Business Process Reengineering

Spectrum of Change
Automation
Rationalization of procedures Reengineering

Paradigm shift

Automation
refers to computerizing processes to speed up the existing tasks. improves efficiency and effectiveness.

Rationalization of Procedures
refers to streamlining of standard operating procedures, eliminating obvious bottlenecks, so that automation makes operating procedures more efficient. improves efficiency and effectiveness.

Business Process Reengineering

refers to radical redesign of business processes. Aims at eliminating repetitive, paper-intensive, bureaucratic tasks reducing costs significantly improving product/service quality.

Paradigm Shift
refers to a more radical form of change where the nature of business and the nature of the organization is questioned. improves strategic standing of the organization.

Business Process Reengineering

Reengineering is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance such as cost, quality, service, and speed.

Key Words
Fundamental

Why do we do what we do? Ignore what is and concentrate on what should be.
Business reinvention vs. business improvement

Radical

Key Words
Dramatic

Reengineering should be brought in when a need exits for heavy blasting.

Companies in deep trouble. Companies that see trouble coming. Companies that are in peak condition.

Business Process

a collection of activities that takes one or more kinds of inputs and creates an output that is of value to a customer.
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BPR & The Organization

BPR is Not?
BPR may sometimes be mistaken for the following five tools: 1. Automation is an automatic, as opposed to human, operation or control of a process, equipment or a system; or the techniques and equipment used to achieve this. Automation is most often applied to computer (or at least electronic) control of a manufacturing process. 2. Downsizing is the reduction of expenditures in order to become financial stable. Those expenditures could include but are not limited to: the total number of employees at a company, retirements, or spin-off companies.

BPR is Not?
3. Outsourcing involves paying another company to provide the services a company might otherwise have employed its own staff to perform. Outsourcing is readily seen in the software development sector.

4. Continuous improvement emphasizes small and measurable refinements to an organization's current processes and systems. Continuous improvements origins were derived from total quality management (TQM) and Six Sigma.

Reengineering & Continuous Improvement--Similarities

Reengineering Similarities Basis of analysis Performance measurement Organizational change Behavioral change Time investment Process Rigorous Significant Significant Substantial Continuous Improvement Process Rigorous Significant Significant Substantial

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Reengineering & Continuous Improvement--Differences

Reengineering
Differences Level of change Starting point Participation Typical scope Risk Primary enabler Type of change Radical Clean slate Top-down Broad, cross-functional High Information technology Cultural and structural

Continuous Improvement
Incremental Existing process Bottom-up Narrow, within functions Moderate Statistical control Cultural

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What is a Process?
A specific ordering of work activities across time and space, with a beginning, an end, and clearly identified inputs and outputs: a structure for action.

What is a Business Process?

A group of logically related tasks that use the firm's resources to provide customer-oriented results in support of the organization's objectives

Why Reengineer?
Customers
Demanding Sophistication Changing Needs

Competition
Local Global

Customer Demands
expect us to know everything to make the right decisions to do it right now to do it with less resources to make no mistakes expect to be fully informed

Why Reengineer?
Competition
Local Global

Change
Technology Customer Preferences

Business Process Reengineering

WHY ?
Integrate people, technology, & organizational culture To Respond to rapidly changing technical & business environment and customers needs to achieve Big performance gains

Why Organizations Dont Reengineer?

Complacency Political Resistance New Developments Fear of Unknown and Failure

Performance
BPR seeks improvements of
Cost Quality Service Speed

Version Management
For different versions of a business process or data flow some mandatory information must be on the flowchart.
Name of the business process Unique number of the business process Revision number Date of last change Author Page number with total pages

Implementing a BPR Strategy

The Cs related to
Organization Re-engineering Projects
The 3Cs of organization Reengineering: - Customers The 4Cs of effective teams: - Commitment

- Competition
- Change

- Cooperation - Communication
- Contribution

Key Steps
Select The Process & Appoint Process Team
Understand The Current Process Develop & Communicate Vision Of Improved Process Identify Action Plan Execute Plan

1.

