BUSINESS PROCESS REENGINEERING AND ERP

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Modul ke:

Fakultas

Pascasarjana

Program Studi

Magister
Teknik
Industri

Understanding the concept of re-engineering and business

process re-engineering
Use basic flowcharting techniques to map a business process
Use ERP systems in business pocess re-engineering

Business Process Reengineering (BPR)

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.
Process is a structured, measured set of
activities designed to produce a specified
output for a particular customer or market. It
implies a strong emphasis on how work is
done within an organization. " (Davenport
1993).

BPR Continued..
Business Process Reengineering involves
changes in structures and in processes
within the business environment.
The entire technological, human, and
organizational dimensions may be changed
in BPR.
Information Technology plays a major role
in Business Process Reengineering
It allows an efficient and effective change
in the manner in which work is performed.

WHY BUSINESS RE-ENGINEERING?

Element of BPR
The inputs, data such customer inquiries
or materials
The processing of the data or materials,
which usually go through several stages
and may necessary stops that turns out to
be time and money consuming.
The outcome, the delivery of the
expected result.

Major Component of BPR

Strategic Planning
Business Planning
Activity Modeling
Data Modeling
Activity Based Costing
Economic Analysis
Best Business Practices
Business Case Analysis

BPR In A Business
Organization

Every core business process exists to provide a

needed product or service for a defined customer.
A core business process according to defined
requirements, rules, or constraints produces these
products and services. In producing the product or
service, the process requires materials and
information, which are provided by suppliers, and
consumes the resources allocated to the process.
When you hear the terms "downsizing" or
"restructuring" on the evening news, or read about
them in the morning paper, you are learning about
companies that are moving toward process
management and away from hierarchical
management.

BPR In A Business
Organization
The arranging of work into like functions was suited to the
needs of an uneducated workforce.
It simplified employee supervision and training, maximized
managerial span of control, and had little dependence on
the free flow of information.
Work can be organized and managed as an end-to-end
process, rather than as the sum of disjointed functions.
Thus, work teams can now be arranged around a single
process creating focus and direction.

Objectives of BPR

Customer Focus
Speed
Compression
Flexibility
Quality
Innovation
Productivity

CASE STUDIES

A Conceptual Model for

BPR

PROCESS MODELING
Business process

Business activities

Data store

Data needed by business process

Data flow

Data transferred between processes or from

a process to data store

Organizational unit

Units where processes take place

Event

Includes triggers and outcomes

Modelling Business Process

Basic flowcharting symbols

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Event Process Chain (EPC)

Diagrams
The EPC format uses only two

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symbols
Events
Functions
SAP has developed EPC
representations for many of the
business processes its software
supports
The EPC modeling technique is
available in the IDS/Scheer ARIS
Toolset
ARIS: Architecture of Integrated

Event Process Chain (EPC)

Events represent a state or status in
Diagrams
the process
Events are named using ObjectPast Participle
Object
Past Participle
Expense
Incurred
Expense report Approved
Hard copy Filed

Functions represent where change

occurs in the process
Functions are named using VerbObject
Object
Prepare
Review
Mail

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Past Participle
Expense report
Expense report
Refund check

Object
Expense
Incurred

Past Participle

Event

Verb

Prepare
Expense Report

Object

Function
Figure 7.5 EPC components
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Ch.07 Concepts in Enterprise Resource Planning, Monk&Wegner

Event Process Chain (EPC)

Diagrams

EPC Diagrams follow an

event-function-event
structure
EPC Diagrams must begin and end
with events

Branching is done with

three types of connectors:
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AND
OR
XOR (exclusive OR)

Event Trigger

>

Not
Allowed

Event

Event

Event

Event

Function

Function

Event

Event

Event

Function

Function

Event

Possible connector and triggering combinations

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Function

>
Event

Function

Function

Event

>

Not
Allowed

Function

XOR

Function

Function

>

OR

Function

>

Function

Event

>

AND

Event

>

Event

Multiple

Event

Function

Function

Single

Function Trigger
Single
Multiple

Event

Event

BPR and ICT 1)

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BPR need system analysis and modelling,

operations research, management
information systems (MIS), human resource
management, etc.
The systems play an important role in BPR
in understanding the current systems and
in analyzing the potential benefits of the
redesigned systems
The term information systems means the
systems inserted into an organization to
support data processing and the decision
making.
Information systems are regarded as a kind

BPR and ICT

2)

When IT is adopted in organizations

then a change to the organizational
environment follows which represents
a challenge to which IT may be
required to adapt.
This suggests that the process of BPR
is dynamic and will inevitably lead to
further iterations in which the
reengineered processes need to be
re-assessed and redesigned.
BPR and software development

BPR and ERP

1)

BPR and ERP Implementation projects can

be thought of as being independent
initiatives.
In theory, each project could exist within
an organization without the other.
In practice, they are often both in process
at the same time in an organization and
influenced by and dependent on each
other in a very complex manner.

BPR and ERP

2)

An ERP might be selected to replace an

existing system, and the execution of a
BPR may be consequently delayed.
A BPR might be in place but terminate prior
to completion, and an included ERP
implementation might continue.
BPR and ERP implementations are often at
different stages of their development.

Information Technology Facilitates ERP

Client-server computing allows for
increase power and control
Integrated databases
Reduces redundancy
Increases data consistency

Supports multiple functional units

Data maintained separately from application
modules
Database management systems
Central data administration
Improved data integrity
Improved control
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Process Enterprises
Changed management structures
Process responsibility given to
process owners
Has process design authority

Stresses teamwork
Leans toward standardization of
processes
Focuses on achieving goals

Case: Re-engineering the

Payment Process System
at RFC
Current
payment processing system
Customers:

Make payments at branch

Cash, check, money order

Mail payments to branch

Manually processed
Batched for deposit in afternoon
Home Office mailed an Advice of Payment Received

Payment made to Home Office

Manually processed
Batched for deposit in afternoon
Branch mailed an Advice of Payment Received

Each night, batch payment processing runs to

update accounts

Continued
Weekly delinquency analysis run
Payment reminders sent out at 15,
30, 45, and 60 days
Computer generated

Settlement figures processed upon

request
Urgent requests take overnight

Major expansion planned

Basis for Best Practices

Supported by ERP
Modules

Re-engineered process models

Improved process change depictions

Data integration
Among multiple processes

Structural changes
Streamline business functions
Maximized productivity

REFERENCES
Monk, E.F and Wagner, B.J (2013).
Concepts in Enterprise Resource
Planning, 4th Ed, Boston, MA:
Thomson Learning
Sumner, M (2014). Enterprise
Resource Planning. Pearson
Education, Inc.