Aim

To familiarise the Participants with the Characteristics of Business Process Reengineering(BPR) with a view to enable them to undertake BPR in their respective organisations

Learning Objectives
• Understand and be able to implement a BPR Strategy • Understand the main challenges in implementing a BPR Strategy

Sequence of Presentation
• Introduction to Business Process • Salient Features and Stages of Reengineering • Reengineering Initiatives • Forms of Reengineering • Features of Business Process Reengineering • Technology as Process Enabler • Mapping an Existing Process • Process Redesign and New Process Validation • Conclusion

Introduction to Business Process
• A measured and structured group of activities designed to produce a definite output for a particular customer or market. • Features: -They have customers- Internal or External - Not limited by boundaries -Recognisable beginning and End, interfaces and

What is BPR?
• Reengineering is the fundamental rethinking and redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service and speed. (Hammer & Champy, 1993)

BPR Versus Process Simplification
Process Simplification Process Reengineering

Incremental Change Radical Transformation Process-Led Vision-Led Assume Attitudes & Behaviors Change Attitudes & Behaviors Management-Led Director-Led Various Simultaneous Projects Limited Number of Initiatives

BPR Versus Continuous Improvement
Continuous Improvement Incremental Change People Focus Low Investment Improve Existing Work Unit Driven Process Reengineering Radical Transformation People & Technology Focus High Investment Rebuild Champion Driven

What is a Process?
• A specific ordering of work activities across time and space, with a beginning, an end, and clearly identified inputs and outputs: a structure for action. (Davenport, 1993)

Systems Perspective
Feedback

Inputs

Transformation

Outputs

Environment

Aspects of Processes
• Objects: Processes manipulate objects. These could be Physical or Informational • Entities: Processes occur between organizational entities. • Activities: Processes encompass two types of activitiesManagerial and Operational

Why Reengineer?
• Customers
– Demanding – Sophistication – Changing Needs

• Competition
– Local – Global

Why Reengineer?
• Change
– Technology – Customer Preferences

Why Organizations Don’t Reengineer?
• Complacency • Political Resistance • New Developments • Fear of Unknown and Failure

Origins
• Scientific Management. FW Taylor (1856-1915). • Frederick Herzberg - Job Enrichment • Deming et al - Total Quality Management and Kaizen • In Search of Excellence (Peters and Waterman) • Value-Added Analysis (Porter).

Key Characteristics
• Systems Philosophy • Global Perspective on Business Processes • Radical Improvement • Integrated Change • People Centred • Focus on End-Customers • Process-Based

Process Based
• Added Value
– BPR Initiatives must add-value over and above the existing process

• Customer-Led
– BPR Initiatives must meet the needs of the customer

Radical Improvement
• Sustainable
– Process improvements need to become firmly rooted within the organization

• Stepped Approach
– Process improvements will not happen over night they need to be gradually introduced – Also assists the acceptance by staff of the change

Integrated Change
• Viable Solutions
– Process improvements must be viable and practical

• Balanced Improvements
– Process improvements must be realistic

People-Centred
• Business Understanding • Empowerment & Participation • Organizational Culture

Focus on End-Customers
• Process improvements must relate to the needs of the organization and be relevant to the end-customers to which they are designed to serve

Business Process Flowchart Symbols
An Activity A Document

A Decision

Data (input as outputs)

Business Process Flowchart Symbols
A Predefined Process Start The Start of a Process The End of a Process Representing a Relation

End

Business Process Flowchart Symbols
Continuation of the process at the same page at an equal symbol with the same number. Used when a relation arrow crosses another relation arrow Off-Page Connector - Process will continue on the next page

Integration Relation - A relation to another module is identified and described

Data Flowchart Symbols
An Activity A Document

A Decision

Flat Data File (input as outputs)

Understand the Current Process
• Develop a Process Overview • Clearly define the process
– Mission – Scope – Boundaries

• Set business and customer measurements • Understand customers expectations from the process (staff including process team)

