BUSINESS

PROCESS
MANAGEMENT
NGO QUY NHAM
CONTENT
● Business process dedined
● Generic business process: Value Chain Model
● Business process reengineering defined
● Reasons for BPR
● BPR implementation
 VIDEO WATCHING:
WHAT IS BUSINESS PROCESS REENGINEERING?
(Go to TEAMS video)
What is Business Process?

● A 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.

● A business process is defined as a set of activities that, taken together,

produce a result of value to a customer, or add value to something else.
(Davenport)
● business process as a collection of inter-related events, activities and
decision points that involve a number of actors and objects, and that
collectively lead to an outcome that is of value to at least one customer.
GENERAL BUSINESS PROCESS VS OPERATIONAL PROCESSES
VALUE CHAIN
PRIMARY ACTIVITIES

INBOUND OPERATIONS OUTBOUND MARKETING SERVICE

LOGISTICS LOGISTICS AND SALES

VALUES
FIRM INFRASTRUCTURE

HUMAN RESOURCE MANAGEMENT

TECHNOLOGY DEVELOPMENT

PROCUREMENT

SUPPORT ACTIVITIES
 VALUE CHAIN

INBOUNDS MARKETING SERVICE

the processes related to The processes you use to persuade The activities related to
receiving, storing, and clients to purchase from you instead of maintaining the value of
distributing inputs internally. your competitors. The benefits you offer, your product or service
Your supplier relationships are a and how well you communicate them, are to your customers, once
key factor in creating value here. sources of value here. it's been purchased.

OPERATIONS OUTBOUNDS
The transformation activities Activities deliver your product or
that change inputs into service to your customer. These
outputs that are sold to are things like collection, storage,
customers. Here, your and distribution systems, and they
operational systems create may be internal or external to your
value. organization.
Detailed Generic Value Chain of the Banking Industry
GENERAL BUSINESS PROCESS VS OPERATIONAL PROCESSES
OPERATIONAL PROCESSES
GENERAL BUSINESS PROCESS VS OPERATIONAL PROCESSES
OPERATIONAL PROCESSES
 Example : PROCUREMENT PROCESS
CONTRACT CONTRACT
PAYMENT
DRAFT FINALIZATION
Draft contract Contract draw Goods and
and document up services supply
for tender

NEED SUPPLIER
DELIVERY
ANALYSIS SELECTION
Identify needs Evaluate Goods and
for good and suppliers services supply
services
Ingredients of a Business Process
● events
● Activities
● decision points
● Actors:
○ actors (human actors, organizations, or software systems acting on behalf of human actors
or organizations),

○ physical objects (equipment, materials, products, paper documents) and immaterial objects
(electronic documents and electronic records)
● one or several outcomes
In order to apply for admission, students first fill in an online form. Online applications are recorded in an information system to
which all staff members involved in the admissions process have access to. After a student has submitted the online form, a PDF
document is generated and the student is requested to download it, sign it, and send it by post together with the required
documents, which include:
○ Certified copies of previous degree and academic transcripts.
○ Results of English language test.
○ Curriculum vitae.
When these documents are received by the admissions office, an officer checks the completeness of the documents. If any
document is missing, an e-mail is sent to the student. The student has to send the missing documents by post. Assuming the
application is complete, the admissions office sends the certified copies of the degrees to an academic recognition agency, which
checks the degrees and gives an assessment of their validity and equivalence in terms of local education standards. This agency
requires that all documents be sent to it by post, and all documents must be certified copies of the originals. The agency sends back
its assessment to the university by post as well. Assuming the degree verification is successful, the English language test results are
then checked online by an officer at the admissions office. If the validity of the English language test results cannot be verified, the
application is rejected (such notifications of rejection are sent by e-mail).
Once all documents of a given student have been validated, the admission office forwards these documents by internal mail to the
corresponding academic committee responsible for deciding whether to offer admission or not. The committee makes its decision
based on the academic transcripts and the CV. The committee meets once every 2 to 3 weeks and examines all applications that are
ready for academic assessment at the time of the meeting.
At the end of the committee meeting, the chair of the committee notifies the admissions office of the selection outcomes. This
notification includes a list of admitted and rejected candidates. A few days later, the admission office notifies the outcome to each
candidate. via e-mail. Additionally, successful candidates are sent a confirmation letter by post.

