September 8, 1998
Intranets give new life to BPR
By Geoffrey James
Baylor Healthcare System's Marylynn Henry, project manager, and Michael Miller, senior technical architect, deployed an intranet that simplifies business processes and increases the company's purchasing power.
Photo: Greg Smith/SABA
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How can you say "business process reengineering" in three simple syllables?
Try In-tra-nets.
Intranets are finally enabling corporate IT groups to follow the tenets of BPR--such as throwing out old notions of how businesses should be organized and run--without making massive, costly changes in computer infrastructure.
BPR gurus Michael Hammer and James Champy, co-authors of Reengineering the Corporation (HarperBusiness, 1993), say BPR means "starting all over, starting from scratch," but you know what kind of a place scratch is: You've been there. Scratch is where your company was thousands of programmer-years ago, programmer-years devoted to coding, recoding, testing, and retesting. Throwing out the old ways sounds good on paper, but for many corporations, the old ways are hard-coded into legacy systems.
Intranets change everything. Intranets offer so much flexibility that corporations really can reengineer their basic business processes and increase the value of intellectual capital without sacrificing legacy databases or switching to new platforms. There are two major reasons for this.
First, Web browsers run on many platforms, so an intranet doesn't require different versions of client applications for different platforms. An organization can use a Web application across a mix of operating environments, from Macintosh to Windows95 to UNIX. Furthermore, the application can be modified and updated from a central source (the Web server) without requiring changes on the client machines.
How intranet's facilitate business process reengineering
One-tiered system (timesharing)
Changing the application to facilitate BPR requires significant alteration of the database code implemented on the mainframe.
Two-tiered system (client/server)
Changing the application to faciliate BPR requires significant alteration of the database implemented on the server, as well as changes in the code running on each client.
Three-tiered system (intranet-based)
The application can be changed quickly and easily to facilitate BPR by altering the Web pages and the database interface on the Web server.
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Second, intranets permit the implementation of a three-tiered architecture, which makes it unnecessary to upgrade or modify legacy systems in order to support changes in core business processes. (See, "How intranets facilitate BPR")
The bandwagon cometh
Seldom has a technology hit the IT world harder or faster than intranets. Intranets can be found in 59% of U.S. and 38% of European organizations contacted in a recent survey by International Data Corp. Some 77% of U.S. and 75% of European organizations expect to be using intranets next year. Boston-based Delphi Consulting Group polled 400 Fortune 1,000 buyers, evaluators, and users of intranet products and discovered that an astounding 90% of respondents were using or actively evaluating intranets. Zona Research estimates that the intranet market will be valued at over $7.8 billion as early as 1998, and IDC predicts that there will be as many as 133 million intranet users worldwide by 2001. Many of these users will be employing the intranet for collaborative applications such as groupware, document management, and group calendaring/scheduling.
There's hardly a software vendor that hasn't jumped onto the Web-based bandwagon, and all of them are positioning themselves to grow as this market grows. Press releases about new products and showcase customers abound, as the world is bombarded by so many Internet, intranet, and extranet tools, facilities, and applications that it's difficult to keep track of it all. It can be a challenge for even the most talented IT professional to keep everything in perspective and to allocate the right amount of time and resources in order to best serve the corporation.
The point, of course, isn't just to become "Web-enabled," but to extract profit and value from the new technology. This means harnessing technology to the goals of the organization. And that's not always easy, because organizations are changing in unexpected ways, even as you read this.
Welcome to the private sector
One organization that has had to change rapidly is Grupo Financiero Bital, one of the largest financial holding companies in Mexico, It controls assets of around $9 billion. Bital is, among other things, a full service retail bank with almost 1,200 branches servicing more than 3 million customers. As you can imagine, that kind of customer base involves an enormous amount of data processing. But that's only part of the story.
VITAL STATISTICS
Grupo Financiero Bital
Customer: Mexican bank
Hardware: 100% IBM
Server Software: OS/2 Warp 4
Network: Token Ring and TCP/IP
Client Software: Netscape 2.02
Development Software: Cactus from Information Builders
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IT implementations in Mexico face additional challenges. Telecommunications facilities aren't always as reliable as they are in the United States, and there are often wild differences in the technical literacy levels of employees and technicians. Furthermore, major fluctuations in the exchange rate between the U.S. and Mexico has made it difficult for Mexican companies to budget for IT upgrades.
Bital not only suffered from those generic difficulties, it also suffered from difficulties connected with the dispersed nature of its business. Migration and upgrades to new technology have to be done manually by technicians who visit the widely scattered branch offices. This means that perhaps 30% of the branches might have a new software version within a week, while some branches might not get the new software up and running for a month or more. In one case, Bital's IT group discovered eight versions of a client application-seven of them obsolete-installed at various branches around the country.
Merely maintaining Bital's computing infrastructure is clearly a difficult task. Considering this, you'd think it unlikely that Bital would try to make major functionality improvements. But Bital had no choice, because the bank was privatized in 1992. When Bital had been run as part of a government agency, providing employment was as important as making a profit.
Unfortunately, Bital's computing infrastructure is still more appropriate for a massive government agency than for a profit-driven business. Branch managers could query Bital's massive databases for information, but that tended to produce 500 pages of statistics--a deluge of information rather than the exact information that was needed. Bital's IT group thus had two goals--to make a complicated system more stable and to offer much-needed functionality.
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