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Business Process Reengineering

Business process reengineering (BPR) involves fundamentally rethinking and redesigning business processes to achieve dramatic improvements in critical performance measures like cost, quality, service, and speed. It requires starting with a blank slate without assumptions and implementing radical changes. The key steps of BPR include selecting processes to reengineer, appointing a project team, understanding the current process, developing and communicating a vision for an improved process, identifying an action plan, and executing the plan. The overall goal is to make fundamental improvements that directly benefit the customer.

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146 views

Business Process Reengineering

Business process reengineering (BPR) involves fundamentally rethinking and redesigning business processes to achieve dramatic improvements in critical performance measures like cost, quality, service, and speed. It requires starting with a blank slate without assumptions and implementing radical changes. The key steps of BPR include selecting processes to reengineer, appointing a project team, understanding the current process, developing and communicating a vision for an improved process, identifying an action plan, and executing the plan. The overall goal is to make fundamental improvements that directly benefit the customer.

Uploaded by

suryabba
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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BUSINESS PROCESS

REENGINEERING
“An organizational make-over”

“Reengineering is new, and it has to be done.”


Peter F. Drucker
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)
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)
BUSINESS PROCESS REENGINEERING

 The search for, and implementation of,


radical change in business processes to
achieve breakthrough results
 Synonyms: business process redesign,
business transformation, process innovation,
business reinvention, change integration
 Starting point: clean sheet of paper
BUSINESS PROCESS REENGINEERING

 Start from the future and work backwards

 BPR is not easy - serious work

 BPR is not free - financial & cultural

 BPR often driven by fear and greed

 Change is a “struggle”; BPR is a “war”


What is a Business Process?

 A group of logically related tasks that use


the firm's resources to provide customer-
oriented results in support of the
organization's objectives
Four Key Words

 Fundamental
 Why we do what we do?
 Why we do it the way we do it
 Radical
 Disregarding all existing structures and
procedures
 Inventing completely new ways of
accomplishing work.
 Dramatic
 Nor for marginal or incremental improvements
 Only when need exists for “heavy blasting”
 Processes
 Most business people are not “process-oriented”
 They are focused on tasks on jobs, on people, on
structures.
Value Metrics
 Quality
 Service
 Cost
 Cycle Time

Quality X Service
Value =
Cost X Cycle Time
The Crisis
 Often the efficiency of a company’s parts come
at the expense of the whole.
 Work that requires the cooperation and
coordination of several different departments
within a company is often a source of problems.
 Even when the work involved has major impact
on the bottom line, companies have no one in
charge.
Why Reengineer?

 Customers
 Demanding
 Sophistication
 Changing Needs

 Competition
 Local
 Global
Why Reengineer?

 Change
 Technology
 Customer Preferences
First Driving Force - Customers

 Demand products/services designed for


their unique needs.
 Expect product configured to their needs,
manufacturing plans, and convenient
payment terms.
Second Driving Force - Competition
 More different kinds
 Niche competitors
 Falling trade barriers
 Adequate is no longer good enough
 Start-up companies
 Carry no excess baggage
 Do not play by the rules
 Technology changes the nature of competition
Third Driving Force - Change

 Pervasive and persistent


 It is normality
 At an accelerating rate
 Ford Model T – an entire generation
 Computers – two years
 Executives think their companies have
change sensing radars
Quick definition of BPR

 Means: “starting over”


 Does not mean: tinkering with what
already exists or making incremental
changes
 Ask: “If I were recreating the company
today, given what I know and given current
technology, what would it look like?”
BPR is Not?

 Automation
 Downsizing
 Outsourcing
What BPR is not

 It is not another name for downsizing or


some other business fix of the month.
 Downsizing or restructuring only means
doing less with less
 Reengineering means doing more with less
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

(Source Coulson-Thomas, 1992)


BPR Versus Continuous
Improvement

Continuous Improvement Process Reengineering

Incremental Change Radical Transformation


People Focus People & Technology Focus
Low Investment High Investment
Improve Existing Rebuild
Work Unit Driven Champion Driven
Why Organizations Don’t
Reengineer?

 Complacency

 Political Resistance

 New Developments

 Fear of Unknown and Failure


Performance

 BPR seeks improvements of

 Cost
 Quality
 Service
 Speed
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
Systems Perspective
Feedback

Inputs Transformation Outputs

Environment
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
Key Steps

Select The Process & Appoint Process Team

Understand The Current Process

Develop & Communicate Vision Of Improved Process

Identify Action Plan

Execute Plan
Select the Process & Appoint Process
Team

 Two Crucial Tasks

 Select The Process to be Reengineered

 Appoint the Process Team to Lead the


Reengineering Initiative
Select the Process

 Review Business Strategy and Customer


Requirements
 Select Core Processes
 Understand Customer Needs
 Don’t Assume Anything
Select the Process

 Select Correct Path for Change


 Remember Assumptions can Hide Failures

 Competition and Choice to Go Elsewhere

 Ask - Questionnaires, Meetings, Focus


Groups
Appoint the Process Team

 Appoint BPR Champion

 Identify Process Owners

 Establish Executive Improvement Team

 Provide Training to Executive Team


Core Skills Required
 Capacity to view the organization as a whole

 Ability to focus on end-customers

 Ability to challenge fundamental assumptions

 Courage to deliver and venture into unknown


areas
Core Skills Required

 Ability to assume individual and collective


responsibility

 Employ ‘Bridge Builders’


Use of Consultants

 Used to generate internal capacity


 Appropriate when a implementation is
needed quickly
 Ensure that adequate consultation is sought
from staff so that the initiative is
organization-led and not consultant-driven
 Control should never be handed over to the
consultant
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

 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 new
patterns of desired behavior
Identify Action Plan

 Develop an Improvement Plan


 Appoint Process Owners
 Simplify the Process to Reduce Process
Time
 Remove any Bureaucracy that may hinder
implementation
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
Data Flowchart Symbols
An Activity

A Document

A Decision

Flat Data File (input as outputs)


BPR: LESSONS LEARNED

 Get the strategy straight first

 Lead from the top

 Create a sense of urgency

 Design from the outside in (customer)

 Combine top-down & bottom-up efforts


BPR: STRATEGY*

 Stakeholder Assessment - shareholders, customers,


employees
 Determine which stakeholder expectations should be met
to gain competitive advantage
 Determine how to redesign to meet expectations
 Map out IT solutions to support
 Develop & implement new processes, etc.

* Adapted from A.D. Little Inc.

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