Optimizing Business Process Performance by Analyzing Contextual Factors

The assignment content emphasizes the importance of analyzing contextual factors within and outside an organization to ensure a smooth business process. It highlights the impact of demographics such as literacy and gender ratio on decision-making, as well as the role of technology in driving innovation and entrepreneurship. The content also stresses the need for a holistic approach to organizational performance, focusing on key performance indicators (KPIs) and improvement indicators (KIIs). Additionally, it touches upon the concept of process efficiency and performance ranking, emphasizing the importance of evaluating internal and external factors to achieve success.

INNOVATION AND ENTREPRENEURSHIP

INNOVATION AND ENTREPRENEURSHIP
The Contextual factors to drive business for success
Introduction
Innovationis a specific tool of entrepreneurs, the means by which they exploit change
as an opportunity for a different business or a different service. It has the concepts of
discipline, learning and practicing for advancement. Innovations open the way of
success for entrepreneurs. The big names like Steve Jobs, Bill gates, Jeff Bezos etc.
they all understood what innovation plays in business and now they all are known to be
the best entrepreneurs.–[Christensen, C. M et.al 2003]
Entrepreneurshipon the other hand is the capacity and willingness to develop,
organize and manage a business venture along with any of its risks in order to make a
profit. It’s the start of business which a bold move by a person called Entrepreneur who
vested money, time and effort.–[Drucker, P. (2014)].
Innovation and entrepreneurship are closely related to each other. It’s like one is
complementing other. For a successful business, innovation is needed and for that a
sound entrepreneurship is essential.
Information and Technology is moving so fast that we are able to connect people miles
away within a fraction of second. Innovative ideas, inventions, development of
communication network etc. these all are pillars of success in IT business. In our case,
we are involved in fraud detection of credit cards which is possible because of strong
IT network and innovative business idea.
Contextual Factors
Any information that can be used to characterize the situation of an entity is called
“Contextual factor.” It includes a combination of all explicit and implicit circumstances
that impact the situation of a process which can be termed as business process. It
carries a certain characteristics.
Aim and Objective of Contextual factors
The primary goal of contextual factors finding and its analysis is to “identify the business
prospects like Where is it positioning, Where can it reach, How can we grow, How can
we challenge competitors? Etc.” For an IT business like us where competition is tough
and changes taking place so fast, we have to adapt with the changing scenario. This is
the reason contextual analysis becomes important.
Scope
The scope is very clear to take driver seat of our business by understanding our
environment and continuously working towards technology and innovation.

-[Kimberly, J. R,et.al 1985]
CONTEXTUAL FACTORS EXPLANATION
PHASE-1- Context
awareness-[Rosemann, M, et. al 2006]
There have been several approaches regarding how to combine business processes
with associated sensitivity to the context. “Self-managing, automating, minimizing”
business process is triggered by the conceptual factors understanding. There must be
quick response system to induce change internally and externally. The process like
Business Process Reengineering (BPR)[Grover, V et, al 1995]helps in evaluating and
redesigning process undertaking these contextual factors. This phase includes context
mining, context modelling and context taxonomies. This all in combination gives
momentum to grow.[Strang, T,et. al 2004 andSu, J. H., Yeh, et,al 2010]
PHASE-2- Levels of Contextual factors
In our company, we have number of process, each process consists of number of
activities. These contextual factors influence each such process and activities. For ex-
in company level contextual factors like origin of company, history, ownership, control,
size,technology, location, resources put effect on organizational structure. This same
can be applied in case of business level, functional level and operational level as well.
Conceptual
factors
Process
Activity

PHASE-3-Performance influenced by Contextual factors
Determining the reasons for the process variations and diminishing the reasons for the
poor process performance[Gratton, L., et. al 1999] or facilitating the reasons which
enhance the performance of the process is the main aim of investigating the context.
These are basically called Key Performance Indicator (KPI). [Setijono, D., et. al 2007]
The first category of indicator refers to quality. This indicator measures whether quality
matched our expectation or not by monitoring the specifications and identifying the
factors like defects and efforts for preventing unacceptable quality.[Flynn, B. B et al.
1995]
Second category is time that shows the promptness in cycle time or time to market.
[Griffin, A. (2002).]
The last category is cost which indicates how efficiently operation carried out to reduce
overall cost of operation.[Phillips, L et.al 1986]
DIVISION OF CONTEXTUAL FACTORS
It is basically divided into 2 types as Internal and External contextual factors. Further it
is classified into few categories which is as follows-
Internal FactorsExternal Factors
 Organizational condition -> PESTEL
 Organizational resource
 Customer related
(Political, Economic, Social, Technological, Environmental and Legal)
Contextual
factors
Quality
Time Cost
Performance

