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BUSINESS PROCESS REENGINEERING

September 11, 2011

PAF-Karachi Institute of Economics & Technology

11 - Sep -2 0 11

M u h am m a d S oh a i l

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Business Process Reengineering

TABLE OF CONTENTS
Course Objectives ......................................................................................................................................... 3 Upon successful completion of this course, the student will be able to: ...............................................................................3 Introduction.................................................................................................................................................. 3 Business Process Reengineering ...............................................................................................................................................3 Business Process Reengineering (BPR) means: ................................................................................................ 4 BPR Requires ................................................................................................................................................ 4 Business Functions ......................................................................................................................................................................4 Business Process Reengineering Advantages ................................................................................................ 6 Business Process Reengineering Disadvantages ........................................................................................... 6 What is a Business Process? ........................................................................................................................... 6 Processes have two important characteristics: ........................................................................................................................6 Steps in the implementation of a BPR project ................................................................................................. 6 Stages of the BPR Approach ........................................................................................................................... 7 BPR Principles, Methods, and Tools................................................................................................................ 7 Assignment ................................................................................................................................................... 8

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Course Objectives The implementation of BPR as a direction to Cost Reduction , simplified and flexible business processes, Improved control ,and Competitive advantage The concept behind Business Process Reengineering (BPR) The relationship between planning and BPR The major components of BPR Goals and objectives of Reengineering What, when and How to reengineer BPR approaches and tools

Upon successful completion of this course, the student will be able to: Understand the implications of effective business processes on the overall effectiveness of any organization Perform basic process analysis to include process reengineering and redesign Apply problem-solving skills related to process enhancement in the right direction Have practical knowledge of the BPR and issues involved while reengineering Have better understanding of the strategic realignment while running a BPR program.and a host of related learning outcomes Introduction Business process re-engineering (BPR) is being attempted by many firms that are looking for radical gains from the successful redesign of their processes Business Process Reengineering is also known as Business Process Redesign, Business Transformation, or Business Process Change Management. BPR is a high risk, time consuming activity, with no guarantee of success, and yet many businesses claim to be re-engineering their processes Definition 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 Business Process Reengineering Enterprise engineering Focus on processes and not be limited to thinking about the Organizations. In Business Process Reengineering (BPR) a 'holistic' approach is employed that combines people, process and technology to achieve breakthroughs in business performance. Involve a radical redesign of business processes, which in turn may require restructuring the organization, upgrading information systems. Helped BPR professionals identify many problems and constraints that are common to their organizations Fragmented processes
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Duplicated effort Unnecessary tracking and rework Manual and paper intensive processes Inadequate software and systems training Lack of systems integration (barriers to information sharing and maintenance) Inaccurate and untimely information and so on.

Business Process Reengineering (BPR) means: an approach to performance improvement The overhaul of organizational structures management systems, employee responsibilities and performance measurements skills development Successful BPR can result: Enormous reductions in cost or cycle time Improvements in quality, customer service, or other business objectives BPR must have the full support of top management to succeed. BPR Requires Organizational restructuring Include the facility location, capacity, types of products, technology, and people Changes in Employees Behavior Training, education, job enrichment, job enlargement, and employee empowerment Business Functions Many recent management information systems developments aim to integrate a wide number of business functions. Enterprise resource planning, supply chain management, knowledge management systems, groupware and collaborative systems, Human Resource Management Systems and customer relationship management. Management information system (MIS) is a system or process that provides information needed to manage organizations effectively. Enterprise resource planning (ERP) is an integrated computer-based system used to manage internal and external resources, including assets, financial resources, materials, and human resources. Purpose is to facilitate the flow of information between all business functions inside the boundaries of the organization and manage the connections to outside stakeholders. Built on a centralized database and normally utilizing a common computing platform, ERP systems consolidate all business operations into a uniform and enterprise-wide system environment. Knowledge Management (KM) comprises a range of strategies and practices used in an organization to identify, create, represent, distribute, and enable adoption of insights and experiences. Such insights and experiences comprise knowledge, either embodied in individuals or embedded in organizational processes or practice. Knowledge Management efforts typically focus on organizational objectives such as improved performance, innovation, the sharing of lessons learned, integration and continuous improvement of the organization. Groupware and Collaborative System designed to help people involved in a common task achieve their goals. For example Video conferencing, E-mail, Online chart, Workflow Systems, MS Office Outlook applications. Human Resource Management System or also called HR modules, or simply "Payroll", refers to the systems and processes at the intersection between human resource management.

