BPR engineering methods

7/30/2019 BPR engineering methods

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Business Process

Reengineering

Presentation by:

Eesha Mehta


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Business Process Reengineering

Process

a collection of

activities that takesone or more kinds of

inputs and creates an

output that is of value

to a customer.

Business Process

a group of logically

related tasks usingthe firm's resources

to provide customer-

oriented results to

support organisation'sobjectives.


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Definition of Process

A process is simply a structured, measured set ofactivities designed to produce a specific output for aparticular customers or market.

-- Thomas Davenport

Characteristics: A specific sequencing of work activities across time and place

A beginning and an end

Clearly defined inputs and outputs

Customer-focus

How the work is done

Process ownership

Measurable and meaningful performance


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Processes Are Often Cross Functional Areas

Manage the white spaceon the organization chart!

Marketing

& Sales

Purchase Production Distr ibution Accounting

CEO

Supplier

Customer/

Markets

Needs

Value-added

Products/Services to

Customers"We cannot improve or measure the performance of a

hierarchical structure. But, we can increase output quality

and customer satisfaction, as well as reduce the cost and

cycle time of a process to improve it."


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What is Business Process

Reengineering? An organizational change method used to redesign an

organization to drive improved efficiency, effectiveness,and economy.

Organizational change tools may include:Activity based costing analysis

Baselining and benchmarking studies

Business case analysis

Functionality assessment

Industrial engineering techniquesOrganization analysis

Productivity assessment

Workforce analysis

Others, as needed (e.g., human capital tools)


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Definition BPR first introduced in 1990 in a Harvard Business

Review article by Michael Hammer: Reengineering Work: Don't Automate, Obliterate.

Hammer/Champy Reengineering the Corporation (1993)

Provided this definition: Reengineering is the fundamental rethinking and radical

redesign of business processes to achieve dramaticimprovements in critical, contemporary measures of

performance, such as cost, quality, service, and speed.


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Reengineering is the fundamental

rethinking and radicalredesign of

business processesto achieve dramat icimprovements in critical, contemporary

measures of performance such as cost,

quality, service, and speed.


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Key Words

Fundamental Whydo we do what we do?

Ignore what is and concentrate on what should be.

Need to understand why an organization does what it doesquestion all of the rules and assumptions that exist

Radical Business reinvention vs. business improvement

Radical redesign means disregarding all existing structures and

procedures, and inventing completely new ways ofaccomplishing work. Reengineering is about businessreinvention, begins with no assumptions and takes nothing forgranted.


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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.

Not looking for marginal or incremental improvements

or modification

Goal is dramatic improvements in performance.


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Key Words

Business Process

a collection of activities that takes one or

more kinds of inputs and creates an outputthat is of value to a customer.

Focus on the way the organization adds value through cross-functional business

processesMove away from function view; task based

thinking


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GOAL OF REENGINEERING

Reengineering is typically chartered in

response to a breakthrough goal for rapid,

dramatic improvement in processperformance.

Continuous improvement activities

peak; time to reengineer process

Breakthrough

Improvement

Continuous improvement

refines the breakthrough


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Competitive Forces Model

Threat of new

market

entrants

Bargaining

power ofsuppliers

Bargaining

power ofcustomers

Threat of

substitute

products &

services

The firm

Intra-

industry

competitors


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Why BPR Is Necessary

The Virtual Organization: Three Cs Driving Change Customers take charge.

Mass market v. a market of one

Backward integration

Informed consumers Demanding

Sophistication

Changing Needs

Competition intensifies. More and different kinds

Local

Global Big is not better

Technology changes the nature of competition.


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Why BPR Is Necessary

Change becomes constant. reduced product cycles

reduced time to develop new products

more environment scanning

Technology Customer Preferences

Companies created to thrive on mass production, stability, andgrowth cant be fixedto succeed in [such] a world.

Integrate people, technology, & organizational culture toRespond to rapidly changing technical & businessenvironment and customers needs to achieve Bigperformance gains


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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


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Four Revolutions Affecting

Business Today

New

Competitors

New Rules of

Competition

New

Technologies

New

Work Force


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The Cs related to

Organization Re-engineering ProjectsThe 3Cs of

organization Re-

engineering: Customers

Competition

Change

The 4Cs of effective

teams:

Commitment Cooperation

Communication

Contribution


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Some of the BPR Objectives

Improve Efficiency e.g reduce time to market,provide quicker response to customers

Increase Effectiveness e.g deliver higherquality

Achieve Cost Saving in the longer run

Provide more Meaningful work for employees

Increase Flexibility and Adaptability to change Enable new business Growth


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Spectrum of Change

Automation

Rationalization ofprocedures

Reengineering

Paradigm shift


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Spectrum of Change

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 moreefficient,improves efficiency and effectiveness.


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Spectrum of Change

Business Process Reengineering- refers to radicalredesign of business processes.

Aims at

eliminating repetitive, paper-intensive, bureaucratictasks

reducing costs significantly

improving product/service quality.

Paradigm Shift-refers to a more radical form of changewhere the nature of business and the nature of theorganization is questioned, improves strategic standingof the organization.


