Impact of Workflow System on the Information Flows and Communication in Franchising Networks

Paper to be presented at theEMNet-Conference on

"Economics and Management of Franchising Networks"

Vienna, Austria, June 26 – 28, 2003

Impact of Workflow System on theInformation Flows and Communication in Franchising Networks

Jiří Verberger

Faculty of Management and Economics

Tomas Bata University in Zlin

Mostní 5139

76001 Zlín

Czech Republic

Tel: 042 576 037 316

e-mail:

Abstract

The article deals with a support for the coordination in franchising networks by using workflow implementation into the information flow and communication structures between franchiser and franchisees. This support can make process redesign and reengineering at the same time. The processes are faster, cheaper, brief, better addressed and controlled, moreover with lower costs. With a view to the franchising system decomposition, it’s directed on the information exchange in relation of material processes. The paper is divided into 3 parts. First is about workflow: definition, models, key benefits of workflow etc. Second part is the extract from the research which author did in all Czech franchising firms registered in Czech Association of Franchising with a view to the communication and information flows between franchiser and franchisees. Third part analyses the determined flows in case studies in three firms which author has chosen.

Keywords

Franchising Networks, Workflow, Process Analyse, Redesign and Reengineering,

I.Theoretical base

A.Introduction

In comparison between successful and non-profit firms we haven’t found big difference in employees qualification or material equipment, both types of firm are similar, but there is another approach in meeting the targets from comparative sources – so there is the another processes design, more effective and better managed processes.

B.Workflow Definition

The workflow process is traditionally defined in office terms—moving the paper on company, processing the order to franchiser and issuing the invoice. But the same principles and tools apply to filling the order from the warehouse, assembling documents, parts, tools, and people to repair a complex system on Franchisee Company.

Workflow is defined as the computerised facilitation or automation of a business process, in whole or part. Workflow is concerned with the automation of procedures where documents, information or tasks are passed between participants according to a defined set of rules to achieve, or contribute to, an overall business goal. Whilst workflow may be manually organised, in practice most workflow is normally organised within the context of an IT system to provide computerised support for the procedural automation.

A Workflow Management System is one that provides procedural automation of a business process by management of the sequence of work activities and the invocation of appropriate human and/or IT resources associated with the various activity steps. So, It is the system that completely defines, manages and executes “workflows” through the execution of software whose order of execution is driven by a computer representation of the workflow logic.

An individual business process may have a life cycle ranging from minutes to days (or even months), depending upon its complexity and the duration of the various constituent activities. Such systems may be implemented in a variety of ways, use a wide variety of IT and communications infrastructure and operate in an environment ranging from small local workgroup to international franchising networks. The WFMC Reference Model/4/ thus takes a broad view of workflow management, which is intended to accommodate the variety of implementation techniques and operational environments, which characterise this technology. The Reference Model describes a common model for the construction of workflow systems and identifies how it may be related to the franchising network approaches.

WFM systems may be characterised as providing support in three functional areas:

The Build-time functions, concerned with defining, and possibly modelling, the workflow process and its constituent activities

The Run-time control functions concerned with managing the workflow processes in an operational environment and sequencing the various activities to be handled as part of each process

The Run-time interactions with human users and IT application tools for processing the various activity steps

Fig.1: WFM system characteristics /4/

The Workflow Reference model has been developed from the generic workflow application structure by identifying the interfaces within this structure that enable products to interoperate at a variety of levels. All workflow systems contain a number of generic components, which interact in a defined set of ways; different products will typically exhibit different levels of capability within each of these generic components. To achieve interoperability between workflow products a standardised set of interfaces and data interchange formats between such components is necessary. A number of distinct interoperability scenarios can then be constructed by reference to such interfaces, identifying different levels of functional conformance as appropriate to the range of products in the market.

Fig. 2: Workflow reference model for Franchising

The workflow enactment service provides the run-time environment in which process instantiation and activation occurs, utilising one or more workflow cores, responsible for interpreting and activating part.

In the model adopted, there is a logical separation between this process and activity control logic, which constitutes the workflow enactment service, and the application tools and end user tasks, which constitute the processing, associated with each activity. This separation provides the opportunity for a wide range of industry standard or user specific application tools to be integrated within a particular workflow application. Interaction with external resources accessible to the particular enactment service occurs via two interfaces:

The client application interface, through which a workflow core interacts with a work list handler, responsible for organising work on behalf of a user resource. It is the responsibility of the work list handler to select and progress individual work items from the work list. Activation of application tools may be under the control of the work list handler or the end-user.

The invoked application interface, which enables the workflow core to directly activate a specific tool to undertake a particular activity. This would typically be a server-based application with no user interface; where a particular activity uses a tool, which requires end-user interaction it would normally be invoked via the work list interface to provide more flexibility for user task scheduling.

C.How Does It Work?

