Business Process Reengineering

Information Resource Management

Presentation Outline
 General Introduction

 BusinessProcess Reengineering
BPR Symbols
 Understand and be able to implement a BPR Strategy
 Understand the main challenges in implementing a
BPR Strategy
 Conclusion: Summary
 Spectrum of Change
 Automation

 Rationalization of
procedures
 Reengineering

 Paradigm shift
Automation
 refers to computerizing
processes to speed up
the existing tasks.
 improves efficiency and
effectiveness.
Rationalization of Procedures
 refers to streamlining of
standard operating
procedures, eliminating
obvious bottlenecks, so
that automation makes
operating procedures
more efficient.
 improves efficiency and
effectiveness.
Business Process Reengineering
 refersto radical redesign of
business processes.
 Aims at
 eliminating repetitive,
paper-intensive,
bureaucratic tasks
 reducing costs
significantly
 improving
product/service quality.
Paradigm Shift
 refersto a more radical
form of change where
the nature of business
and the nature of the
organization is
questioned.
 improves strategic
standing of the
organization.
 Business Process Reengineering
“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.”

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Key Words
Fundamental
Why do we do what we do?
Ignore what is and concentrate on what
should be.
Radical
Business reinvention vs. business
improvement

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Key Words
Dramatic
 Reengineering should be brought in “when a need
exits for heavy blasting.”
Companies in deep trouble.
Companies that see trouble coming.
Companies that are in peak condition.

Business Process
a collection of activities that takes one or more
kinds of inputs and creates an output that is of
value to a customer.
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 BPR
&
The Organization
BPR is Not?
 BPR may sometimes be mistaken for the following five tools:

 1. Automation is an automatic, as opposed to human,

operation or control of a process, equipment or a system; or
the techniques and equipment used to achieve this.
Automation is most often applied to computer (or at least
electronic) control of a manufacturing process.
 2. Downsizing is the reduction of expenditures in order to
become financial stable. Those expenditures could include
but are not limited to: the total number of employees at a
company, retirements, or spin-off companies.
BPR is Not?
 3. Outsourcing involves paying another company to
provide the services a company might otherwise have
employed its own staff to perform. Outsourcing is
readily seen in the software development sector.
 4. Continuous improvement emphasizes small and
measurable refinements to an organization's current
processes and systems. Continuous improvements’
origins were derived from total quality management
(TQM) and Six Sigma.
 Reengineering & Continuous
Improvement--Similarities
Reengineering Continuous Improvement
Similarities
Basis of analysis Process Process
Performance measurement Rigorous Rigorous
Organizational change Significant Significant
Behavioral change Significant Significant
Time investment Substantial Substantial

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 Reengineering & Continuous
Improvement--Differences
Reengineering Continuous Improvement
Differences
Level of change Radical Incremental
Starting point Clean slate Existing process
Participation Top-down Bottom-up
Typical scope Broad, cross-functional Narrow, within functions
Risk High Moderate
Primary enabler Information technology Statistical control
Type of change Cultural and structural Cultural

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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.
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
Why Reengineer?
 Customers
 Demanding
 Sophistication
 Changing Needs

 Competition
 Local
 Global
 Customer Demands

• expect us to know everything

• to make the right decisions
• to do it right now
• to do it with less resources
• to make no mistakes
• expect to be fully informed
Why Reengineer?
 Competition
 Local
 Global

 Change
 Technology
 Customer Preferences
Business Process Reengineering

WHY ?
Integrate people, technology, & organizational
culture
To Respond to rapidly changing technical & business
environment and customer’s needs to achieve Big
performance gains
Why Organizations Don’t Reengineer?
 Complacency

 Political Resistance

 New Developments

 Fear of Unknown and Failure

Performance
 BPR seeks improvements of

 Cost
 Quality
 Service
 Speed
 BPR
Symbols
Business Process Flowchart Symbols
An Activity

A Document

A Decision

Data (input as outputs)

Business Process Flowchart Symbols
A Predefined Process

Start The Start of a Process

End The End of a Process

Representing a Relation
Business Process
Continuation Flowchart
of the process Symbols
at the same page
at an equal symbol with the same number. Used
when a relation arrow crosses another relation arrow

Off-Page Connector - Process will continue on the

next page

Integration Relation - A relation to another module is

identified and described
Data Flowchart Symbols
An Activity

A Document

A Decision

Flat Data File (input as outputs)

