BPR: Students Slides 3

Organizational Transformation:
a case study
 A typical mid-cap corporation needed to transform to meet new competitive pressures. The senior
executive pulled a small team together to build a plan based on industry best practices focused on
process and systems enhancements that were targeted at operational savings in Finance, IT, HR,
Supply Chain, and other functional areas. A small group of internal analysts provided data to the
team to build a financial model that promised to save hundreds of millions of dollars in operating
expenses, based on applying ratios of the best practices to the company’s financials. These huge
expected savings, then taken as a given, would provide much room for investing in reorganization
and systems implementations to achieve the savings. With a huge expected return on investment
firmly established, the executives signed up to launch the transformation effort.

 Right off the bat, rows of cubicles were set up to make room for a newly funded transformation
team of process and systems experts to do their work. Bright and energetic people showed up with
great credentials and fantastic analytical skills. They polled managers to build process maps of the
current state of the business. Then they applied their “knowledge base” to create a future state of
the business, which, of course, included the many organization and systems upgrades they had
proposed.
Organizational Transformation:
a case study
 A year into the process, it was time for the organization changes and systems to be rolled out to
the “troops.” Blank-faced line managers were now told to “buy in” and start producing the
hundreds of millions of dollars in expected savings by implementing the new organization
structure, systems, and processes. The money was already spent, so there was no turning back.
Unfortunately, the managers weren’t fully engaged in the process and had never agreed with many
of the suggested changes. In fact, some of the most high-leverage systems and process changes
had not even been addressed because they weren’t a part of the rollout, and the organization
changes actually created new problems bigger than the ones they intended to solve. Solutions
based on external best practices turned out to be impractical. They didn’t take into consideration
how work was actually done in that particular company or their unique approach to customer
experience. The process stalled while the rollout team struggled with numerous meetings to listen
to the troops’ concerns. By that time, of course, it was too late to make expensive adjustments on a
timely basis, and the transformation careened out of control.
Organizational Transformation:
a case study
 Seeing the impasse, the senior executive decided that an internal person should take point because
the troops were beginning to reject the entire transformation program. So, two years into the
process, a high-potential, upper middle manager was named transformation “czar.” The poor,
unsuspecting high potential manager, of course, had little operational clout but fought valiantly in
a last-ditch effort to regain momentum for the transformation effort. But, in the end, the effort died
a slow death. Some savings showed up as aggressive layoffs. Redeployments caused people to
have to do “more with less.” And a few of the systems changes actually worked. However, the
result was far from transformational. It was chalked up by the troops as another “flavor of the
month”—just one more layer of projects and programs adding to the overload and gridlock they
already faced. Or as one manager called it, “Just another sugar high.” Another quick peaking
activity followed by a crash.
Organizational Transformation:
a case study
 And what typically happens next? Management
sees the lack of results and looks for the next new
thing to launch, while employees become even
more skeptical and unwilling to salute each
successive clarion for change. The high-potential
czar is shown the door.

 Most of us have seen this type of effort play out

similarly to the curve shown in the figure here
beside
Steps towards
BPR
Implementation
BPR Methodology
(Hammer-Champy)

 Step 1: Set the vision and business goals

 Step 2: Establish a competent team  

 Step 3: Understand the current process

 Step 4: Redesign the process

 Step 5: Implement the reengineered process

Step 1: Set the vision and business goals 

 The senior management needs to identify the business situation;

customer expectations, competition, opportunities, etc.

 This will make it easier to understand the need for change and create
a clear vision of where the company needs to be in the future. Then
clarify the objectives in both qualitative and quantitative terms. 
Setting the vision

 Building imaginative thinking and a clear and compelling vision

for future processes is critical to the successful implementation of
BPR
 Process vision directs both long-term and day-to-day actions and
BPR implementation process
 A complete development of process vision includes evaluating
business strategy to anticipate future processes, conducting
customer-based assessment of performance targets,
benchmarking similar BPR efforts, and developing process and its
performance measures

Source: BPR implementation process: an analysis of key success and failure factors, by Jatin Aggarwal
In 1999, Business Process Management Journal
Step 2: Establish a competent team

 The team you select needs to be cross-

functional because expertise and perceptions
from all levels of the organization are necessary
to minimize the chances of failure 

 Once the vision is established by the CEO or

Board for the strategic guidance, an operational
manager who knows the ins and outs of the
processes needs to be appointed.
Step 2: Establish a competent team

 Successful reengineers recommend to appoint as leaders people

who are not only proven such but are also well-liked and accepted
by employees. The employees should feel that they trust the person
ushering in the changes