Much work, even office procedures, can be processed in an assembly line, where there each step in the process is simple and specialized. One person may enter data. The next person may check the data. The next may retrieve the customer’s credit bureau rating. A computer may automatically retrieve the current customer status-recent orders, accounts receivable, etc. When all of the information has been consolidated, a specialist may evaluate whether to extend the credit and accept the order. And so forth. Most of the steps are simple. Training is minimized. Staffing is often flexible, because few steps require specialized skills, authority, or licensing. However, an effort is required to move the work between steps time is lost waiting at each step, and there are more chances that the work will be lost or misplaced.

D.About the Benefits

1.Control and Process Monitoring

One of the big advantages of an automated work management system is the control of the process, manifest by the procedures that are implemented by the system, and the record keeping reporting on the process.

2.Direct Cost Savings

These are the readily measured benefits. Often they involve better use of staff, or reduction of the staff. An automated work management system can move information through the value chain, without an employee having to understand the entire of it so that less training is required.

3.Management Timesavings

It’s much more easy, when manager hasn’t to trainee every new employee, system makes it itself and he can improving another skills or he can helping with the tough cases.

4.Productivity Increase

Considering a large number of workflow installations, the 30 percent productivity improvement is usual. After quoting that figure many times, some companies were disappointed to only get 28 percent (even though that is a great improvement, and very close to 30 percent), so a conservative number might be 20 percent improvement, just due to the automation.

5.Process Redesign and Reengineering

With dramatic process improvement or reengineering, a work management system may allow new procedures that would not be possible in a manual system. With a thorough redesign or reengineering of a bad process, 100 percent improvement—doubling the amount of work processed—is not unusual.

II.The Research Report About the Workflow System by Czech Franchisers

We can formulate initial conditions for exploiting the research and formulate hypothesis on the basis as was mentioned above.

A.Laying Out the Main Aim of Research and Researching Questions

If we begin from defined problems, we can lay out the main aim of research as the question: „Can we use the implemented workflow system for the support of theinformation flows and communication in franchising organisation?“ This is quite wide question, which can be divided into particular researching questions:

Has been the workflow by Czech franchisers and in relation to franchisees implemented yet and was it successful?

Have firms implicated Business Process Reengineering (BPR) or Business Process Improvement (BPI)?

Are the present firms of franchiser procedurally directed?

Has been work documents digitalized in relation to franchiser and franchisees as necessary condition of workflow?

Does implementation of workflow lead to accelerating the process and to its better monitoring?

B.Formulation of Hypothesis

After introducing the main aim, there were possible to formulate the hypothesis of this descriptive causal research.

H1: Workflow systems will assure increasing of current selling volume of franchiser on the whole, franchisees included.

H2: Franchiser oriented on its customer should be aimed on its process.

H3: Workflow applications are not implemented into franchisers´ firms.

H4: Workflow implementation will cause accelerating of business cases both by franchiser and franchisee and their better monitoring.

C.Research Methods

The main instrument there was quantitative research, because it was necessary to gain dates from specific quantity of respondents, structured to be able to be further interpreted.

The ex-post facto research was applied successfully, especially its type exploration. The task was a contact of the man, who tries to solve, with franchisers through inquiring in written form. In case that the questionnaire was not filling in precisely, or without response, there was additional telephone inquiring in form of structured interview. The delivered questionnaire was used as matrix. Three firms were analysed in form of casual study for better figuring out.

The exploring set included these12 firms:

Alois Dallmayr
FotoStar
JACQUES DESSANGE
McDonald´s
NOVÁK MASO - UZENINY
OBI
OREA Hotels
Paneria
Pax Food
Stavo Artikel
Yves Rocher
Značkové hospody Staropramen

The additional telephone inquiring assures 75% backflow. All firms registered by Czech Franchising Association were chosen as investigated subjects. The set in Czech conditions was statistically significant.

D.Results of Research

The questionnaire were worked up by simple counting up answers on closed questions, the explored set was so small that it was not suitable to continue in dividing into parts, e.g. on height of turn-over or number of employers.

1.The BPI, BPR Methods and Workflow (WF) by Franchisers Were Implicated in Relation to Franchisees.

Fig. 3: BPI, BPR Methods and Workflow (WF) by Franchisers

The research confirmed, that BPR was implemented in 5 Czech franchisers, but BPI is more popular, 8 from 9 did it. Just 3 franchisers managed to implement new system of proceeding documents of workflow.

2.Is Managing by Franchiser Installed by Process Or by Functional Positions?

Fig.4: Managing by Franchiser

Most of firm operates by process, because implementation of IS managed them to do it, 22% of Czech franchisers operates by line structure, 22% of firms operates by objectives.

3.Does an Implementation of Workflow Lead to Accelerating Process in Franchiser Organization?

Fig.5: Workflow Leads to Accelerating Process

Just firms, which implemented workflow, were asked; they agree that this leads to acceleration of firm process.

4.Does an Implementation of Workflow Lead to Acceleration of Process in Relation Between Franchiser and Franchisees?

