Integrating New Technology into Business Processes

Computer Processes. Image: jscreationzs/FreeDigitalPhotos.net (CC)

Organizations, customers and supply chain logistics benefit from technology-driven change that improves business processes. There are many risks involved in integrating new technology into business processes. Think, Design, Enable and Run is a business management approach used to guide project managers through this enterprise change process.

Think: The Roadmap

A business project related to changing a business process should start with a comprehensive review of the company's strategic goals and objectives. Be prepared to convince the organization's stakeholders why they should buy into new technology. Stakeholder will include employees, shareholders, customers and vendors. Communicate how integration of the new technology aligns with the company's business strategies and growth objectives.

Design: Integrated Solutions

The goal of technology solutions is to increase efficiencies of existing business processes and ultimately optimize customer service by delivering both increased functionality and quantifiable cost benefits. Design efforts should focus on aligning core business processes with a return on investment (ROI) that delivers directly to the company's bottom line. This will require early cost benefit analysis assessments by project managers when preparing financial projections.

Enable: Technology Implementation

No strategy can be effective without attention to implementation. Roll out new  technology through a phased implementation approach. The stakes are particularly high on complex technology implementations.  Remember that if you do not get  implementation right the first time, users will revert to old business processes.

Run: System Support

Measurement systems and technology support are crucial elements to have in place after going live with a new technology implementation. Depending on the specifications, this may include both in-house support and outsourced support that host components of the technology or business process. Internal and external support should be solidly in place to respond to the need for adjustment or change.

Organizations, customers and supply chains can benefit from technology-driven changes that improve business processes. there are certainly risks involved in integrating new technologies. Use the think-design-enable-run change management approach as a starting point to guide you through the process.

Measurement Techniques for Six Sigma

Sigma is a symbol used in statistics to measure standard deviation. The Six Sigma business management strategy was originally developed in the mid-1980s by Motorola, Inc. as a total quality management tool to reduce product defects. Under Six Sigma training, a manager learns to identify business process problems using a variety of statistical analysis methodologies that measure business processes or product short-comings in order to find solutions to eliminate them.

ANOVA

The analysis of variance, or ANOVA, is an analysis technique used to compare two or more populations of data to evaluate whether differences exist and, if so, the degree of differentiation. ANOVA may be used to gain information about process performance variances within time periods or between similar work groups within the same organization. ANOVA is generally used within the define-measure-analyze-improve-control phase, DMAIC, of the Six Sigma process improvement framework.

Histogram

Histogram, also called a frequency plot, is a measurement graph that uses a pictorial to visualize and study data. The height of each chart on a histogram reveals the number of times a rank-ordered data value falls within a range. It is used within Six Sigma as a graphical model of analyzing and measuring the frequency of data in categories or subgroups.

Pareto Charts

"Pareto chart is a vertical bar graph that illustrates problems in a prioritized order to determine which problems should be tacked first," writes Paul Keller in his book "Six Sigma Demystified". Pareto's analysis is the idea that 80 percent of results are caused by 20 percent of the potential causes. Six Sigma uses these charts to graphically track the magnitude of an effect per cause. It then sorts this information from the greatest to the least effect to determine which causes, or outputs, create the greatest impact. The chart is designed to distinguish the vital few (20 percent) from the trivial few (80 percent).

FMEA

FMEA, failure modes and effects analysis, is a measurement technique in Six Sigma that identifies high-risk processes and features based on the impact of failure and the potential for a failure to occur. In the Six Sigma analyze stage it is a funneling tool used to identify, prioritize, anticipate and prevent failures.

Time Series Plots

Time series is a statistical methodology that gathers data at a sequence of consistent and successive time intervals of change for a process or product. The time-series plot is a graphical chart that sets out data gathered at both continuous and discrete data points. Continuous data is collected from a process that requires a continuous stream of outputs. Discrete data is collected at regularly spaced intervals, such as hourly or every week.

Further References:

• "What Is Six Sigma?"; Pete Pande; 2001
• "Six Sigma Demystified"; Paul Keller; 2011
• Motorola University: What is Six Sigma?

Business Start-ups: Starting a Company 101

Small Retail Business. Photo: Ping Ping/Flickr (CC)

Starting a business start-up can be a daunting and task filled with a multitude of risks. Develop a plan based on industry research to maximize your chances of success. Determine business registration and licensing/certification requirements, and develop a basic knowledge of employment compliance issues and other reporting requirements.

Business Registration

Register your business. This Registration is required in most jurisdictions even if you are operating the business as a sole proprietorship. There is generally an associated fee along with an application that requires basic contact information of the business owner, as well as a general description of services. In addition to the assurance a customer gains in knowing who they are doing business with, registration assists in protecting a trade name and may be required to obtain a sellers permit. For instance, California's sellers permit allows a business to sell merchandise, vehicles or other tangible personal property at the wholesale and retail level.

Business Entity

There are initial choices to be made regarding how to operate a new business. The oldest form of business entity is the sole proprietorship. It is an unincorporated business that operated by an individual who assumes full responsibility and liability for the business. Other options include partnerships, corporations and limited liability entities.

