You are on page 1of 20

BUSINESS PROCESS

OUTSOURCING
What is BPR?
• Reengineering is the fundamental
rethinking and redesign of business
processes to achieve dramatic
improvements in such as cost,
quality, service speed and output of
materials and services.
 (Hammer & Champy, 1993)

The basic characteristics of
BPR
• Process innovation and reinvention]
• Enterprise process
• Performance improvement
• Increased economic growth
• Higher ‘competitive bar’
• High risk, high-return venture.
Myths about BPR
• Downsizing tool
• Clean slate
• High failure rate
• Re-engineering and transformation
• BPR and TQM
BPR vs. TQM
BPR & TQM share some features such

as:

• Principle of process
• Need for organizational and cultural
change
• Focus on customer needs
• Importance of process measurement
• Aim of improving business
performance for competitive gain
Different between BPR &
TQM
TQM BPR

Level of change Incremental Radical

Frequency of change Continuous One-time

Focus on Process improvement Profit maximization

Implementation time Moderate Long

Role of IT Low Very high


BPR & Change management
• The concept of change management is
related to the social and cultural aspects
of the re-engineering process. It is
considered to be the more challenging
and essential ingredient for BPR
implementation.
• Managing change and people together is a
major contributing factor to the success of
BPR-related organizational change.
• Change management involves
several social aspects, such as
committed leadership, employee
empowerment, communication of
strategic goals, and project
management.
Approaches in BPR
Implementation

According to Daniel E. O’Leary (2000),


there are
two approaches:

• Clean-slate re-engineering
• Technology-enabled re-engineering

Clean-slate re-engineering
In this approach, the system design
starts with a
‘clean slate’, (i.e.) process start to re-

engineer
from the beginning and not from some

where
in the middle of the process. Process

are first re-


engineered to meet the enterprise

needs and
Technology-enabled re-
engineering
• IT was used to help the enterprises in automating the existing
business processes, but now, technology is being used to
change those processes.

• The recent developments in IT have made BPR possible on a


radical and extensive scale, thereby making it more effective.

The merger of the two concepts has resulted in the


latest concept, termed technology-enabled


Re-engineering .


Methodology for BPR
implementation
 There are five-stage approach:
• Phase 1: Plan BPR Implementation
• Phase 2: Identify opportunities for BPR in
the existing system
• Phase 3: Develop a blueprint of the
existing processes
• Phase 4: Develop an improvement plan
• Phase 5: Implementation

Key Steps

Select The Process & Appoint Process


Team

Understand The Current Process

Develop & Communicate Vision Of


Improved Process
Identify Action Plan

Execute Plan
Role of IT in BPR
• Installing new hardware and software, as well as
using the system analysis and modeling tools,
are major ingredients of BPR effort. So IT is
considered a major tool to support and enable
BPR implementation.
• The unique characteristics of IT that enable BPR
are:
• Automation of processes
• Store, retrieve, and distribute data
• Enable decision-making
• Control the process
• Process monitoring and performance
measurement

• BPR seeks improvements of

– Cost
– Quality
– Service
– Speed