Presented to Sir Faqir Taj
Agenda
Definition of BPR
Why Reengineer?
Goals of BPR
Stages of BPR Methodology
BPR Life Cycle
What should be Reengineered?
When Should be Reengineered?
BPR Frameworks
What Reengineering is not..
Examples
Transformation
Challenges
Critical Success Factors
Conclusion
Business Process Reengineering
BPR is known by many names
Synonyms: business process redesign,
business transformation, process innovation,
business reinvention, change integration
These concepts focus on integrating both
business process redesign and
deploying IT to support the reengineering
work.
Business process reengineering
Sherwood-Smith (1994),
seeking to devise new ways of organizing
tasks, organizing people and redesigning IT
systems so that the processes support the
organization to realize its goals.
Redesign and analysis of workflow, in an
effort tomake it more efficient.
Why Reengineer???
Objectives of BPR
1. Customer focus
Meeting customer requirements closely
Providing convenience
2. Productivity
Optimize productivity
3. Efficiency
Cost
Speed/Time
Effort
BPR Methodology
Develop
business
vision and
objectives
Identify
process to
be redesigned
Design and
build a
prototype of
the process
Understan
d and
measure
existing
processes
Identify IT
levers
Stages in BPR Methodology
The
Envision
stage
The
Evaluation
stage
The
initiation
stage
The
Reconstru
ction stage
The
Diagnosis
stage
The
Redesign
stage
What Should be Reengineered?
Processes (not organizations) are
reengineered
Confusion arises because organizational
units are well defined, processes are often
not.
Formal processes are prime candidates for
reengineering
Formal processes are guided by written
policies; informal processes are not.
Typically involve several departments and
many employees.
More likely rigid and therefore more likely
to be based on invalid assumptions.
What Should be Reengineered?
Screening criteria
1. Dysfunction
Which processes are in
deepest trouble (most
broken or inefficient)?
2. Importance
Which processes have the
greatest impact on the
companys customers?
3. Feasibility
Which processes are
currently most likely to be
successfully reengineered?
10
When Should a Process be
Reengineered?
Three forces are driving companies towards
redesign (The three Cs, Hammer & Champy,
1993)
Customers
are becoming increasingly more
demanding
Competition
has intensified and is harder to predict
Change
in technology
constant pressure to improve; design
new products faster
flexibility and ability to change fast are
11
A BPR Framework
Technology
Organization
Job skills
Structures
Reward
Values
Process
Enabling technologies
IS architectures
Methods and tools
IS organizations
Core business processes
Value-added
Customer-focus
Innovation
Suggested Framework for
BPR
In general, keywords for successful BPR are
creativity and innovation
but BPR projects also need structure and
discipline, preferably achieved by following a
well thought-out approach.
BPR Framework due to Roberts (1994)
Starts with a gap analysis and ends with a
transition to continuous improvement.
The gap analysis focuses on three questions:
1.The way things should be
2.The way things are
3.How to reconcile the gap between 1 and
2
13
Roberts Framework for BPR
Opportunity
assessment
Current capability
analysis
Process Design
Risk and impact
assessment
Transition plan
Pilot test
Implementation
and transition
Infrastructure
modifications
Tracking and
performance
Continuous improvement
process
14
Reengineering is not
Automation of existing ineffective
processes
Sophisticated computerization of
obsolete processes
Playing with organization structures
Downsizing doing less with less
BPR Examples
Ford: Accounts Payable
Mutual Benefit Life: New Life
Insurance Policy Application
Capital Holding Co.: Customer Service
Process
Taco Bell: Company-wide BPR
Others
Ford Accounts Payable Process*
Purchasing
Purchasing
Vendor
Vendor
Purchase order
Receiving
Receiving
Goods
Copy of
purchase
order
Accounts
Accounts
Payable
Payable
Receiving
document
Invoice
?
PO = Receiving Doc. =
Payment
*Source: Adapted from Hammer and
Champy, 1993
Ford Purchase
Procurement
Process
Vendor
Vendor
order
Purchasing
Purchasing
Receiving
Receiving
Goods
Purchase
order
Goods
received
Data base
Accounts
Accounts
Payable
Payable
Payment
Ford
Before
Before
Accounts Payable
More than 500 accounts payable clerks matched
purchase order, receiving documents, and invoices
and then issued payment.
It was slow and cumbersome.
Mismatches were common.
After
After
Reengineer procurement instead of AP process.
The new process cuts head count in AP by 75%.
Invoices are eliminated.
Matching is computerized.
Accuracy is improved.
Example
Example of a customer in bank to
Apply for loan
Apply for ATM card
And to open a savings account
The essence of BPR is
Transformation
A 4-Pronged Approach to
Transformation
Transforming Process
Eliminate
Simplify
Automate
Base on Trust
Integrate
Join Up
Legislate
Transformation
Using Technology
Transforming Channels
Enterprise Architecture
Standards
Unified Databases
Unified Networks
SOA
Portals
Multiple Channels
24x7
Access
Common Service Centres
Mobile
Self-Service
Licensed Intermediaries
Transforming
People
Training
Change Management
CRM skills
Consultation
Empowerment
Education
Awareness
Challenges,
Critical Success Factors &
Critical Failure Factors
in BPR
Challenges in a BPR Exercise
1. Identifying Customer Needs & Performance
Problems in the current Processes
2. Reassessing the Strategic Goals of the
Organization
3. Defining the opportunities for Re-engineering
4. Managing the BPR initiative
5. Controlling Risks
6. Maximizing the Benefits
7. Managing Organizational Changes
8. Implementing the re-engineered Processes
9 Changes occasioned by BPR
1.
Work Units change
2.
Jobs change
3.
Peoples roles change
4.
Job preparation changes
5.
Measures of Performance & compensation change
6.
Criteria for career advancement change
7.
Values change
8.
Organizational Structures change
9.
Executives change
from functional departments to process teams
from simple tasks to multi-dimensional work
from controlled to empowered
from training to education
from activity to results
from performance to ability
from protective to productive
from hierarchical to flat
from scorekeepers to leaders
Critical Success Factors in BPR
1.
2.
3.
4.
5.
6.
7.
8.
Clear Vision for Transformation
Top management commitment
Identification of Core Processes for BPR
Ambitious BPR team
Knowledge of Reengineering techniques
Engaging external consultants
Tolerance of genuine failures"
Change Management
Critical Failure Factors in BPR
1. Trying to Fix a process instead of Changing it
2. Lack of focus on Business-critical Processes
3. Lack of holistic approach
4. Willingness to settle for minor results
5. Quitting too early
6. Limiting the scope of BPR by existing constraints
7. Dominance of existing corporate culture
8. Adopting bottom-up approach
9. Poor leadership
10. Trying to avoid making anyone unhappy
11. Dragging the BPR exercise too long.
Conclusion
BPR is about Radical Redesign of business
processes
BPR brings Efficiency, Effectiveness &
Customer-friendliness
BPR needs adoption of a structured
methodology
Top management commitment & Change
Management are critical to success
