In the days before the Industrial Revolution, most products were produced by craft workers who accomplished the whole process of constructing a product, not just the manufacturing, but the marketing, sales, design, and service as well.
In 1776, with Adam Smith’s Wealth of Nations, the Industrial Revolution began, and with it, the need for specialization. In the time of the craftsperson, when the entire process could be run by one person, the output from that process was very limited. With the rise of the Industrial Revolution and the use of specialists, however, a process could yield incredibly more output.
- For example, where a craftsperson could yield less than 20 pins per day, a team of 10 people, each specializing in a certain aspect of the process, could work together to produce 48,000 pins per day.
Specialization, while producing great advancements in terms of output, brought with it a set of unique problems
As companies benefited by increasing output and reducing the price of their product, they needed even more specialists to run the entire organization. Specialists were not found just in manufacturing but in other areas such as finance, accounting, legal, personnel, marketing, and sales. This specialization led to functional organizations within enterprises.
Why? One reason is that it is easier to manage people and their activities if they are grouped into specialized fields or functions. Nonetheless, this functional organization led to three distinct types of problems, as shown in the table:
The overall process became so fragmented that the visibility was lost and the entire process couldn’t be measured and improved
The only way to measure the process at all was to measure each function of the process individually. These measures leads to local optimization at the sacrifice of global efficiency. In other words, each function will do what was best for it, regardless of the impact on the rest of the process
As work flowed from one function to another, delays became common. In fact, in order to facilitate the movement of items, they were held until enough of them could be batched up and moved at once. These delays had a negative impact on the entire organization
Thus began a need for looking at an entire process in a way that could lead to improvement in that process. This became known as business analysis, business process reengineering, or continuous process improvement.
This concept really took off in 1993 when M. Hammer and J. Champy wrote Reengineering the Corporation.
From that point on businesses used a process orientation to business improvement. Process orientation is involved in looking at the processes that make up the organization, as opposed to the departments that make up an organization, to determine which processes contribute to or detract from an organization’s competitive advantage.
This approach can help businesses deliver more value to the customer. They can determine which processes add to or detract from the value the organization creates for its customers and then they can focus their attention on those processes that add the most value.
Though organizations have been using computers (albeit large ones) since the 1950s to store business data and process transactions, the introduction of the desktop computer in the 1980s and the Internet in the 1990s combined with the user-friendly ways in which people can interact with computers through intuitive graphical interfaces (i.e. “windows” and “mice”) led to an explosion of information technology in nearly all business functions that involve data storage and communication.
In addition, computers allow us to perform complex mathematical operations that allow us to streamline many kinds of business processes and increase the efficiency of such diverse operations as routing delivery trucks, scheduling events, and maximizing the usage of physical storage space. These functions can be integrated seamlessly into an organization’s overall business strategy to achieve greater productivity at a lower cost
Here is where business analysts enter the scene. Their job is to become knowledgeable about business needs (and challenges) in terms of business processes and functions, and then work on project teams with technical professionals to develop solutions to improve those processes and functions. Again, IT solutions are perhaps the most frequent end product of these kinds of projects, but a good business analyst knows when other solutions may be more appropriate.
In fact, an emerging business challenge may not already have a well-defined process in place, so the solution might be to develop a new process altogether.
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