Presentation - BPR - H Altun - E Çınar

Business Process Reengineering Business Process Redesign
Hasan ALTUN - Emrah INAR
1 / 41 13.12.2011
CE 58H - INNOVATION MANAGEMENT IN CONSTRUCTION
Hasan Altun 2004-09-08 - SLIDE 1 Emrah nar
Outline
1
Overview: What is, Why, and When BPR? Characteristics of BPR Implementation of BPR Benefits/Barriers/Challenges Case Study Summary
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2004-09-08 - SLIDE 2 Altun Hasan GEODESY, ARCHITECTURE & CONSTRUCTION 2011 (GAC-2011), 24-26 NOVEMBER 2011, LVIV, UKRAINE
Overview
Characteristics of BPR
Implementation of BPR
Benefits Barriers Case Study Challenges
Summary
What is BPR?
Process is 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)
Business Process is a group of logically related tasks that use the firm's
resources to provide customer-oriented results in support of the organization's objectives

Business Process Reengineering (BPR) first introduced in 1990 in a Harvard
Business Review article by Michael Hammer: Reengineering Work: Dont Automate, Obliterate. Hammer/Champy Reengineering the Corporation (1993)
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Overview
Summary
What is BPR?
Business Process 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. (Hammer & Champy, 1993)
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Overview
Summary
Processes Are Often Cross Functional Areas

CEO
Supplier
Marketing & Sales Purchase Production Distribution Accounting
Customer/ Markets Needs
"We cannot improve or measure the performance of a hierarchical structure. But, we can increase output quality and customer satisfaction, as well as reduce the cost and cycle time of a process to improve it."
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Value-added Products/ Services to Customers
Overview
Summary
What is BPR?
Spectrum of Change

Automation Rationalization of procedures Reengineering Paradigm shift
BPR is NOT

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Automation Downsizing Outsourcing TQM ISO9000 Change Management

Overview
Summary
What is BPR?
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Overview
Summary
Objectives of BPR

Customer Focus Speed Compression Flexibility Quality Innovation Productivity
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Overview
Summary
Alternatives to BPR
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Overview
Summary
Alternatives to BPR
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Overview
Summary
Why companies use BPR?
Why companies do NOT use BPR?

Customers

Complacency Employees Resistance Fear of Unknown and Failure
Demanding Sophistication Changing Needs Local Global Technology Customer Preferences
Competition

Change

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Overview
Summary
Systems Philosophy Input > Processing > Output
Process-Based BPR Initiatives must add-value over and above the existing process BPR Initiatives must meet the needs of the customer
Radical Improvement Process improvements need to become firmly rooted within the organization
Integrated Change Process improvements must be viable and practical
People Centred Empowerment & Participation
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
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Overview
Summary
The 3Rs of Reengineering

Redesign (Readiness for change) Retool (Transitioning to the change) Re-orchestrate (Institutionalizing the change)
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Overview
Summary
Methodology of a BPR implementation

In order to implement BPR to an enterprise the followings key actions need to take place: Selection of the strategic (added-value) processes for redesign. Simplify new processes - minimize steps - optimize efficiency -.(modeling). Organize a team of employees for each process and assign a role for process coordinator. Organize the workflow - document transfer and control. Assign responsibilities and roles for each process. Automate processes using IT(Intranets, Extranets, Workflow Management) Train the process team to efficiently manage and operate the new process Introduce the redesigned process into the business organizational structure
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Overview
Summary
Methodology of a BPR implementation

All methodologies could be divided in general 'model' stages: The Envision stage: the company reviews the existing strategy and business processes and based on that review business processes for improvement are targeted and IT opportunities are identified. The Initiation stage: project teams are assigned, performance goals , project planning and employee notification are set. The Diagnosis stage: documentation of processes and sub-processes takes place in terms of process attributes (activities, resources, communication, roles, IT and costs). The Redesign stage: new process design is developed by devising process design alternatives and through brainstorming and creativity techniques. The Reconstruction stage: management technique changes occur to ensure smooth migration to the new process responsibilities and human resource roles. The Evaluation stage: the new process is monitored to determine if goals are met and examine total quality programs.