Contextual (Internal and External) factors influence on business
structure and strategy
Business entity stands on its structure and strategies. A successful business is that
which has a stable and flexible organizational structure. Strategy is a systematic long
term plan that helps to achieve the mission and vision of the organization.
The contextual factors has major influence on strategy and structures of the
organization, how let us discuss-
Internal Factors-
Organizational Condition- It refers to the working environment of organization. First we
need to understand what personnel structure is being followed whether it’s bureaucratic
or participative. This will decide what policies, vales and ethics to be implemented. In
today’s world, Participative management helps to form better strategy.[Zaugg, R.,et. al
2002]
Organizational Resource- Facility, location, R&D, human resource, patent and copy
write, MIS etc. are the resources of organization which influence strategy to a great
extent. For e.g. a good R&D department can give you better ideas of innovative product
and service to take competitive advantage.[Singh, V et. al 2002]
Customer- all efforts are directed towards customer satisfaction. Customer asks for
improved product every time. They need it safe, secure and reliable. As an IT business,
giving total security of their personal information must be the strategic goal which should
be implemented at any cost..[Hoque, Z et. al 2000]
External Factors
Political- Local, state and central government actions along with international political
condition, its stability greatly influence on business strategy. For e.g. Ban of Facebook
in Iraq, Syria and other few nations due to political maneuver.[Nordhaus, W. D. (1975)]
Economic- National and international economic condition like inflation, interest rate
parity, currency and exchange etc. influence the business strategy to a great extent.
[Chen, N. F, et. al 1986]
Social- Demography, culture, tradition, religion etc. social factors have influence over
business strategy. For ex. Use of currency rather than card due to poor literacy and fear
of stealing.[Srdjevic, Z, et. al 2012]

Technology- Today’s world is driven by technology. It’s fast and dynamic. Business
strategy must be in that way. Providing safe and secured banking solution in case of our
business greatly depends on technological advancement.[Pérez López, S, et. al 2005]
For strategical action plan, environmental scanning must be done. There are a number
of ways to do this factor analysis like SWOT (Strength, Weakness, Opportunity and
Threat), ETOP (Environmental Threat and Opportunity Profile), IE Matrix (Industrial
Evaluation), BCG Matrix (Boston Consultancy Group) etc.[White, R. E. (1986)]
Contextual factors influence on decision making
Decision making is one of the most important action of any business organization. It is
the process of choosing the right action out of the alternatives available. On your
decision, your success depends. Thus taking a right decision becomes essential. The
first phase of decision making process is identification of problem or opportunity. This is
possible with the study of contextual factors.[Simon, H. A. (1979)].
Let’s discuss how it goes –
Internal factors-
Organizational condition- The structure of organization, its size, growth, vision, mission,
goal, history, performance etc. put a great stand on decision making of organization.
Organizational resource- Finance, no. of personnel, departments, level of management,
facility, area of business, rights and trademark etc. are the assets of organization which
have a significant influence on organizational decision making mostly in matter of
expansion and diversification.
Customer- The change in taste and preferences of customers has been a key factor
while taking business decision
External factors-
Political- Government rules and regulations regarding doing business, allowing the
accessibility to use data etc. are the main points for our business decision making.
Economical-Inflation, change in currency value, interest rate variation etc. effects our
product and service pricing thus these factors can’t be ignored.
Social- Many social factors like literacy, gender ratio and other such demographics
effect our decision making directly or indirectly.

