UNIT 8 PROJECT

Unit 8 Project “Realize Value Phase”

Unit 8 Project “Realize Value Phase”

Introduction

In 2009, ABC Tire Company decided to implement a BPM (Business Process Management) project with the goal to decrease the manufacturing cost per tire and increase revenue from each tire sold. After implementing the BPM project ABC Tire Company reviewed the value of the project after a year. This report presents an analysis of the impact of Business Process Management (BPM) project implementation on the organizational financials. Financials of cost structure have been evaluated after the implementation of BPM process with respect to baseline data about the relative cost structures.

BPM project not only concern with the implementation of a specialized software package in the organization (Fiammante, 2010). The BPM project is a strategic approach that leads to reforming the traditional operational principles of the company. BPM is a process-centric strategy adopted by the organization when it is unable to streamline its functional activities to achieve economies of scale (Jeston, 2008). BPM system implementation in the ABC Tire company ensures complete revision cycles of production processes by redesigning and reengineering the manufacturing process (Fischer, 2010). BPM Business Process Management extends the Business Process Reengineering principles that lead to enhancing the organizational effectiveness in terms of cost savings.

Case Analysis

Prior to implementing the data ABC Tire Company was having following cost and pricing structure for the tires manufacturing and selling. This data present the baseline data for 2009 that sets the basis of comparison for determining whether BPM system implementation in the company leaded to reducing the costs associated with tire manufacturing or not.

Importance of Baseline Data Accuracy

Business Process Management (BPM) system implementation enhances the business performance by providing opportunities to increase productivity, reducing cost, and extending the company's ability to turn the business on agility. It is highly important to ensure that baseline data is accurate. In cases, when baseline data are based on estimations, high deviations may occur in the proceeding results. This may leads to making wrong derivations from the results. For example, in case if results presented by ABC Tire Company have major deviation from the actual results of 2009, then it would create difficulties in judging the effectiveness of implementation of BPM project in achieving the cost efficiencies.

In this context, it is notable that BPM automation systems are developing rapidly today. Its contribution to the cost efficient process makes it in suitable for manufacturing firms for achieving competitive advantage in responsiveness to customer needs. The only way for the ABC Tire Company is to make close comparison with the baseline data to determine the need of new project modules of BPM. When baseline costs are significantly lower than the actual costs, it would lead to yielding wrong projections and may show that the project is successful, when in reality opposing results are obtained.

Evaluation of the Project

BPM project implementation in the ABC Tire Company created notable changes in few manufacturing cost. Main change occurred in reducing the labor cost applied to manufacturing of ...