Business Process Management Systems in the current business space. The work would aim to gain deeper insights into the concept, study the organization and efficiency of this business principle at The Boots Company, UK. Through my initial ground work, I have gathered that BPM is not yet seen on a strategic dimension within the company. There are patches of this thinking present at the Operations function, but a full fledged working is still to be established. My work would highlight the importance and advantages of having an all encompassing and integrating BPM at workplace. I would be practically a few BMP techniques within the Operations department. At the end of my work, my project work would be available to the Senior Management as an opportunity assessment report.

Research Questions:

In a broader sense, I aim to answer the following questions at the end of my work:

What is Business Process Management?

How is it organised within Boots?

What are the benefits of having it implemented on an organizational wide scope?

What are the costs involved?

What subsets of the concept would be most feasible to the company?

How to manage the change process involved?

Importance of the study:

Organizations have been undergoing strategic changes over the past decade. More so in the past couple of years. The current recession has proved that risk management and strategic planning are most vital for an organization's long lasting and self sustaining performance. My work will strive to highlight one such areas of strategic thinking and inform the senior management about the benefits involved. I would prove that the scale of Operations of Boots is big enough to support such a strategic initiative.

Scope:

The scope of my work is limited to the strategic and organisation wide aspects of BPM. I would limit my study within the Operations department. Operations function, as in any retail establishment, is the biggest unit, both technically and on the human count, within boots. Studying this particular function, I believe, would be enough to gain a general understanding. Furthermore, I would be concentrating on the non- technical aspects of BPM. I would not be qualified enough and not gain access to study the company's ERP to do a more technical study. So, I would mostly be concentrating on the following tools:

Business Process Mapping using Microsoft Visio.

Failure Mode and effects Analysis using Microsoft Excel.

Key Performance Indicators using Microsoft Excel.

Lean Management.

Theoretical framework and Literature Review:

During my research, I would be guided by the various theoretical developments within the Business Process Management area. As stated before, I would be concentrating on the concepts of Process Mapping, Failure Modes and Effect Analysis, Key Performance Indicators (KPI) and Service Level Agreements (SLA; both forward SLA and reverse SLA); continuous improvement (Kaizen) and Lean Management.

Business Process Management is an evolving concept, one which has been in practical existence for just about a decade now. But this has also been amongst the most dynamically improving areas of Quality management. Many books have been published on the area discussing the concepts involved to its successful implementation. I would be using "Business Process Management: Concepts, Languages, Architectures" by Mathias Weske, published in 2007 by Springler- Verlag Berlin Heidelberg as my primary reference material. It is amongst the most lucidly written and easy to understand resource on BPM that I have come across. I would also be referring to "Business process management systems: strategy and implementation" by James F. Chang, published in 2006 by Auerbach Publications, as a more practical resource. The book contains practical cases on the implementation of BPM and deals with some real life examples of successful BPMS. "Business Process Management: 7th International Conference, BPM 2009, Ulm , Germany, September 2009" by Umeshwar Dayal, Johann Eder, Jana Koehler would help me to grasp the latest happenings in the area. The book is a snapshot of the BPM conference held in Germany in September 2009. I would also be referring to the "IBM Business Process Management Journal". IBM is amongst the pioneers and the most successful in this concept. The journal discusses on the BPMS at IBM, narrates its success in implementing the concept and provides guidance for young Quality Analysts. Finally, I would be using the internet resources to guide my work. The World Wide Web has a repository on the concept and I anticipate it to be a very useful resource for me. Where used, the source would be aptly referenced.

Outline of Methods:

As stated before, I would be concentrating on the four fundamental tools for Business Process Management: Business Process Mapping, Failure Mode and Effects Analysis, Key Performance Indicators and Lean.

Process Mapping:

Process Mapping would be done using Microsoft Visio. I would be mapping the operations function within the utility which will be allocated to me by the company. I would be doing my work at an L4 level, the level immediately preceding the Standard Operating Procedure. The maps would be done comprehensively, though not at a key stroke level. The organisation has its own standard mapping conventions and templates, which I would be adhering to. The process flow would be activity oriented, rather than object oriented, a technique which suits the retail industry more aptly. The four dimensions which I would be giving importance to are the inputs, outputs, systems involved and the control mechanisms/ escalation points.