Understand the Current Process
• Clearly Identify Improvement Opportunities
– Quality – Rework

• Document the Process
– Cost – Time – Value Data

Understand the Current Process
• Carefully resolve any inconsistencies
– Existing -- New Process – Ideal -- Realistic Process

Develop & Communicate Vision of Improved Process

• Communicate with all employees so that they are aware of the vision of the future • Always provide information on the progress of the BPR initiative - good and bad. • Demonstrate assurance that the BPR initiative is both necessary and properly managed

Develop & Communicate Vision of Improved Process

• Communicate with all employees so that they are aware of the vision of the future • Always provide information on the progress of the BPR initiative - good and bad. • Demonstrate assurance that the BPR initiative is both necessary and properly managed

Develop & Communicate Vision of Improved Process

• Promote individual development by indicating options that are available • Indicate actions required and those responsible • Tackle any actions that need resolution • Direct communication to reinforce

Identify Action Plan
• Remove no-value-added activities • Standardize Process and Automate Where Possible • Up-grade Equipment • Plan/schedule the changes

Identify Action Plan
• Construct in-house metrics and targets • Introduce and firmly establish a feedback system • Audit, Audit, Audit

Execute Plan
• Qualify/certify the process • Perform periodic qualification reviews • Define and eliminate process problems • Evaluate the change impact on the business and on customers • Benchmark the process • Provide advanced team training

Stages of Reengineering
• • • • • • Realization Key Essentials Rethink Redesign Retool Evaluating Again

Realization
• Identify needs and threats from Competition and political, economic and social environments • Realization that it must show regularly, Incremental or Radical business improvement • Leadership at all levels to convince the work force of the necessity for change • Transformation through

Key Essentials
• State Mission, vision and Values of the Organisation in terms of Satisfaction of Customer Needs • Establish Key Performance Indicators for the Product or Service being offered.

Rethink
• Re-examine the current and existing processes of the organisation. Critical Questions:-Is the current process capable of producing competitive products and services? -Is the current process capable of satisfying all the essential requirements of the customer and the organisation?

Redesign
• Appraise the entire system of procedures, products and services with the associated work elements, tasks and jobs • Principles of Process Redesign:
– All essential Requirements of customers and organisation must be met – Job satisfaction must be given importance in the redesign process – The main objectives of redesigning processes are to eliminate all sources of waste and enhance the organisation’s competitive position

Retool
• Evaluate New technologies and tools required for improving the service and production process • Map the existing Technologies according to prequalified process charcteristics • Examine the weaknesses of the current technology and tools by determining the Mean time to failure, mean time to repair, mean time to dismantle • Incorporate the new technology and reengineer the process.

Evaluating Again
• Reevaluate by getting data on key performance success factors quality, productivity, customer satisfaction, market share, variation levels, profitably indexes, and cost reduction savings etc. • The responsibility of examining the performance of the process leis with the workers themselves, as they are best qualified to control the variables in the process.

Re-engineering Initiatives
• Re-engineering in Large Business (P &C, 8000 employees)2.Strategy: Fundamental Changes in Products, Customers , Processes and Technology) 3.Structural Changes • Managing a Large Re-engineering Initiative- 1. Involvement of Employees- helped build up ownership of the Project. 2. Map of key value Chain processes • Managing Change in a Reengineering Initiative-

Re-engineering Initiatives
• Re-engineering in Large Business • Managing a Large Reengineering Initiative • Managing Change in a Reengineering Initiative

Forms of Re-engineering
• Systems Re-engineering • Infrastructure Reengineering • Business Process Re-engineering

System Re-engineering
• Ensure Effective Utilisation of : 2.Computers 3.Data Storage 4.Programmer Productivity

System Re-engineering.. Contd…
• Hardware Engineering -Radical Shift in Computer Technology • Software Engineering- Adopt SW Technologies 4.Computer Aided Design (CAD) 5.Computer Aided Manufacturing (CAM) 6.Computer Integrated