Licenses and Certification

Secure the license, permit or certification required to operate your business. Failure to comply with the regulatory requirements can subject the business owner to a speedy shut-down by the industry's regulatory agency. The new business is also exposed to financial sanctions, as well as civil liability from unsuspecting customers and other third parties who claim damages from the unauthorized services. Contact a professional association within the industry or an attorney to learn about all licensing and certification requirements for new entrants.

Business Finances

Calculate your start-up expenses before staring a company. Include the costs of leases, equipments, supplies, inventory and labor. This calculation will serve as a basis for understanding whether adequate financial resources are available, or whether a loan is necessary. The U.S. Small Business Administration's website provides a wealth of information on loan programs that may be helpful for new entrepreneurs.

Human Resources

Understand the issues related to managing human resources. Research labor laws related to administrative and record-keeping issues for the employer, such as workers compensation, Social Security reporting and taxes. Familiarize yourself with employment laws related to hiring, wages and hours worked, termination and employee benefits. The U.S. Department of Labor's website features a significant amount of compliance assistance material and resources.

References:

• U.S. Small Business Administration: SBA Loan Programs
• U.S. Department of Labor: Compliance

The Social Media Policy, Risk Management and Employment Law

Developing Corporate Social Media Polices. Photo: Joe Lodge/Flickr (CC)

Social media communications can have an eternal shelf life with significant impact on a company's brand. Sensitive company information can quickly become subject to public scrutiny or create legal exposure in this era of instant micro-publishing. Communication outlets like Facebook, Twitter and LinkedIn can turn an employee's general discontent into to a brand manager's nightmare. All of this should give pause to those charged with developing risk management strategies.

To Post or Not to Post? Is That the New Question?

Companies recognize the growing risk management concerns related to social media. The practical and proactive strategy used by most managers is to develop a written social media policy. In fact, coupled with computer software blocking and filtering techniques, many employee handbooks already cover some social media policy during business hours. What happens after an employee leaves work is becoming the area of growing concern for employers.

The Overly Broad Social Media Policy

A disgruntled employee's Facebook communication about her supervisor did not justify her employer, American Medical Response of Connecticut, Inc. (AMR), firing her, according to a February 2011 National Labor Relations Board settlement announcement. AMR had a social media policy in place when firing the employee and it did purport to cover the employee's post-work activity.

The NLRB complaint against AMR was that its policy was overly broad. The complaint's settlement included AMR's agreement to revise the policy. Though it would have been quite instructive for industry, the NLRB did not publish the exact content of the AMR policy that was found too restrictive.

On April 27, 2011, the NLRB announced approving settlement of another Facebook related firing which included making the employee whole by the company for lost earnings. A telling search at the NLRB website performed for "Facebook" recently returned 17 case results, and 7 case results for "Twitter". The increased use of social media by workers may lead to greater employment law disputes involving this realm of electronic communications.

Industry Benchmarking and Professional Counsel

Many companies make their social media policies directly available on their websites. Chris Boudreaux developed a handy database of policies from 174 companies. Sort it by industry to gain comparative insights on the risks that mainstream organizations are covering in their policies.

Suffice it to say, a comprehensive policy is shaped by a company's industry standards and the requirements of its legal jurisdiction. Small and midsize businesses without in-house counsel, should take care that an HR or compliance officer, or outside legal counsel, regularly reviews an existing, or prospective, policy. This will make sure that it complies with applicable federal and state laws, as well as the growing administrative law settlements and decisions.

LinkedIn Data Security Vulnerabilities Exposed After IPO Launch

Photo: Mario Sundar/Flickr (CC)

LinkedIn receives its first crisis management moment as a publicly trade company after a data security report found that the accounts of its more than 100 million registered users are vulnerable to social media hackers.

After its booming IPO launch on May 20, 2011, LinkedIn has been all over the news, evoking the steamy tech boom of the 1990s. Before short sellers could calculate and trade on their escalating earnings, independent data security consultant Rishi Narang posted the results of his LinkedIn website scanning report on May 21, revealing the social media company's cookie-related vulnerabilities.

It seems that those tiny files that make it easier for users to gain access to their LinkedIn social media profile also create a greater risk of hacking, according to Narang.

Social Media Insecurity

Like many web-based companies, LinkedIn uses cookies to store computer session information for its users. Unlike many web-based companies, LinkedIn earned a market value of $4.3 billion within the course of a couple of days. The vulnerability to LinkedIn users' accounts comes with costs to its booming brand as the potential Google of the decade.

Narang reports finding two security vulnerabilities with the LinkedIn website. One relates to its cookies not using a secure flag, resulting in session credentials transferring in plain text and subjecting it to third-party exploitation. The second vulnerability is that LinkedIn's cookies expire in a year and they are not canceled when a user logs out. An attacker can more easily intercept data during these plain text session and gain access to a user's profile account.