Technology-our business is depending upon technology. Its advancement will help us to
take better move. Decision like adopting new tracking technology for fraud in credit card
is one of example.
Overview
Conclusion
Analyzing process performance needs to be done with the contextual frameworks which
will help to check process efficiency and performance ranking. Each company needs to
analyze contextual factors from inside and outside in order to ensure a smooth business
process. Efficiency and effectiveness, the two keys of success can be achieved with
such internal and external analysis followed by evaluation. It is a holistic
approach[Hee, C. C. H. (2007)]which is aimed at focusing on those factors which are
important and which has major influence on organization.
Relationship of Innovation-entrepreneurship with Conceptual factors can be explained
as –

 Understand about the environment in which we are operating our business, like it’s
the learning from environmental factors which may be internal or external or both.
 Findthe best possible opportunities which we can either make or acquire to take
advantage over others. For ex. Reduction in time of fraud detection.
 Utilize opportunities in front you in order to take advantage, like adopting a new
technology to reduce fraud in credit card use.
 Retain core competency and build it even stronger by nourishing innovative ideas,
extensive research and inclusive work of all.

References
1-Christensen, C. M., & Christensen, C. M. (2003). The innovator's dilemma: The
revolutionary book that will change the way you do business (p. 320). New York, NY:
HarperBusiness Essentials.
2-Drucker, P. (2014). Innovation and entrepreneurship. Routledge.
3-Rosemann, M., Recker, J. C., Flender, C., & Ansell, P. D. (2006). Understanding context-
awareness in business process design.
4-Grover, V., Jeong, S. R., Kettinger, W. J., & Teng, J. T. (1995). The implementation of
business process reengineering. Journal of Management Information Systems, 12(1), 109-
144.
5-Su, J. H., Yeh, H. H., Philip, S. Y., & Tseng, V. S. (2010). Music recommendation using
content and context information mining. IEEE Intelligent Systems, 25(1).
6-Strang, T., & Linnhoff-Popien, C. (2004, September). A context modeling survey.
In Workshop Proceedings.
7-Kimberly, J. R., & Evanisko, M. J. (1981). Organizational innovation: The influence of
individual, organizational, and contextual factors on hospital adoption of technological and
administrative --innovations. Academy of management journal, 24(4), 689-713.
8-Gratton, L., Hope‐Hailey, V., Stiles, P., & Truss, C. (1999). Linking individual
performance to business strategy: The people process model. Human Resource
Management, 38(1), 17-31.
9-Setijono, D., & Dahlgaard, J. J. (2007). Customer value as a key performance indicator
(KPI) and a key improvement indicator (KII). Measuring Business Excellence, 11(2), 44-61.
10-Flynn, B. B., Schroeder, R. G., & Sakakibara, S. (1995). The impact of quality
management practices on performance and competitive advantage. Decision sciences, 26(5),
659-691.
11-Griffin, A. (2002). Product development cycle time for business-to-business
products. Industrial Marketing Management, 31(4), 291-304.
12-Phillips, L. W., Chang, D. R., & Buzzell, R. D. (1983). Product quality, cost position and
business performance: a test of some key hypotheses. The Journal of Marketing, 26-43.
13-Zaugg, R., & Thom, N. (2002). Excellence through implicit competencies: Human
resource management–organisational development–knowledge creation. Journal of Change
Management, 3(3), 199-211.
14-Singh, V., Bains, D., & Vinnicombe, S. (2002). Informal mentoring as an organisational
resource. Long Range Planning, 35(4), 389-405.
15-Hoque, Z., & James, W. (2000). Linking balanced scorecard measures to size and market
factors: impact on organizational performance. Journal of management accounting
research, 12(1), 1-17.
16-Nordhaus, W. D. (1975). The political business cycle. The review of economic
studies, 42(2), 169-190.
17-Srdjevic, Z., Bajcetic, R., & Srdjevic, B. (2012). Identifying the criteria set for
multicriteria decision making based on SWOT/PESTLE analysis: a case study of
reconstructing a water intake structure. Water resources management, 26(12), 3379-3393.

18-Chen, N. F., Roll, R., & Ross, S. A. (1986). Economic forces and the stock
market. Journal of business, 383-403.
19-Pérez López, S., Manuel Montes Peón, J., & José Vazquez Ordás, C. (2005).
Organizational learning as a determining factor in business performance. The learning
organization, 12(3), 227-245.
20-White, R. E. (1986). Generic business strategies, organizational context and performance:
An empirical investigation. Strategic Management Journal, 7(3), 217-231.
21-Simon, H. A. (1979). Rational decision making in business organizations. The American
economic review, 69(4), 493-513.
22-Hee, C. C. H. (2007). A holistic approach to business management: Perspectives from the
Bhagavad Gita. Singapore Management Review, 29(1), 73.