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Overview
Summary
Characteristics of Service providers

Several surveys and benchmarking findings reveal the essential role of consultants in the BPR process This is due to the fact that consultants have the following attributes: They are objective and immune to internal politics They have followed the process before. They bring information and best practices from other companies. They are good communication paths between front line workers and customers, and the leaders of the company or organization.
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Overview
Summary
Application of a BPR The technique was applied first to multinational cooperations, such as IBM, T&T, SONY, GENERAL ELECTRIC, WALL MART, HEWLLET, PACKARD, DEC, KRAFT FOODS having as a result major downsizing in their organizational structures. Most of the times re-engineering is applied as a "must" when innovative IT tools are introduced to SMEs, tools such as; SAP, BAAN and various ERP systems. that IT does not only support management, IT changes the organizational structure
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Overview
Summary
Types of firms / organizations that BPR can be applied

Business Process Reengineering could be applied to companies that confront problems such as the following: High operational costs Low quality offered to customers High level of ''bottleneck" processes at pick seasons Poor performance of middle level managers Inappropriate distribution of resources and jobs in order to achieve maximum performance,
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Overview
Summary
Duration and implementation of BPR

The BPR technique, in general, is not a time consuming process. The duration of each BPR project varies from 6 -to 10 months. The cost of a BPR for projects applied to SMEs for selective processes varies depending on the complexity of the business environment and the number of processes for reengineering
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Overview
Summary
Implementation Procedure Of BPR
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Overview
Summary
Implementation Procedure Of BPR STEP ZERO - preparation and coordination of the project.

Objectives: To establish a strong management support To explain to the members of the BPR implementation team the implementation details of the project and their role in the successful outcome in the BPR effort. Actions taken: Explain to the top-level management the necessity to commit to the BPR project. Allocate the most capable employees to the BPR implementation team and assign roles for each one of them.

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Overview
Summary
Implementation Procedure Of BPR STEP 1 - Business diagnosis & measurements. Objectives: To diagnose & identify problematic areas in the current processes To measure the performance characteristics of the current processes based on measurable factors such as average cycle time, delays, number of mistakes or number of customer complaints. Actions taken: Diagram each process using a process management tool such as OPTIMA, ADONIS or BONAPART Record physical on the site measurements for each step of a process related to time, resources spent or efficiency Input all measurements in the process management tool for further evaluation and analysis. Identify added value processes that have a major impact on customer service.
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Overview
Summary
Implementation Procedure Of BPR STEP 2 - Selection of processes for change and modeling.

Objectives: To identify the strategic processes that are feasible to change To redesign and model the selected processes Actions taken Set the characteristics of the processes that are more important to the organizational goals Based on the characteristics identify the processes that will change based on the added value they provide and their feasibility for change. (see annex A-3). Redesign processes based on the characteristics that serve the organizational goals Simulate the processes in running environment using the process management tool Model the new process using the diagramming tool of the process management tool

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Overview
Summary
Implementation Procedure Of BPR STEP 3 - Technical design of the solution. Objectives: To automate modeled business processes (step 2) using networks and workflow tools To redesign and model the selected processes Actions taken: Establish network connections between process team members. Prepare intranet applications to exchange forms and documents between team members Prepare workflow application that will implement each step in the redesigned process automatically.
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Overview
Summary
Implementation Procedure Of BPR STEP 4 - Personnel adjustment & training. Objectives: To train personnel in the new ways of working using IT in the redesigned processes. To redesign and model the selected processes Actions taken: Adjust each position according to skills needed in the new process. Provide training in the operation of new processes, so employees will feel comfortable in the changing job environment
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Overview
Summary
Implementation Procedure Of BPR STEP 5 - Management of change & employee empowerment. Objectives: To establish a positive attitude for the change between employees To minimize the resistance to change between employees by empowering their position based on performance appraisal and bonus systems. Actions taken: Establish executive management determination for change and determinate any attempts of resistance to change. Facilitate the change process outlining the positive effects of change
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Overview
Summary
Implementation Procedure Of BPR STEP 6 - Introduction of new processes into business operations. Objectives: To set the time and date of operating under the new processes, emphasizing the fact that working under the old processes is not an acceptable practice Actions taken: Prepare and test all background resources (IT, documents, equipment) Set time and date for operating under the new processes. Do not allow any non-conformities in the operations of new processes
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Overview
Summary
Implementation Procedure Of BPR STEP 7 - Continuous improvement. Objectives: To capitalize from the BPR project and develop internal experts for other BPR projects Actions taken: Periodically evaluate the performance of business processes Plan the time and the resources for the next reengineering project.
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Overview
Summary
Tools for BPR