With respect to the above process, consider the following questions:

1. Who are the actors in this process?
2. Which actors can be considered to be the customer (or customers) in this process?
3. What value does the process deliver to its customer(s)?
4. What are the possible outcomes of this process?
What is Business Process Reengineering?

● ... the analysis and design of workflows and

processes within and between organisations.

● Business activities should be viewed as more

than a collection of individual or even
functional tasks;

…they should be broken down into processes that

can be designed for maximum effectiveness, in
both manufacturing and service environment.

(Davenport)
What is Business Process Reengineering?
● BPR is the fundamental thinking
and radical redesign of business
processes to achieve dramatic
improvement in critical,
contemporary measures of
performance such as cost, quality,
service and speed.

(Hammer and Champy)

How to redesign this Procurement Process with the support
of digital technology?
CONTRACT CONTRACT
PAYMENT
DRAFT FINALIZATION
Draft contract Contract draw Goods and
and document up services supply
for tender

NEED SUPPLIER
DELIVERY
ANALYSIS SELECTION
Identify needs Evaluate Goods and
for good and suppliers services supply
services
Example of BPR
GROUP DISCUSSION
1. WHAT ARE FACTORS THAT DETERMINE THE DESIGN OF
(OVERALL & OPERATIONAL) BUSINESS PROCCESSES?
2. WHY DO COMPANIES UNDERTAKE BUSINESS PROCESS
REENGINEERING?
DETERMINANTS OF BUSINESS PROCCESSES DESIGN
● Strategy and Business models ● Others???
(purposes)
○ Flexibility: BP as guidlines ○
○ Quality & low costs à compliance
○
● Degree of Automation/Technology

● Quality level and degree of customer

contact

● Nature of demand
THREE REASONS FOR UNDERTAKING BPR
● Cost reduction

● Renewed competitiveness
○ To achieve parity or “best in class”

● Competitive dominance
CENTRAL TENETS OF BPR

● Radical change and assumption challenge;

● Process and goal orientation;
● Organisational restructuring;
● The exploitation of enabling technologies, particularly information
technology.
A company’s journey to process-oriented
improvement

Strategic (BPR)
IMPROVEMENT

Tatical (JIT, TQM)

TIME
Types of BRP
● Type 1: Cost improvement
○ Dramatic cost reductions in non-core processes (cost-reduction-focus)

● Type 2: To achieve parity or “best in class”

○ Reengineer core processes to attain competitive parity (competitive focus)

● Type 3: To effect a BreakPoint

○ Rewriting the rules and create the new definition of best in class
Characteristics of Reengineered Processes

● Several jobs are combined into one

● Workers make decision
● The steps in the process are performed in a natural order
● Processes have multiple versions
● Work is performed where it makes the most sense
● Checks and controls are reduced
● Reconciliation is minimised
● Single point of contact
BUSINESS PROCESSS REENGINEERING STEPS
Principles of BPR
The Effectiveness of BPR
The effectiveness of BPR depends on a few factors:
● The relevance or obsolescence of current business processes
● The ability and experience of those performing BPR
● The type of technological innovations available today
Outsourcing
 Reasons for outsourcing

● primarily outsource to reduce costs

 Impediments to Outsourcing

● Reluctance to lose control and flexibility

● A given function is too critical to outsource
● Anticipated negative reaction by customers
● Employee resistance
Managing the Relationship
Effective management of vendors is based on these 10 principles:
1. Maintain strategic responsibility — Operational issues must be handled at various levels,
but do not delegate the alignment of your firm’s interests with its vendor/ supplier.
Making sure that the relationship works is a job for a top executive.
2. Create multiple organizational links — Promote them at every level of the company.
3. Hold regular meetings — Get together periodically to iron out any issues.
4. Employ technology — Use the Internet, e-mail and such tools in management.
5. Define escalation processes — Everyone should know the processes to be followed
when issues need to be elevated to higher levels.
6. Use a scorecard — Define and apply metrics that will gauge success.
7. Apply carrots and sticks — Motivate employees with fair incentives and penalties.
8. Reward your vendor’s employees — Without becoming a co-employer, find ways to
motivate and recognize the employees of your outsourcing partner.
9. Define the change process — How will both firms address the need for change?
10. Honor the relationship — Carefully manage, respect and nurture the outsourcing
relationship. It is a strategic asset for your company.