The Sloan Valve company needed to overcome the difficulties in their product’s development process as it was complex (more than 16 distinct functional groups) and slow. They used to spend about 18-24 months on the development of a new product. The company’s screening process for product development was problematic, leading to over 50% of new ideas fail. To overcome the complex and slow product development process, the company invested in an IT system that was expected to automate the whole process. The main goal for implementing the IT system was to provide a common database, language, and platform for various groups within the company.
In the year 1998, Sloan Valve Company decided to invest in an ERP system for them to solve the problems with their product development system. They chose SAP and spent close to 11 months implementing the new ERP system. The company, however, did not realize the desired outcome after the implementation of the ERP system as they had hoped. The newly implemented ERP system had several inefficiencies; whenever one was fixed, another would crop up in another section. These inefficiencies had the senior management concerned about the lack of satisfactory results despite their efforts and investment (Balaji et al., 13). Sloan Valve Company did not implement the vanilla ERP software.
The ineffective ERP system caused the company’s senior management to hire a new CIO after agreeing the IT unit required a new direction. The CIO’s responsibilities would be to fix the problematic ERP and define a new objective for the IT department by amalgamating the IT department with the responsibilities for business operations. The new CIO was a big proponent of the process redesign. However, one senior executive preferred process improvement to the process redesign approach. The company’s management agreed to the senior executives’ proposal and decided to go with the process improvement approach. After seven months, the results were nothing close to their expectations (Balaji et al., 2011). It was then that top management realized the need for a complete process redesign.
IT was viewed only as a support entity for particular departments within the company; this resulted in clear boundaries between those departments and the IT department. The top management recognized the dangers they might come to face should the boundaries continue to exist. As a result, they assigned the CIO an additional function of Chief Process Officer (CPO) tasked with monitoring process modification across the whole company. The CIO/CPO launched initiatives to promote process reforms across the organization. The CIO has to become a Chief Innovation Officer at every company. Quantum computing and other upcoming technologies are changing the way business is done, resulting in the need for transformational leadership, and that is where the Chief Innovation Officer comes in handy.
To exploit the long tail of innovation, the BPM manager and the new CIO/CPO established a homegrown approach for the process redesign by integrating and adapting concepts from several redesign models like Define, Measure, Analyze, Design Verify (DMADV) to accommodate Sloan Valve’s requirements. The table below shows how Sloan Valve governed its process design.
Work Cited
Balaji, S., Ranganathan, C. and Coleman, T., 2011. “IT-Led Process Reengineering: How Sloan Valve Redesigned its New Product Development Process”. AIS Journals, 10(2). Web.