CAD
• Technique used for Designing Products and Processes on Computers • Assists in Creation, Modification, analysis and optimization of design • CAD system incorporates Graphics for highlighting Physical Attributes of the Product and Engineering Systems for highlighting the

Benefits of CAD
• Increase in Productivity • Improvement in the Quality of Product or Process Design • More Standardized products and design documents

CAM
• Computers control and support the Automated Manufacturing Operations Benefits of CAM:3.Reliable Information inputs 4.Consistent Product Quality 5.Reduction in Labor Costs 6.Better Control and management of Equipment and materials 7.Improvements in Production Rate

CIM
• It integrates the engineering functions of CAD/CAM with the business functions of the firm. • Business Functions include Order Entry, Cost Accounting, Maintenance of Employee time records, payroll and customer billing. • Highest Level of Integration in Manufacturing

Infrastructure Reengineering
• Infrastructure of an Oraganisation includes People, Processes, Technology and Resources (Men, Machine and Material) • Infrastructure re-engineering involves restructuring of an entire organisation with the purpose of improving its productivity • Macro Level Issues:- Change in the degree of Centralisation of decision-making • Micro Level Issues:- Job definition and Content, job satisfaction,

BPR
• It is a methodical, regimented progressive move toward the critical examination, rethinking, redesign and implementation of the redesigned processes of an organisation. • It is also referred to as Business Process Improvement (BPI) • Can be applied Incrementally, but more often as Dramatic or Radical refurbishment of existing

Features of BPR
• • • • • • Process Orientation Project Goals Rule Breaking Creative Use of Technology Combining Several Jobs into one Decentralisation of DecisionMaking Authority • Multiple Versions of Processes • Checks and Controls are Reduced • A Single Point of contact for a Customer

Effects of BPR
1. Change in Nature of Jobs-from simple tasks to multi dimensional work 2. Change in roles-from controlled to empowered 3. Changes in preparation for the job-from training to education 4. Change in the focus of performance measures and compensation –from activity to results 5. Change in the criteria for promotion-from performance to ability 6. Change in values –from protective to productive 7. Change in responsibilities of Managers-from supervisors to Coaches 8. Changes in vertical organisational structurefrom hierarchical to flat 9. Change in the horizontal organisational structure-from functional departments to process teams.

Problems of Functional Division
• BPR and Functional Division • BPR and Division of Labor

Technology as Process Enabler
• Impact of Technology in Manufacturing 2.Automation
    Flexible Manufacturing Systems Robotics Automated Guided Vehicles Automated Storage and Retrieval Systems

Advantages of Automation
1. Improvement in Productivity 2. Efficient Use of Materials 3. Improvement in the Quality of the Product 4. Improvement in Work Environment for the Workers 5. Reduced Factory Lead-Time

Disadvantages of the Automation
• Negative Feedback from the Employees • High Initial Investment • Higher Level of Maintenance Needed • Less Flexible • Requirement of Technical Manpower

Mapping an Existing Process
• Have a thorough Understanding of the Existing Process • Map the existing Process first and analyse and improve on them to design new processes • Identify the breaks that prevents the process from achieving the desired result of value addition • Re-engineer the process to streamline the Break

Process Redesign and New Process Validation
• Process Validation measures the correspondence between a formal model of intended process behavior exhibiting a process. • It is done by allowing the user to simulate the execution of a process.