Simulation (Simulate organizational activities and scenarios) Flow diagrams (Modeling of the flows of things through the organization) Work analysis (Analysis of the existing process and proposed solutions) Application development (Create application to support/institutionalize the change) Workflow software (System controls into the hands of end-user help automate business processes and provide a quality interface between business systems)
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Overview
Benefits Barriers Challenges
Case Study
Summary
Common Benefits of BPR

Enterprise integration Departments are consolidated Several jobs are combined into one job Worker empowerment There is both horizontal and vertical reorganization There are fewer rules and less coordination is required Number of steps in a process are reduced This is simplification Inspections, checks and controls are reduced or eliminated The steps are performed in a more natural order
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Overview
Case Study
Summary
Common Benefits of BPR

Work is performed where it makes the most sense Wal-Mart moves the replenishment function to its suppliers Hybrid centralized/decentralized operations are prevalent IT enables decisions to operate autonomously Reorganization of the company's structure (downsizing) and employee empowerment. Jobs and processes become flexible so as to be executed according to the needs of each case, company's and customer's need's (hybrid centralized/decentralized operations) reductions of costs in the company, better quality in the products and services provided to the customers.
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Overview
Case Study
Summary
Common Problems

Commitment to Existing Processes Too Strong Desire to Change Not Strong Enough Process under review too big or too small Reliance on existing process too strong The Costs of the Change Seem Too Large Allocation of Resources Poor Timing and Planning Keeping the Team and Organization on Target
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Overview
Case Study
Summary
How to Avoid BPR Failure
BPR must be accompanied by strategic planning, which addresses leveraging Information technology as a competitive tool. Place the customer at the centre of the reengineering effort, concentrate on reengineering fragmented processes that lead to delays or other negative impacts on customer service. BPR must be "owned" throughout the organization, not driven by a group of outside consultants. Case teams must be comprised of both managers as well as those who will actually do the work. The Information technology group should be an integral part of the reengineering team from the start. BPR must be sponsored by top executives, who are not about to leave or retire. BPR projects must have a timetable, ideally between three to six months BPR must not ignore corporate culture and must emphasize constant communication and feedback.
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Overview
Summary
Ford Motor Company The Existing System Accounts Payable function 500 people Most work on mistakes between
Purchase Orders
Receiving Documents
Invoices
When Fords purchasing department wrote a purchasing order, it sent a copy to Accounts Payable. Meanwhile, the vendor sent an invoice to Accountants Payable. It was up to accounts payable, then, to match the purchase order against the invoice. If they matched, the department issued payment.
System Drawbacks
The department spent most of its time on mismatches, instances where the purchase order, receiving document, and invoice disagreed. In these cases, an accounts payable clerk would investigate the discrepancy, hold up payment, generate document, and all in gum up the works.
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Overview
Summary
Ford Motor Company
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Overview
Summary
Ford Motor Company
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Overview
Summary
Ford Motor Company The Suggested Improvement

Ford instituted invoiceless processing invoiceless W hen the purchasing department initiates an order, it enters the information into an on-line database. onThe matching is done automatically, and the computer prepares the check, which accounts payable sends to the vendor.
Ford Reengineered the Process > Now its Fast and Efficient

The new process cuts head count in accounts payable by 75%, eliminates invoices and improves accuracy. Matching is computerized. Ford discovered that reengineering only the accounts payable department was futile.
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Overview
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 play an integral part of all BPR initiatives Don t assume anything - remember BPR is fundamental rethinking of business processes
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2004-09-08 - SLIDE 39 Altun Hasan GEODESY, ARCHITECTURE & CONSTRUCTION 2011 (GAC-2011), 24-26 NOVEMBER 2011, LVIV, UKRAINE
Business Process Reengineering Business Process Redesign
Hasan ALTUN - Emrah INAR
1 / 41 13.12.2011