Data Flowchart Symbols
Manual Data Item

A Database File

Representing a Relation

Continuation

Off-Page Connector
Rules For

Symbols
 Rules For Data Symbols
Start Symbol used to identify the start of a business process

Generate
Purchase Activities must be described as a verb
Order

OK?
Decisions have only two possibilities (Yes & No)
Yes

No
Crossing lines are not allowed

If one side of the decision has no further processes

End defined this symbol has to be used
 Rules For Data Symbols
I Continuation symbol within the same number must be
present twice on the same page

Purchase
Order
Name the document

Off- Page Connector is used to continue a process at the

next page or to let the process to flow over at the
A previous to the next page. If more than one is needed use
A, B, C, D …

Posting Name the data

of Bonus
 Rules For Data Symbols
Predefined Processes always have a relation to level and
Sub-Process stream by a number in the line below a sub-process
Delivery description

BC 4.04
A predefined process must be described in a different
flowchart. To make the relation clear between the
predefined process and the belonging flowchart a unique
alpha numeric number should be assigned to this
predefined process.
Version Management
 For different versions of a business process or data
flow some mandatory information must be on the
flowchart.
 Name of the business process
 Unique number of the business process
 Revision number
 Date of last change
 Author
 Page number with total pages
Implementing a
BPR Strategy
 The C’s related to
Organization Re-engineering Projects
The 3C’s of organization The 4C’s of effective
Re-engineering: teams:
- Customers - Commitment
- Competition - Cooperation
- Change - Communication
- Contribution
Key Steps

Select The Process & Appoint Process Team

Understand The Current Process

Develop & Communicate Vision Of Improved Process

Identify Action Plan

Execute Plan
1. 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
 Abilityto assume individual and collective
responsibility
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
2. Understand the Current Process
Develop a Process Overview
Clearly define the process
Mission
Scope
Boundaries

Setbusiness and customer measurements

Understand customers expectations from the
process (staff including process team)
2. Understand the Current Process
Clearly Identify Improvement Opportunities
Quality
Rework

Document the Process

Cost
Time
Value Data
3. Understand the Current Process
Carefully resolve any
inconsistencies
Existing -- New Process
Ideal -- Realistic Process
3. Develop & Communicate Vision of
Improved Process
 Communicate with all employees so that they are
aware of the vision of the future

 Alwaysprovide information on the progress of the

BPR initiative - good and bad.

 Demonstrate assurance that the BPR initiative is

both necessary and properly managed
3. 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
4. Identify Action Plan
 Develop an Improvement Plan

 Appoint Process Owners

 Simplify the Process to Reduce Process Time

 Remove any Bureaucracy that may hinder

implementation
4. Identify Action Plan
 Remove no-value-added activities

 Standardize Process and Automate Where Possible

 Up-grade Equipment

 Plan/schedule the changes

4. Identify Action Plan
 Construct in-house metrics and targets

 Introduce and firmly establish a feedback system

 Audit, Audit, Audit

5. Execute Plan
 Qualify/certifythe 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
Information
Technology
&
BPR
Benefits From IT
 Assists the Implementation of Business Processes
 Enables Product & Service Innovations
 Improve Operational Efficiency
 Coordinate Vendors & Customers in the Process
Chain
 BPR
Challenges
Common Problems with BPR
 Process Simplification is Common - True BPR is
Not
 Desire to Change Not Strong Enough
 Start Point the Existing Process Not a Blank Slate
 Commitment to Existing Processes Too Strong
 REMEMBER - “If it isn’t broke …”
Common Problems with BPR
 Process under review too big or too small
 Reliance on existing process too strong
 The Costs of the Change Seem Too Large
 BPR Isolated Activity not Aligned to the Business
Objectives
 Allocation of Resources
 Poor Timing and Planning
 Keeping the Team and Organization on Target
How to Avoid BPR Failure
 To avoid failure of the BPR process it is recommended that:

 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.
How to Avoid BPR Failure
 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, so that the organization is not in
a state of "limbo".
 BPR must not ignore corporate culture and must
emphasize constant communication and feedback.
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 and symbols play an integral part of all BPR

initiatives
Summary
 Don’t
assume anything - remember BPR is
fundamental rethinking of business processes