 It is equally important to have the right engineers with different

expertise from various fields to make the team complete. 
The importance of the BPR team
 Cross-functional BPR teams are a critical component of successful BPR
implementation
 Teams should be adequately composed. Team members should be experienced in
variety of techniques and should be people from both inside and outside the
organization
 The determinants of an effective BPR team are as follows:
 Competency of team members, their credibility within the organization and their creativity
 Team empowerment, motivation, effective team leadership, the training of members in
process mapping and brainstorming techniques
 Proper organization of the team complementary skills among team members, adequate size,
interchangeable accountability, clarity of work approach, and specificity of goals

Source: BPR implementation process: an analysis of key success and failure factors, by Jatin
Aggarwal In 1999, Business Process Management Journal
Step 2: communication across the team

 At this stage, it is important to have the goals

and strategies outlined properly. You can also
carry out surveys and benchmarking activities to
identify customer needs and analyze the
competition  

 It is then necessary to communicate now the

business case for change and the objectives of
the project to the rest of the employees. This
will encourage their feedback as well and help
them get ready for what’s to come.  
The importance of communication
 Effective communication is considered a major key to successful BPR-related
change efforts
 Communication is needed throughout the change process at all levels and for all
audiences, even with those not involved directly in the re-engineering project
 Effective communication between stakeholders inside and outside the
organization is necessary to market a BPR program and to ensure patience and
understanding of the structural and cultural changes needed as well as the
organization's competitive situation
 Communication should take place frequently and in both directions between those
in charge of the change initiatives and those affected by them. Communications
should be open, honest, and clear especially when discussing sensitive issues
related to change such as personnel reductions

Source: BPR implementation process: an analysis of key success and failure factors, by Jatin
Aggarwal In 1999, Business Process Management Journal
Step 3: Understand the current process

 In this step, one needs to select the process(es) to be redesigned. Such processes
that are broken, cross-functional, value-adding, have bottlenecks or have high-
impact on the organization, etc. can be prioritized

 Once these are selected, they would need to be mapped out using flowcharts or 
process maps to analyze them thoroughly to identify the gaps, inefficiencies,
blockers, as well as identify the various departments that are involved and
responsible

 Then one will need to define the right KPIs for the processes in order to monitor
that they have gained the desired effect once they are implemented. 
Step 4: Redesign the process

 Keeping the vision in mind, redesign a new process that effectively overcomes the
inefficiencies of the previous process. Here one will create a future-state map
that highlights the solutions identified for the issues of the current state process

 More and more the traditional top-down approach even in redesigning is

disappearing. Instead of expecting the employees to fall in line with the
reengineering program without demur, it is advisable to involve them to some
extent so as convince them that change is necessary to survive
People Empowerment

 As BPR results in decisions being pushed down to lower levels, empowerment of

both individuals and teams becomes a critical factor for successful BPR efforts
since it establishes a culture in which staff at all levels feel more responsible
and accountable and it promotes a self-management and collaborative teamwork
culture

 Empowerment entails that staff are given the chance to participate (at least partly)
in the redesign process. When empowered, employees are able to set their goals
and monitor their own performance as well as identify and solve problems that
affect their work, thus they are supporting the BPR efforts.
People Empowerment

 In reengineering, all key people must be openly and actively involved and should be
consulted at the various stages of the process by the BPR leaders. This includes line
managers, process owners those involved in human resources
 Training and education are also an important component of successful BPR
implementation. Organizations that undertake re-engineering projects may have to
considerably increase their training budget by 30-50 percent. BPR-related concept, skills,
and techniques as well as interpersonal and IT skills, skills in TQM implementation and
process analysis techniques are all important dimensions of training for BPR
 The culture of experimentation is an essential part of a successfully re-engineered
organization and, therefore, people involved or affected by BPR must be prepared to
endure errors and mistakes while re-engineering is taking place
Step 5: Implement the reengineered process

 Once the process has been redesigned, one can run a small test to see how it
works by monitoring with the KPIs you have defined earlier. This will allow to
make necessary adjustments to the process before implementing it company-wide.
If the new process works better than the current one, one can implement it on a
larger scale

 The necessary buy-in also of the implementation start is very important. Too
many firms get started on the change without trying to build the energy within
themselves to change. If one starts without the attitudinal change, the quality of
the rest of the change will be poor.
Findings while reengineering
• Reengineering requires a change of focus from management to the
customer
• The company’s apex need to always identify goals and purposes,
while keeping the company’s mission in mind
• In the process, managers must empower their teams and keep them
focused on results
• If a process continually doesn’t work, it’s time to produce a new one,
looking towards the future benefits, rather than the temporary
discomfort of the change
• Simple and optimized processes are better than complicated and
intricate processes

Business process reengineering examples: successful cases (heflo.com)