Presentation - BPR - H Altun - E Çınar

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Presentation - BPR - H Altun - E Çınar

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Business Process Reengineering Business Process Redesign

Hasan ALTUN - Emrah INAR

CE 58H - INNOVATION MANAGEMENT IN CONSTRUCTION

Hasan Altun 2004-09-08 - SLIDE 1 Emrah nar

Benefits Barriers Case Study Challenges

resources to provide customer-oriented results in support of the organization's objectives

CE 58H - INNOVATION MANAGEMENT IN CONSTRUCTION

Hasan Altun 2004-09-08 - SLIDE 3 Emrah nar

Benefits Barriers Case Study Challenges

CE 58H - INNOVATION MANAGEMENT IN CONSTRUCTION

Hasan Altun 2004-09-08 - SLIDE 4 Emrah nar

Benefits Barriers Case Study Challenges

Processes Are Often Cross Functional Areas

Customer/ Markets Needs

Value-added Products/ Services to Customers

CE 58H - INNOVATION MANAGEMENT IN CONSTRUCTION

Hasan Altun 2004-09-08 - SLIDE 5 Emrah nar

Benefits Barriers Case Study Challenges

Automation Rationalization of procedures Reengineering Paradigm shift

Automation Downsizing Outsourcing TQM ISO9000 Change Management

Benefits Barriers Case Study Challenges

CE 58H - INNOVATION MANAGEMENT IN CONSTRUCTION

Hasan Altun 2004-09-08 - SLIDE 7 Emrah nar

Benefits Barriers Case Study Challenges

Customer Focus Speed Compression Flexibility Quality Innovation Productivity

CE 58H - INNOVATION MANAGEMENT IN CONSTRUCTION

Hasan Altun 2004-09-08 - SLIDE 8 Emrah nar

Benefits Barriers Case Study Challenges

CE 58H - INNOVATION MANAGEMENT IN CONSTRUCTION

Hasan Altun 2004-09-08 - SLIDE 9 Emrah nar

Benefits Barriers Case Study Challenges

CE 58H - INNOVATION MANAGEMENT IN CONSTRUCTION

Hasan Altun 2004-09-08 - SLIDE 10 Emrah nar

Benefits Barriers Case Study Challenges

Why companies use BPR?

Why companies do NOT use BPR?

Complacency Employees Resistance Fear of Unknown and Failure

Demanding Sophistication Changing Needs Local Global Technology Customer Preferences

CE 58H - INNOVATION MANAGEMENT IN CONSTRUCTION

Hasan Altun 2004-09-08 - SLIDE 11 Emrah nar

Benefits Barriers Case Study Challenges

Systems Philosophy Input > Processing > Output

Integrated Change Process improvements must be viable and practical

People Centred Empowerment & Participation

CE 58H - INNOVATION MANAGEMENT IN CONSTRUCTION

Hasan Altun 2004-09-08 - SLIDE 12 Emrah nar

Benefits Barriers Case Study Challenges

The 3Rs of Reengineering

CE 58H - INNOVATION MANAGEMENT IN CONSTRUCTION

Hasan Altun 2004-09-08 - SLIDE 13 Emrah nar

Benefits Barriers Case Study Challenges

Methodology of a BPR implementation

CE 58H - INNOVATION MANAGEMENT IN CONSTRUCTION

Hasan Altun 2004-09-08 - SLIDE 14 Emrah nar

Benefits Barriers Case Study Challenges

Methodology of a BPR implementation

Benefits Barriers Case Study Challenges

Characteristics of Service providers

CE 58H - INNOVATION MANAGEMENT IN CONSTRUCTION

Hasan Altun 2004-09-08 - SLIDE 16 Emrah nar

Benefits Barriers Case Study Challenges

CE 58H - INNOVATION MANAGEMENT IN CONSTRUCTION