Business Process Reengineering

Davenport “Today firms must seek not fractional, but multiplicative levels of improvement” “that is 10x rather than 10%” Business Process Reengineering(BPR) is a management approach aiming at improvements by means of elevating efficiency and effectiveness of the processes that exist within and across organizations. Business Process Reengineering is also known as BPR, Business Process Redesign, Business Transformation, or Business Process Change Management. Hammer and Champy(1993) define BPR as: "... 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." Johansson et al. (1993) provide a description of BPR relative to other processoriented views, such as Total Quality Management (TQM) and Just-in-time (JIT), and state: BPR-although a close relative, seeks radical rather than merely continuous improvement. It escalates the efforts of JIT and TQM to make process orientation a strategic tool and a core competence of the organization. BPR concentrates on core business processes, and uses the specific techniques within the JIT and TQM ‘toolboxes’as enablers” Thomas H. Davenport (1993) another well-known BPR theorist, uses the term innovation, which he says: ”…encompasses the envisioning of new work strategies, the actual process design activity, and the implementation of the change in all its complex technological, human, and organizational dimensions.” Levels of Reengineering Effort Effort Transform Transform Integrate Integrate Streamline Streamline Amount of Change Amount of

BPR Phases Scoping Analyze current situation Design new situation

Enabling Technologies for Reengineering Organize BPR project Select the core processes to be redesigned Describe current process and current results Analyze current improvement points Describe and implement ‘quick wins’ Determine the products of the process and the demands (CSF) Design new process using methods like:  Determine minimal steps using do wells  Determine design rules  Use benchmarks Test the new design Prepare change management program Implement change Evaluate and improve new design Expert Systems GIS and GPS Wireless data communication and portable computers Electronic Commerce Groupware Document Management and Imaging allowing generalists to perform specialist task allowing decision-making thru geocoding allowing field personnel to work office independent allowing the exchange of structured data allowing people who works together in a group increase their productivity allowing on-the-fly access to information assets

Implement changes

Change BPR Design Principles Role 1.Organize process around outcomes 2.Assign those who use the output to perform the processes 3.Integrate information processing into the word that produced the info 4.Treat distributed resources as though they were centralized 5.Link parallel activities 6.Empower the employees Description Case managers, multiple versions of the process Customer self service, account teams Process info at the source, capture info only once (now: straight-throughprocessing) Distinction between centralized/decentralis gone eg. Virtual purchasing unit Case team working at the same time, expert systems Reduced control, result-based salary

Scoping 1. Gain agreement that change is needed –create a mission 2. Form a Steering Committee 3. Select a Project Champion 4. Select a Process Owner 5. Select a Preliminary Team 6. Map core processes Analyze Current Situation 1. Select a process 2. Nail down the scope 3. Map out current processes 4. Check out team members 5. Find breaks in the pipeline Design New Situation 1. Select a process 2. Find breakthrough ideas 3. Detailing out a new process 4. Check out new process fit with other systems 5. Build a prototype 6. Testing, refining and testing again Implement Changes 1. Confirm the results of the Pilot 2. Determine the needs of widespread implementation 3. Document the benefits 4. Install and implement 5. Look for continuous improvement 6. Make it part of the culture Teams for Reengineering

There are some distinct differences between Quality Improvements and BPR Quality improvement Business Process Reengineering •Discarding the old process and replacing it with a new •Scope: business process and relations to other BP• Aimed at dramatic improvement •No starting points (clean sheet) •New situation must be incorporated in the quality manual.

•Analyzing and solving problems in current process •Scope: task or sub-process •Aims at incremental and continuous change •Used accepted starting points (HR, IT, Organization) •Process are described in a quality manual, guarded, checked and improved.

Critical Success Factors 1.. Top Management Sponsorship(strong and consistent involvement) 2. Strategic Alignment(with company strategic direction) 3. Compelling Business Case for Change(with measurable objectives) 4. Proven Methodology(that includes a vision process) 5. Effective Change Management(address cultural transformation) 6. Line Ownership(pair ownership with accountability) 7. Reengineering Team Composition(in both breadth and knowledge)

Steering Committee

BPR Team

BPR Team

BPR Team

Process Owner

Outsider

Insider

Fundamental Technologies for Reengineering  Networking  Databases  Desktop Tools

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