Business Process Re-Engineering

What is Reengineering?
Some common descriptions about what it is and what it is not. throwing aside old systems and starting over not tinkering with what already exists not a patchwork fix means asking if I were re-creating this organization today, given what I know and given the current technology, what would it look like? going back to the beginning and inventing a better way of doing work

Definition of Reengineering

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.

Fundamental
why do we do what we do? why do we do it the way we do? helps get rid of tacit rules and assumptions which may be obsolete or erroneous. ignore what is and concentrate on what should be. start with no assumptions; no givens.

Radical
means root radical redesign: disregard all existing structures and procedures and come up (invent) new ways of accomplishing work reengineering is not business improvement not business enhancement not business modification

Dramatic
blowing up the old and replacing it with something new not marginal or incremental improvements achieving large and significant improvement is the objective in reengineering redecoration verses demolition and reconstruction

Processes
a process is a group of activities or tasks that uses one or more kinds of input and creates an output that is of value to the customer. Eg. registration process passport issuing process book check-out process at the library

What BPR is not ?

automation (more efficient way of doing the wrong things!!!) Restructuring Downsizing Reorganizing de-layering or flattening an organization total quality management or quality improvement (although both TQM and BPR share common themes)

BPR is not TQM

Total Quality Management Business Process Reengineering

TQM
Degree of Change Starting point
Incremental Existing process Radical

BPR
Clean Slate

Frequency of change
Time required Inception/Participation Risks Type of Change

Continuous
Short Top Down/Bottom Up Moderate Cultural

One Time
Medium to Long Top Down High Cultural & Structural

The case of IBM Credit Corp.

finances hardware, sofware, and services that IBM sells; profitable business processing requests for financing 5-step procedure; all done by different individuals or groups. the end of the processa quote letter sent to the IBM field salesperson took 6 days (average); sometimes as long as 2 weeks many times business was lost due to long turnaround time

Applying BPR
installed a control desk to answer salespersonss questions added more time to the process brainstorming session by two managers actual work took only ninety minutes; the remainder of seven days was due to travel from one department to the other replaced specialists with generalists; one person deal structurer processed the entire application old system was based on certain assumptions about the nature of the work every bid request is unique developed a new computerized system to support the deal structurers the system was fine for most situations deal structurers could get help from a pool of real specialists, if needed

Results of reengineering

turnaround time: 7 days -- 4 hours a slight decrease in number of people increase in number of deals handled: 10000 % 90 % decrease in turnaround time a very high increase in productivity dramatic, radical, process true BPR!!!