Validation.. Contd…

• Model Validation Specifics How can I assess the sufficiency of the functional pa

• How can I detect non-constant variation across the d

• How can I tell if there was drift in the process? • How can I assess whether the random errors are ind

• How can I test whether or not the random errors are

• How can I test whether any significant terms are mis

• How can I test whether all of the terms in the functio

Information Technology & BPR

Benefits From IT
• Assists the Implementation of Business Processes
– Enables Product & Service Innovations – Improve Operational Efficiency – Coordinate Vendors & Customers in the Process Chain

Computer Aided BPR (CABPR)
• Focus
– Business Processes – Process Redesign – Process Implementation

BPR Challenges

Common Problems
• Process Simplification is Common - True BPR is Not • Desire to Change Not Strong Enough • Start Point the Existing Process Not a Blank Slate • Commitment to Existing Processes Too Strong
– REMEMBER - “If it ain’t broke …”

• • • • • • • • • • • • • •

A Business Revolution Hammer was former CS professor switched to consulting guru business celebrity for a while Rhetoric of revolution trash existing business, rebuild from scratch process oriented view “engineer” better systems Insists new idea Old ways were good before New technology means new approach

• • • • • • • • •

Attention to Processes Is a good thing Some common sense stuff Simplify processes rather than automate Design rather than just accumulate (As Davenport says, this is tied to TQM) Exploit technology Minimize organizational barriers to process Put a single person in charge Simplify organizational chart if

• • • • • • • • • • • •

Quotes from Hammer I "American managers . . . must abandon the organizational and operational principles and procedures they are now using and create entirely new ones.... Business reengineering means starting all over, starting from scratch.... It means forgetting how work was done.... Old job titles and old organizational arrangements . . . cease to matter. How people and companies did things yesterday doesn't matter to the business reengineer .... Reengineering ... can't be carried out in small and cautious steps. It is an all-or-nothing proposition." Reengineering the Corporation

• Quotes from Hammer II • "In this journey we'll carry our wounded and shoot the • dissenters.... I want to purge from the business • vocabulary: CEO, manager, worker, job." Forbes ASAP, • Sept. 13, 1993 • "It's basically taking an axe and a machine gun to your • existing organization." Computerworld,Jan. 24, 1994 • "What you do with the existing structure is nuke it!" Site • Selection, February 1993

Common Problems with BPR
• Process under review too big or too small • Reliance on existing process too strong • The Costs of the Change Seem Too Large • BPR Isolated Activity not Aligned to the Business Objectives • Allocation of Resources • Poor Timing and Planning

Summary
• Reengineering is a fundamental rethinking and redesign of business processes to achieve dramatic improvements • BPR has emerged from key management traditions such as scientific management and systems thinking • Rules and symbols play an integral part of all BPR

Summary
• Don’t assume anything remember BPR is fundamental rethinking of business processes

Business Process Reengineering Methodology …

Current Products/Services

Future Products/Services

Information
Current Business Processes

Technology

Skills

S T R A T E G I C

D I R E C T I O N S

Information
Future Business Processes

Technology

Skills

Current Environments (AS-IS)

Future Environments (TO-BE)

Transition/Implementation (Change Management)
AIMCORP-Automated Information Management Corporation
73

Examination Questions

1. BPR helps-----a) Streamline flow of information b) Increase overall efficiency of business process c) Increase quality of Production d) Manage Customer better e) Decision making process 7. BPR is a radical change in business process. Relate • A complete structural change in business functions • Change in customer relationship • Maintain proper SCM • Business Transactions carried on the net • Preparing for e-business 3. Discuss Business Process Reengineering.

4. The term BPR refers to:b) Business Program Re-engineering c) Business Process Reengineering d) Business Process Re-application e) Business Process Re-structuring f) Business Plan Reengineering 5. “Not a single day should go by without some kind of improvement being made somewhere in the company”. This phrase is most applicable in case of :h) BPR i) TQM j) Kaizen k) ERP l) CRM 6. CIM is: n) Computer Integrated Marketing o) Computer Integrated Manufacturing p) Computer Integral Manufacturing q) Chip Integrated Manufacturing. 7. Explain the Stages of Re-engineering

8. Business Process automation relates to :b)Implementing a new software package c)Refining automated business processes d)Automating the work in Progress e)Automating the business process as it is without any changes f) Revamping the existing system 9. What is Business Process Reengineering? Briefly discuss the success factors that may lead to successful outcomes for BPR Projects. What are the major factors which differentiate BPR from TQM

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