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Customer relationship management (CRM) is a broadly recognized, widely-implemented strategy for managing and nurturing a companys interactions with customers, clients and sales prospects. It involves using technology to organize, automate, and synchronize business processesprincipally sales activities, but also those for marketing, customer service, and technical support. The overall goals are to find, attract, and win new client . Customer relationship management denotes a company-wide business strategy. When an implementation is effective, people, processes, and technology work in synergy (advantageous) to increase profitability, and reduce operational costs. Business Process Management (BPM) is a management approach focused on aligning all aspects of an organization with the wants and needs of clients. Business process management attempts to improve processes continuously. It could therefore be described as a "process optimization process. Total Quality Mmanagemet (TQM) is a management concept invented by W. Edwards Deming. The basis of TQM is to reduce the errors produced during the manufacturing or service process, increase customer satisfaction, (make more efficient) streamline supply chain management. TQM is a philosophy which applies equally to all parts of the organization. TQM places the customer at the forefront of quality decision making. Greater emphasis on the roles and responsibilities of every member of staff within an organization to influence quality. All staff are empowered. Total Quality Management is often associated with the development, deployment, and maintenance of organizational systems that are required for various business processes. Six Sigma is Business improvement approach that seeks to find and eliminate causes of defects and errors in processes by focusing on outputs that are critical to customers. The term Six Sigma is based on a statistical measure that equates 3.4 or fewer errors or defects per million opportunities. Motorola pioneered the concept of Six Sigma. What is ERP? Enterprise Resource Planning (ERP) is an integrated computer-based system used to manage internal and external resources, including assets, financial resources, materials, and human resources. Its purpose is to facilitate the flow of information between all business functions inside the boundaries of the organization and manage the connections to outside stakeholders. Built on a centralized database and normally utilizing a common computing platform, ERP systems consolidate all business operations into a uniform and enterprise-wide system environment. An ERP system can either reside on a centralized server or be distributed across modular hardware and software units that provide "services" and communicate on a local area network. What is BPM? a business process is an execution of activities that produces business value. The term Business Process Management (or BPM) refers to activities performed by businesses to optimize their business processes. Approach to aachieve the strategic business objectives. What is SOA? is an architectural approach to building distributed systems where application functionality is presented as services to user applications or other services. SOA defines the way IT assets can be easily consumed by the business.

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Business Process Reengineering Advantages By reviewing the entire business, companies may well be able to spot areas where they can improve efficiency. Empowering employees; Eliminating waste, unnecessary management overhead, and obsolete or inefficient processes; Producing often significant reductions in cost and cycle times; Enabling revolutionary improvements in many business processes as measured by quality and customer service; and Helping top organizations stay on top and low-achievers to become effective competitors.

Business Process Reengineering Disadvantages BPR assumes that a companys existing processes are the main drag on its performance and the main barrier to the company reaching its full growth potential. But this may not be the case. BPR has come under fire for its clinical focus on efficiency and technology and for ignoring the human element of an organization that is subjected to a reengineering initiative. BPR has been accused of underestimating the resistance to change that is likely to exist in an organization.

What is a Business Process? A business process is a collection of activities which together produce something of value to a customer e.g. Customer Order Entry Set of logically related tasks performed to achieve a defined business outcome. Structured, measured set of activities. Activities designed to produce a specified output for a particular customer or market. How work is done within an organization

Processes have two important characteristics: 1) They have customers (internal or external) 2) They cross the organizational boundaries (occur across or between organizational units) Steps in the implementation of a BPR project

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Stages of the BPR Approach

BPR Principles, Methods, and Tools

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Assignment

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