Business Process

Re-engineering
(BPR)

PK Solutions, Inc.
Pat Vaia, PMP
President & Executive Adviser

Date: May 11, 2006

Business Process Re-engineering
BPR Concepts & Good Project Management
Practices

 Capture, communicate and verifying

current and
redesigned business processes

 Practical aspects of conducting a BPR

effort

 Produce deliverables

 Know who your customer/s are – everyone

you interface with !!!!!!

Objectives of a BPR Effort
Consider general process
redesigning principles

Improve business processes

Opportunity
identification
Feasibility analysis

Set goals for redesigned

process components
Processes
Activities
Deliverables
Principles of BPR
General Principles Organizational Structure
Simplicity Remove barriers
Empowerment Support business
Process Design processes
Think Customer Interfaces
horizontally Work from the
customer perspective
Automation
Automate to advantage
Simpler is Better
Avoid Over-engineering
Work hard to simplify

Eliminate multiple points of

contact with & for the
customer
Eliminate errors resulting
from multiple contacts
Eliminate need to reconcile
differing information
Reduce delays resulting
from reconciliation

REMEMBER: Simple Processes

Less Costly
Enable Workers to Make Decisions
Vertical Compression
Process decision-making is
not strictly a management
task
Workers are empowered
Decision-making becomes
part of work

Advantages
Fewer Communication
Delays
Lower Management
Overhead
Better Customer Response
Perform Steps in Natural Order
Parallel tasks rather than
sequential procedure

Precedence set only by need

Speed up the process by:

Accomplishing tasks
simultaneously
Reducing time lag
between early and late
steps
• Less chance of
changing requirements
• Less need for rework
Multiple Version Processes
Single solution process
One-size-fits-all
Too complex for standard/simple cases

Processes require flexibility for:

Different markets
Different situations
Resource variations
Special customer requests

Reengineered process contains:

Simple, standard path (80% - 90%)
Exception handling path (8% - 18%)
Large complex path (2%)
Perform Work Where It Makes Sense
Administrative tasks Work off-loaded from
performed by the process team
team Specialized
Small purchases capabilities
Tasks not requiring a More cost-efficient
specialist
Reduce Audits
Checks and Controls Reviews and Inspections
Controls cost more Designs quality into a
than purchases process
Use only when it Identifies problems when
makes economic they occur
sense Downstream inspections
Implement aggregate • breaks down team spirit
or deferred controls • does little to improve
quality
• adds higher costs
• Ex: Rework
Checks, controls and inspections
add no value for the customer
Combine Several Jobs into One
Assign multiple process
activities to one person

Avoid the Industrial

Revolution
Division of tasks
Specialization of labor
Unskilled work force
No need for
communication

Create Task Inter-

relationships
Organize Around Processes
Formation of teams to perform
an entire process
Do not split work by function
(organization)
Teams co-located
Each person understands
another's responsibility
• Cross-Training

Eliminate/minimize hand-offs
Reduces delays, errors and
rework

Reduces management
overhead
Adopt Customer Perspective
Accessibility
Be available when the
customer wants to interact

Information
Require only the data
which cannot be captured
elsewhere

Wants and Needs

What are the customers
goals, objectives - wants
and needs?
Are we meeting these?
Are there unknown wants?
Provide Single Point of Contact
Case manager role
Single point of contact
Process “owner”
Has access to all people
and information systems
involved in the process
Empowered by
management to change
the process
Automate Appropriately
Avoid Costly Automating Avoid automating
for Automation’s Sake current processes unless
Weigh automation needed
benefits against costs Do wrong things
• Technology faster
acquisition Slows changes to
• System development effect improved
and maintenance processes
• Work force training Automate Repetitive
• Obsolescence Tasks
Automation strong
point
Leave interesting jobs
for people
 Business Decision
 Where to Look for
Process Improvement
Process Improvement
Opportunity Driven
Begins with current process workflow
Focuses on process components
Identifies opportunities for incremental improvement
Use as a checking mechanism for approach

Incremental
Products and services
Resources
Activities
Organizations
Interim deliverables
Performance Inhibitor
Look for “A factor which
negatively affects the
business’s ability to attain its
goals”

Result from:
• Poorly designed or not
designed processes
• Invalid assumptions
• Environmental
influences

Presents a source for

process improvement or
reengineering opportunities
Opportunity
“A chance for improvement in
a business process that allows
goals to be attained (fully or
partially)”
Business process may have
multiple opportunities
Each opportunity should be
weighed
• Costs
• Benefits
• Risks
• Priority of the goals it
supports
Product and Service Opportunities
Customer
How can the customer’s wants and needs be better
understood?
Are the customer’s wants and needs being met?
Are there other markets for the products?

Product / Service
What improvements or added value can
be made to products and services?
Are products and services provided
in a correct and convenient form?
Resource Opportunities
Suppliers (Who are the Suppliers – Inputs)
How can we communicate our wants and needs?
Can we assist in improving our supplier’s
performance?
Are there other suppliers capable of providing
resources?

Resources
What is state of the art?
• Material - quality, technology
• Finances - cost of funding
• Labor - skill set, training
Are resources provided in a correct and convenient
form?
Activity Opportunities
Cost Performance
Can the activity make Is the activity
more efficient use of performed by the
resources? proper organization or
How can non-value- role?
adding activities be Do the performers of
minimized? the activity possess the
proper skills, training,
etc.?
Timeliness
Is the proper
How can wait time
environment and
(in-queue time) be
equipment available to
reduced?
the activity’s
How can lag time performers?
(out-queue time) be
reduced?
Organizational Opportunities
Effectiveness
Manufacturing Companies
Is the location
structured to
effectively perform its
Field Operations
activities?
Do the proper skills
Finance exist within the
organization?

Production Interaction
How can the number
be reduced to
minimize hand-offs
(workflows)?
Is it conveniently
Interim Deliverable Opportunities
Quality
How can the quality of the
deliverables be improved?
How can deliverables be
made more usable by the
receiving activity?

Timeliness
How can deliverables be
passed between activities
more quickly?
How can the number of
workflows be minimized?
Opportunity Analysis
Cost / Benefit Analysis Goal Analysis
Immediate (one time) Goal/s are met
costs (supported) by the
On-going costs opportunity
Immediate (one time) Priority of these goals
benefits
On-going benefits
Risk Analysis
Risk identification
Cost
Likelihood
Classification of
Goals
Operational Goals
Quantify the redesigned
business process

Target the day-to-day

operations of the business
process

Address
The process as a whole
Individual activities
Interim and ultimate
deliverables
Business Process Goals
Set performance levels for the entire
business process in term of:
Responsiveness
• What will be the interval from the initiating event
to the ultimate deliverable?
Financial
• What is the value of this process?
• How much does/will the process cost
to perform?
Organization
• What will the organizational structure look like?
• What will be the staffing levels?
Activity Goals
Set performance levels (Metrics) for individual
activities in terms of:
Timing
• How long will it take to perform?
• How long will work wait (in-queue, out-queue)
before it is performed?
Cost
• How much will it cost to perform?
• What is the value added to the ultimate
deliverable?
Performance
• What are the performance measures assigned
to the person (organization) performing this
activity?
• What incentives and/or consequences are in
place for meeting this activity’s goals?
Deliverable Goals
Set performance levels for interim and ultimate process
deliverables in terms of:
Quality
• How will we measure quality?
• Of these measurements, what level will we
attain?
Efficiency
• How quickly will this deliverable be passed
between activities?
• What form will the deliverable be in
when passed?
Cost
• How much will it cost to pass
this deliverable to the next activity?
Defining &
Quantifying
Goals

THANK YOU