ORGANIZATIONAL CHANGE AND

BUSINESS PROCESS RE-

ENGINEERING
Overview
• This chapter will discuss about the concept of organizational
change is in regard to organization wide change, as opposed to
smaller changes, such as adding a new person, modifying a
program, etc.
• Also will communicate the BPR results to the company so they can
begin gaining an overall organizational commitment in replacing
legacy systems with an integrated ERP.
Objectives
• Comprehend why ERP systems are implemented to include Business
Process Re-engineering and “best practices”.

• Realize that senior management must be committed to the

implementation to assist in overcoming resistance to the change in
business processes that meet the company vision and goals.

• Develop an awareness of Organizational Project Management

Maturity Model (OPM3) and its uses in assessing an organization’s
ability to implement an ERP system successfully.

• Introduce business process management (BPM) and discuss its

relationship with BPR.
Contents
• Reason for Change
• Organizational Commitment
• Business Process Change
• Business Process Management
 Introduction
• An implementation can be plagued from the beginning by
lack of vision, a set of unrealistic goals that will be achieved
by the ERP system, or both.

• Business Process Reengineering (BPR) is used to assess the

organizational process change needed and streamline
processes and procedures.

• Organizational Project Management Maturity Model (OPM3)

assesses the company’s level of skills and ability to
implement an ERP system successfully.

• The OPM3 consists of three steps:

• Knowledge
• Assessment
• Improvement.
 Reason for Change
• The concept of organizational change is in regard to change
throughout the organization.
• A change in mission
• Restructuring operations
• New technologies
• Mergers
• Major collaborations
• “Rightsizing”
• New programs such as Total Quality Management

• ERP implementation projects usually mean radical changes

to an organization including fundamental changes in
procedures, processes and job functions.
 Organizational Commitment
• A successful implementation entails the unwavering
commitment and “will” of senior management and key
staff to see the implementation through.

• Senior management and key staff need to be steadfast in

the quest to succeed though all the problems.

• There are two key areas to consider to ensure

organizational commitment:
• A well-defined Communication Plan
• Organizational Project Management Maturity Model (OPM3)
 Change Management

• Change management is the process of developing a

planned approach to change in an organization.

• The objective is to maximize the collective benefits for all

people involved in the change and to minimize the risk of
failure.

• Change management must be an integral part of the

overall implementation planning strategy to implement an
ERP system successfully.
Organizational Project Management Maturity Model
(OPM3)
• Seeking to create a framework within which organizations
can re-examine their pursuit of strategic objectives via Best
Practices in organizational project management

• The OPM3 model is a three-step continuous improvement

process.
• Step 1: Knowledge
• Step 2: Assessment
• Step 3: Improvement
 Benefits of OPM3
• Helps organizations identify and deliver the right projects
to advance their strategy.

• Improved project performance and return on investment -

Isolates process improvements while forcing organizations
to consider external pressures increasing operational and
organizational efficiency

• Helps the organization align its strategy with the projects

that sustain business success

• Mitigates operating costs by keeping projects aligned to

business strategy
Figure 9-1 Organizational Project Management
Maturity Model
 Business Process Re-engineering
• A business process is defined as a set of logically related
tasks performed to achieve a defined business outcome.

• Re-engineering is when a business essentially dismantles

existing processes into individual activities and puts them
back together in a new set of business flows or sets of
business flows.

• Resistance to change will be high and require a significant

level of change management to succeed.
 BPR Methodology
• Preparation—Set goals and vision, identify teams, and
develop an inventory of processes that need to be
evaluated.

• Define the “as is” process and evaluate cross-

organizational issues.

• Map out “to be” processes based on best practices (i.e.,

related to ERP).

• Test and measure new processes based on meeting goals

and vision.

• Re-evaluation—revise, adjust to improve processes.

 BPR Methodology (Cont’d)
• Preparation-Drivers behind the need for BPR:
• Implementing a current purchased ERP system
• Automating current manual or error prone processes
• Improving service to customers
• Streamlining current processes to decrease time to market
• Participating in or conducting e-Marketplaces
• Reducing costs
• Addressing accountability
• Conducting e-Procurement
Figure 9-2 BPR Framework
 BPR Methodology (Cont’d)
• “As Is”
• Working with the vision and goals, the functional teams must
define the existing processes.
• Need both a written description and graphical depiction of each
and every process.

• “To Be”
• This phase addresses timing of processes and the changes needed
to meet the original set of goals.

• Testing and Measurement

• The testing and validation of each process is necessary to ensure
that a step was not missed or that a process was not achievable.
 Business Process Management

• BPM can be defined as:

• “A management discipline that treats processes as assets that directly
contribute to enterprise performance by driving operational excellence and
business process agility”

• BPM employs methods, policies, metrics, management practices and software

tools to continuously optimize the organization processes to improve
business performance against goals and objectives
 Difference between BPR and BPM

BPR BPM

Aims at eliminating the human Follows an iterative approach of

intervention and automating the making incremental improvements in
process, wherever possible the processes

All about automation Understands the dependencies and

and downsizing of the organization. interactions among the people,
system and the information needed
to do the tasks better
 Best Practices of BPM
• BPM systems help managers in understanding the working
of the business processes better so as to manage them
more efficiently

• Successful BPM implementation requires separating the

following:
• Human Intensive Processes - These processes are also known as
“knowledge work.” They depend on people to do the work.
• System Intensive Processes - These processes involve a large
number of automated transactions each day that do not require
human judgment
Figure 9-3 Example Processes
Figure 9-3 Dell’s BPM System
 Benefits of Implementing BPM

• BPM software aids in facilitating communication and

synchronization resulting in high productivity.
• The employees become more efficient, because the workflow
bottlenecks are removed using BPM software and thereby
reducing the idle time of the employees.
• BPM software helps companies to cut costs.
• Employees feel better to work in an organized business
processes architecture that was created using BPMS.
• Improved workflow results in better-quality products and
services and thus makes customers happy.
 Major Features of BPM
• Process modeling and simulation—Users can use the
software to design processes that need automation.
• Systems integration—BPM software lets other information
systems like ERP to be connected to the processes, and hence
information can flow between the systems.
• User interaction and collaboration—BPMS has Web forms
and other user interfaces to help the user to enter inputs and
make other changes to the process.
• Process execution and monitoring—BPMS lets job to be
routed through the process steps and sends notifications
electronically and also tracks performance indicators of
processes.
 The Four R’s of Process
• Roles—establishing a set of defined user roles that will not
change with employee absences or departures

• Relationships—identifying the interactions necessary to

complete a process

• Rules—developing a fixed set of process steps that will be

followed in most situations

• Routing—electronically transferring forms and documents

for review, approval, and so on.
 Implications for Management
• Senior management buy-in and support is needed, but it
must coincide with a strong rationale for change.

• OPM3 can help to assess the organizational skill set to

implement an ERP system successfully, meeting the goals
set out at the beginning of the project.

• Management involvement, especially in the

communications to staff on the business process changes,
will help to reduce staff anxiety.

• BPM can improve success of ERP implementation and

institutionalize continuous change of business process in
organization
Lesson Overview
• This chapter discussed the issues with business process change.
Summary
• Business process re-engineering and organizational project
management maturity model are tools that can assist a company in
putting together a successful project

• BPR will help develop rationale for moving from a legacy system to an
ERP system

• OPM3 will assess the company’s skills and abilities to implement an

ERP successfully.

• BPM will institutionalize small incremental changes to improve the

success of ERP systems
Question & Answers