Failure Mode and Effects Analysis:

FMEA would be done on Microsoft Excel. These would be based on the process maps created. Each and every activity box in the process maps will be analysed for possible failure modes. These failure modes will be studied on their business impact by three parameters: Financial Impact, Reputational Impact and Regulatory Impact. These would further be rated, on a scale of 0-6, on how easily could the failure be detected (Dectability), how often does it occur (Occurrence) and the severity of its occurrence (severity). The rated impacts will be multiplied to obtain the Risk Priority Number (RPN). I would then be discussing with the departmental manager on the tolerance limit of the RPN. If an RPN breaches the pre specified tolerance limit, a control mechanism would be put in place for preventing the failure from happening.

The ratings for Detectability, Severity and Occurrence would be based on the average of the last quarter's data. Though numerical, it has a small portion of the personal bias of the departmental manager. However, this is only minimal and I would strive to make my findings as objective as possible.

Service Level Agreements:

My SLAs will be both forward and reverse. They would be based on multiple risk metrics, which are yet to be finalised by the company. My initial screening has revealed that most probably, I would be working on the Cumulative Input and Output Volumes, The Turnaround Time (TAT) and the Error Rate, among others. The designed SLAs would formally be signed off by the concerned departmental manger before I can reproduce it in my research work.

Lean management:

This is the only non numerical subjective parameter in my study. After the Process Maps, FMEAs and the KPIs have formally been drafted and signed off, I would be looking for the Non Value Adds within the Operations function. It would be a forward analysis wherein my process documents would be the primary tools with which I would be looking for process improvements. This would be done towards the end of my research, when I would be having a clear visual of the processes along with their risk metrics and the individual importance of each process step. Through initial investigation, I have identified that the store layouts have huge improvement opportunities. I would only be documenting the implemented improvements, not the proposed ones in my final research report.

Ethical Issues:

In conducting this study, I would be guided by the Guidelines set out in the British Educational Research Association (BERA) 2004 ethical issues for Educational research. The guidelines state that the researches are wholly responsible to their sponsors, the research community and participants of the research.

The guidelines state that all research work must be conducted at the highest levels of integrity. Research findings are to be published without falsifying and misstating the work done. The guidelines set out the responsibilities of the researcher to participants of the research, sponsors of the research and the research community. (BERA, 2004).

Validity and Reliability:

All my data collection and analysis would be done real time in the company's premises. Actual financial data will be used for preparing the cost benefit analysis. Furthermore, these figures would be drawn up from each department's "cost centre packs" so as to ensure that I'm subject to the personal bias of the employees to the minimal degree. Furthermore, my advancement during my research would be subject to the approval of the Departmental head, ensuring my work is in line with the company requirements. As such, I anticipate my work to a valid and a reliable resource both to the company and the general academic interest.

Limitations to the research:

As in any research work, my study would be covered with under the following limiting factors:

I have allocated three months for my study. Considering the vastness of my chosen topics and the inherent operational nuances, I would only be focusing on the strategic issues. My work is limited to the Operations function. More specifically, I would be working closely with one of the departments within the Operations function. As such, my findings are prone to sampling bias. However, I would be choosing a utility which has operational wide implications so as to ensure that I address to as many issues as possible.

Business Process Management Systems are carried out through state of the art Business Modelling Software. Copyright issues and other proprietary constraints mean that I would be working with basic Office applications. I had approached the company with a plan to work using the Casewise Corporate Modeller Suite. However, the company is not entertaining the costs involved in having the software installed for commercial purposes.

I would be working with sensitive company financials and the other insider information. As such, I would not be able to publish some of the major findings which I anticipate to discover.

Also, due to time and other resource constraints, I would only be able to conduct the Design phase of the BPM life cycle.

Finally, I have secured access to company's premises for 4 hours a day, 5 days a week. Furthermore, the amount of time that the departmental heads and other personnel would be able to allocate to me from their busy schedules is yet to be seen.

Research Project Plan:

My work would be done over a period of 12 weeks. I have been doing my initial surveys and the associated literature reviews since the first week of December. I have used the first two weeks for literature review and understanding the operations of the firm. The next three weeks, I have spent with the various departments within the firm, understanding their organizations and implications to the organization. Over the next two weeks, I would be mapping the Operations processes. I'm yet to hear from the regional manager on the specific department that they wish to see me conducting my researching. After mapping, I would use the next three weeks to concurrently designing the Failure Mode and Effects Analysis and the Key Performance Indicators. The next week will be used to identify the Non Value Adds in my allocated function and implement Lean. Finally, in the last two weeks, I would be analysing and reporting my findings.

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