Fig.6: Workflow Leads to Acceleration of Process

As we can see, workflow accelerates process between franchiser and franchisees, and 3 months after the implementation, it accelerated more than 20% by ½ inquiring subjects.

5.Has Outline of Franchiser about the Order after Implementation Improved?

Fig.7: Outline of Franchiser

In this case, subjects noticed improvement in the order outline.

6.Workflow Systems Assured Increasing of Current Selling Volume.

Fig.8: Increasing of Current Selling Volume

The subjects noticed increasing in selling volume as well as in the case above, but 3 months after the implementation, new system doesn’t show immediately.

7.Was BPR before Workflow Implementation by Franchisers?

Fig.9: BPR before Workflow Implementation

There was no BRP before implementation in one case, so it is obvious, that it is unnecessary to have BPR before workflow implementation.

8.Was There Changeover to Process Managing Organization before Workflow Implementation?

Fig.10: Changeover to Process Managing Organization

The process managing seems to be necessary for efficient support for implementation.

9.Is the Speed of Working up an Order Important for You?

Fig.11: The Speed of Working up an Order

The franchiser priority of the quick working up an order and speed of satisfying the customer is on the first place.

10.How Many % of Used Documents in Firms Was Digitalized?

Fig.12: % of Digitalized Documents in Firms

Just 33% of all firms digitalized their documents and this helped to their flow in firms executive systems. Firms, which have digitalized all the documents, are on the same rate as firms, which have implemented Workflow.

E.Research Conclusion

We can derive from realized research, that 1/3 of Czech franchisers has already implemented Workflow systems. These subjects confirmed, that implementation helps to accelerate business cases, they can easily control process and process was simplified. The process analysis was done first of all, but not always BPR, but mostly was done. The turnover increased. Czech franchiser have not come through BPR, they prefer BPI more. The communication „without papers“ works by 33% of researching subjects.

The output of this chapter will be either adoption or turning down the determine hypothesis.

H1: „ Workflow systems will assure increasing of current selling volume of franchiser on the whole, franchisees included “, about this hypothesis we can say that it true, because the exploration proved it, even if there were just 3 subjects and it was proved 3 months after implementation.

H2: „Franchiser oriented on its customer should be aimed on its process“. We can confirm on the basis of answered question about the priority of working up an order and just 56% procedurally manage.

H3: „ Workflow applications are not implemented into franchisers´ firms “. We can assure that at least 1/3 of firms have already implemented Workflow, this hypothesis is not valuable with special limits.

H4: „Workflow implementation will cause accelerating of business cases both by franchiser and franchisees and their better monitoring“. This can be confirmed by the respondent’s answers above.

The main task of the research „Can we use the implemented workflow system for the support of theinformation flows and communication in franchising organisation?” Definitely we can say, “YES”.

III.Case Studies

It includes 3 Czech franchising firms chosen from the Czech Association of Franchising.

A.FotoStar

1.Introduction

FotoStar Südcolor, Ltd. was established on 1991 with the financial help of a German firm Südcolor which has been operating in the field for over than 40 years. The predecessor of today’s laboratory was the establishment ColorServis in Teplice, which brought up the first mass development of colour films in the Czech Republic in 1965. The Südcolor group, operating in Germany, Czech Republic, Slovakia and Poland, produces more than 250 millions of quality colour photos every year and the laboratory in Teplice bears almost one fifth of the whole amount. Within the framework of Südcolor group the firm FotoStar operates as an individual and completely independent subject with its own conception of development and business strategy. The co-operative relationship shows mostly in the area of technology and of exchange of know-how and also in the area of production support. These days the firm presents the biggest large-scale processor of amateur and professional photo works in the Czech Republic and is able to give the widest possible palette of services including the delivery of complete photo-video-audio goods.

Apart from the high quality of production and services the company put the main stress on maximal reliability, seriousness and long-lasting business relationships. Primary goal is to have a healthy firm development, technical possibilities, production capacity and finances. This way the company try to have healthier and permanent relationships with its business partners.

The modern, newly built large-scale laboratory is equipped with the ultra modern professional machines of the world’s best brands and disposes of experienced team of professionals. It is possible to produce the first-class quality colour and black and white photos. The costumers very positively value the 24-hour service of the photo work delivery in the FotoStar collection nets. Permanent, everyday care of business partners through the service department and the field workers belongs to the highest standards. The permanent offer of business actions is a matter of course. The proof for the high level of services is the prestige award CZECH MADE that the firm has severally received. Unique software and well-organised work give the firm the possibility of quick and comfort satisfaction of different forms of business co-operation, including taking care of the whole chains of workrooms placed not only in the Czech Republic. The private large system of orders carry-in gives the chance to reach any place in the Czech Republic. This way of contracting partners can be ensured to receive not only their orders but also to get the everyday deliveries of photo-video-audio goods to their workrooms for free.