Social media "profile hijacking" ranks up there with getting a computer virus. No user wants to discover a compromise to their social media profile -- communicating unknown messages to some of their most valued contacts. Suffice it to say, data security vulnerability announcement was not a good day for LinkedIn or those who had just invested a boat load of money into the company.

Responding to Data Security Scares

LinkedIn, like any other mid-sized company, should be ready to respond quickly to a data security problem that can become a media problem that exposes a brand to consumer doubt. As expected, a LinkedIn spokesperson immediately announced that the company was working on improvements to the cookies vulnerabilities, including reducing their lifespans from a year to 90 days. The company also plans to give users the ability to opt into SSL supported HTTPS pages, a move that Facebook offered its users early in the year.

While not mentioning LinkedIn's data security vulnerability, business news headlines since the announcement includes Bloomberg's "Why LinkedIn Bears Like Haverty Say Plunge Is Inevitable" and South Africa's Business Day's "LinkedIn 'magic show' will end in tears -- analysts". It is difficult to predict how this year's IPO-darling's story will play out. How well LinkedIn is able to respond to the microscopic attention to its business operations, however, will inevitably impact its ability to keep the substantial amount of market value it has been able to secure in a very short amount of time.

Frederick Herzberg and Workplace Theory

Photo of Frederick Herzberg

Frederick Herzberg's work has had a lasting influence on workplace and human resource management. He was one of the humanist school of management thinkers, emphasizing the human aspects of organizations. Concepts such as job enrichment, self-development, and job satisfaction have evolved from his insight that motivation comes from within the individual, rather than from a policy imposed by the company. It has also influenced organizations' rewards and remuneration packages.

Employee Attitudes

Prior to Herzberg's work, the approach to employee-management issues gave employee's a  low priority in the dialogue. The opinions of employees were rarely sought or considered. Herzberg and other colleagues highlighted the importance of employee attitudes through a study of 203 Pittsburgh engineers and accountants. By asking them what they liked and disliked about their jobs, he lead the dialogue on what management needs to do to assist in motivating employees.

Motivation Factors

Herzberg's public health study of employee views on the work they perform and what made them happy or unhappy about work conditions lead to the examination of two distinct factors that he proposed lead to job satisfaction, namely the motivation factors and hygiene factors. Herzberg discovered that the factors that lead to dissatisfaction are completely different from those that provide satisfaction. Positive factors were described as motivation factors. These meet uniquely human needs and include achievement, personal development, job satisfaction, and recognition.

Hygiene Factors

Hygiene factors cover basic needs at work. They include working conditions, supervision levels, company policies, benefits, and job security. If these are poor or deteriorate, they lead to poor job attitudes and dissatisfaction with work. Conversely, improvement of hygiene factors remove the barriers to positive attitudes in the workplace. However, improvement in hygiene factors alone is not sufficient to provide true job satisfaction.

Reward Process

Herzberg concluded that organizations should aim to motivate people through job satisfaction, rather than reward or pressure. This led to the concept of job enrichment, which would enable organizations to liberate people from the tyranny of numbers and expand the creative role of an individual within the organization.

Reference: "The Motivation to Work"; Frederick Herzberg; 1959

Game Theory: Business Simulation

Business simulation projects. Photo: Creative Commons: Opensource.com/Flickr

Business simulation is a training tool frequently used in university courses to teach students critical business management and strategy skills through simulated business projects. These business simulations are typically developed as competitive team projects to help students learn about the business environment using an active learning model.

Learn the Team

If you were assigned to a group, actively decide what you want to gain from the business simulation project. Then gauge each team member's expectation and commitment level. Ask members what they view as their strengths and weaknesses are as they relate to business processes and roles. Encourage group communication early in the process by exchanging contact information. Timely asynchronous and synchronous communications are central to the decision-making process and ultimately the team's success.

Key Roles

In a business simulation group project, each member will be assigned a specific role. There are different managerial and executive roles: president or CEO, as well as advertising, brand and sales managers. Product managers handle research and development and product line packaging. The sales manager is charged with developing sales objectives, the sales force and identifying the target market. Advertising managers decide on the appropriate promotional efforts based on the product and sales manager's strategies. Business operations and managerial supervision are within the realm of the president or CEO.

Marketing Research

Product line development and promotional efforts are fueled by information revealed by the market research about the target market. Market research is generally obtained from federal and state government statistics, trade reports and business and trade press. In business simulation projects, however, the market research that can be used is typically limited to the information provided within the simulation project material.

Business Profits

The ability to make profits is impacted by costs associated with production, marketing and sales, as well as the unit price for the product or service. Business simulation projects generally allow participants to set product or service unit cost. Keep in mind that business profits decrease when the price of a product is too low and products priced too high can cause consumers to purchase elsewhere. Consider competitive pricing, price skimming and penetration pricing as options when setting product or service prices.

References: 

• Marketplace Business Simulator: Virtual Business World 
• The Business Strategy Game: A Global Industry Simulation; Arthur A. Thompson, Jr., et al.; 2002