Week 9- Strategic Business Functions

This blog will cover Strategic Business Functions approach in detail with a brief of Critical Success Factors approach. 


CSF - Critical Success Factors- Different functional managers are asked question about the important things they would like to enquire/know about their business once they are back from a vacation. The answers are then analysed to define the critical success factors. Critical success factors are difficult to define because the definition of critical success factors can conflict between different function divisions example - inventory manager would like to keep his inventory low and maximise deliveries and at the same time, transport managers would like to minimise deliveries and increase inventory. 


Strategic Business Functions approach- This is one of a technique used but is not well known. Failures of CSF techniques led to the rise of SBF approach. Does not ask individuals but only analysts about their views. 
Characteristics-
1. Develops an understanding of the executive roles
2. What functions the business does it is important (Strategic)
3. Identifies linkages between the strategic functions
4. Allows for prototyping
5. Aids in well prioritised development
6. More of a wish list.


Talk to executives in groups so that conflicts are not ignored but resolved. The time to arrange such meetings is often through retreats (excursions, workshops, brainstorming sessions) . Discussion is about what is important to business and their linkages. Prioritise the SBF's.  Once SBF's are identified, the data sources are identified. Then development takes place as per the prioritised SBF's.


SBF are easier to start off and are less demanding of exec's time. Real strategic business objectives are identified and clarification of inter-dependency between functions is identified. Clear understanding of critical needs of the organisation and more consistent reports. Achieve the SBF's by questioning "WHY" we need rather than focusing on "WHAT" we need.
Cause Effect understanding is achieved...how one change effects other function units.


TQM - Total Quality Management
Collect data, use simple statistical tools like Histograms, Pareto Charts, Run Charts, Shewhart Charts etc. to analyse data and take actions to improvise systems. Interestingly, there is no evidence that graphs improves a decision maker's understanding of data.Wow! why use them??


Business Performance Measurement -
1) Productivity Measurement is measurement of the ability of a firm to create something having exchange value.
EIS/DSS/BI applications often report productivity by measuring inputs being transformed into outputs through some production process and it does not limit to a manufacturing organisation. 
Steps - Measure inputs ,measure outputs ,know the process of transformation in detail.
Productivity is increased getting more outputs from same number of inputs. 
Law of diminishing returns - Varying one input and keeping others constant, some productivity increase is adopted.


Production Function is mathematical expression that states the maximum amount of output that can be produced by same number of input. Shifting to a new production function represents a change in productivity.



Exam date-sheet is up and is giving me goosebumps....I am still struggling with assignments...Phew! never realised time flies this fast. I had promised myself to get a head-start on BIA assignment and well I did, if you count connecting to database and checking out the data. Well, I have been punctual with my tutorials and Aroma case study is going on well.  Will try to give more time this weekend and post my updates. 


P.S - If you mistake the blog for a 'lecture note', then apologies in advance. Actually,  I typed it during the lecture itself to save some time.