Select the Process & Appoint Process Team

Two Crucial Tasks

Select The Process to be Reengineered Appoint the Process Team to Lead the Reengineering Initiative

Select the Process

Review Business Strategy and Customer Requirements Select Core Processes Understand Customer Needs Dont Assume Anything

Select the Process

Select Correct Path for Change Remember Assumptions can Hide Failures Competition and Choice to Go Elsewhere Ask - Questionnaires, Meetings, Focus Groups

Appoint the Process Team

Appoint BPR Champion Identify Process Owners Establish Executive Improvement Team Provide Training to Executive Team

Core Skills Required

Capacity to view the organization as a whole Ability to focus on end-customers Ability to challenge fundamental assumptions

Courage to deliver and venture into unknown areas

Core Skills Required

Ability to assume individual and collective responsibility

Use of Consultants
Used to generate internal capacity Appropriate when a implementation is needed quickly Ensure that adequate consultation is sought from staff so that the initiative is organizationled and not consultant-driven Control should never be handed over to the consultant

2.

Understand the Current Process

Develop a Process Overview Clearly define the process

Mission Scope Boundaries

Set business and customer measurements Understand customers expectations from the process (staff including process team)

2.

Understand the Current Process

Clearly Identify Improvement Opportunities

Quality Rework

Document the Process

Cost Time Value Data

3.

Understand the Current Process

Carefully resolve any inconsistencies

Existing -- New Process Ideal -- Realistic Process

3.

Develop & Communicate Vision of Improved Process

Communicate with all employees so that they are aware of the vision of the future Always provide information on the progress of the BPR initiative - good and bad.

Demonstrate assurance that the BPR initiative is both necessary and properly managed

3.

Develop & Communicate Vision of Improved Process

Promote individual development by indicating options that are available Indicate actions required and those responsible Tackle any actions that need resolution

Direct communication to reinforce new patterns of desired behavior

4. Identify Action Plan

Develop an Improvement Plan Appoint Process Owners Simplify the Process to Reduce Process Time

Remove any Bureaucracy that may hinder implementation

4. Identify Action Plan

Remove no-value-added activities Standardize Process and Automate Where Possible Up-grade Equipment Plan/schedule the changes

4. Identify Action Plan

Construct in-house metrics and targets Introduce and firmly establish a feedback system Audit, Audit, Audit

5. Execute Plan
Qualify/certify the process Perform periodic qualification reviews Define and eliminate process problems Evaluate the change impact on the business and on customers Benchmark the process Provide advanced team training

Information Technology & BPR

Benefits From IT
Assists the Implementation of Business Processes
Enables Product & Service Innovations Improve Operational Efficiency Coordinate Vendors & Customers in the Process Chain

BPR Challenges

Common Problems with BPR

Process Simplification is Common - True BPR is Not Desire to Change Not Strong Enough Start Point the Existing Process Not a Blank Slate Commitment to Existing Processes Too Strong
REMEMBER - If it isnt broke

Common Problems with BPR

Process under review too big or too small Reliance on existing process too strong The Costs of the Change Seem Too Large BPR Isolated Activity not Aligned to the Business Objectives Allocation of Resources Poor Timing and Planning Keeping the Team and Organization on Target

How to Avoid BPR Failure

To avoid failure of the BPR process it is recommended that: BPR must be accompanied by strategic planning, which addresses leveraging Information technology as a competitive tool. Place the customer at the centre of the reengineering effort, concentrate on reengineering fragmented processes that lead to delays or other negative impacts on customer service. BPR must be "owned" throughout the organization, not driven by a group of outside consultants. Case teams must be comprised of both managers as well as those who will actually do the work.

How to Avoid BPR Failure

The Information technology group should be an integral part of the reengineering team from the start. BPR must be sponsored by top executives, who are not about to leave or retire. BPR projects must have a timetable, ideally between three to six months, so that the organization is not in a state of "limbo". BPR must not ignore corporate culture and must emphasize constant communication and feedback.

Summary
Reengineering is a fundamental rethinking and redesign of business processes to achieve dramatic improvements BPR has emerged from key management traditions such as scientific management and systems thinking Rules and symbols play an integral part of all BPR initiatives Dont assume anything - remember BPR is fundamental rethinking of business processes