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RISKS & REWARDS


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BPR is Not?

BPR may sometimes be mistaken for the following fivetools:

1. Automationis an automatic, as opposed to human,operation or control of a process, equipment or asystem; or the techniques and equipment used toachieve this. Automation is most often applied tocomputer (or at least electronic) control of amanufacturing process.

2. Downsizingis the reduction of expenditures in order tobecome financial stable. Those expenditures couldinclude but are not limited to: the total number ofemployees at a company, retirements, or spin-offcompanies.


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3. Outsourcinginvolves paying another companyto provide the services a company mightotherwise have employed its own staff to

perform. Outsourcing is readily seen in thesoftware development sector.

4. Continuous improvementemphasizes smalland measurable refinements to an organization's

current processes and systems. Continuousimprovements origins were derived from totalquality management (TQM) and Six Sigma.


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Reengineering & Continuous

Improvement--Similarities

16

Reengineering Continuous Improvement

Similarities

Basis of analysis Process ProcessPerformance measurement Rigorous Rigorous

Organizational change Significant Significant

Behavioral change Significant Significant

Time investment Substantial Substantial


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Reengineering & Continuous

Improvement--DifferencesReengineering 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 controlType of change Cultural and structural Cultural


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Key Steps

Select The Process & Appoint Process Team

Understand The Current Process

Develop & Communicate Vision Of Improved Process

Identify Action Plan

Execute Plan


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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


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Select the Process

Review Business Strategy and Customer

Requirements

Select Core Processes

Understand Customer Needs

Dont Assume Anything


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Select the Process

Select Correct Path for Change

Remember Assumptions can Hide Failures

Competition and Choice to Go Elsewhere

Ask - Questionnaires, Meetings, Focus

Groups


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Appoint the Process Team

Appoint BPR Champion

Identify Process Owners

Establish Executive Improvement Team

Provide Training to Executive Team


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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

Ability to assume individual and collective

responsibility


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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


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2. 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)


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2. Understand the Current

Process

Clearly Identify Improvement Opportunities

Quality

Rework

Document the Process Cost

Time

Value Data

Carefully resolve any inconsistencies

Existing -- New Process

Ideal -- Realistic Process


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3. 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 theprogress of the BPR initiative - good and

bad.

Demonstrate assurance that the BPRinitiative is both necessary and properly

managed


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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

Remove no-value-added activities


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4. Identify Action Plan

Standardize Process and Automate Where

Possible

Up-grade Equipment

Plan/schedule the changes

Construct in-house metrics and targets

Introduce and firmly establish a feedback

system

Audit, Audit, Audit


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5. 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


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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 TooStrong

REMEMBER - If it isnt broke


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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


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How to Avoid BPR Failure

To avoid failure of the BPR process it is recommendedthat:

BPR must be accompanied by strategic planning, which

addresses leveraging Information technology as acompetitive tool.

Place the customer at the centre of the reengineeringeffort, concentrate on reengineering fragmentedprocesses 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.


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Case Example: Kodak

In 1987Kodaks arch-rival, Fuji came up with a new

35mm single-use camera

Kodak has no competitive offering

Kodaks Traditional Product DevelopmentProcess

Slow: would take 70 weeks to produce arival to Fujis camera!

Result: the new process, ConcurrentEngineering

Reduce turnaround time to 38 weeks


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Case Example: Kodak

Key Redesign StrategyApply innovative use of CAD/CAM + integrated

product design database

Allow engineer to design at computer

workstations Database collect each engineers work and

combines into overall design

Each morning, problems are resolved

immediately Manufacturing can begin tooling design just 10

weeks into product design instead of 28 weeks in

the past


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Ford Motor Company

Accounts Payable function

500 people

Most work on mistakes between

Purchase

Orders

Receiving

DocumentsInvoices


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Ford (cont)


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Ford (cont)


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WHY DOES

REENGINEERING FAIL?

Trying to fix a process instead of changing it

Ignoring everything except the process design

Quitting too early Reengineering from the bottom up

Neglecting peoples values and beliefs

Being willing to settle for minor results

Assigning someone who does not understand

reengineering to lead the effort


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FOUR STAGES OF CHANGE

Shock

Anger

Denial

Acceptance


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Think about the transition from shock to acceptance and how anorganization may overcome them.

Shock- usually the first reaction once a change has been announced. "Where in the world did this come from?" "Why?"

Anger- if change is viewed in a negative way, people may react in anger.

They blame other persons and begin to not accept or support the change."It wont work and I will not accept this." This can be very damaging to aprocess and needs to confronted.

Denial- this person begins to make excuses as to why he or she should notbe held accountable for anything that may go wrong. " Dont blame me if thisdoesn't work, it wasn't my idea."

Acceptance- this is the goal an organization needs to get all employees to.This person has accepted the change and begins to invision his or her rolein the new situation. "How can I help my organization in this process."


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HOW TO IMPLEMENT

3 steps to transition of change

1. Discontinuation of the old way of doing

business

2. Migration

3. Starting the new way of doing business


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Conclusion BPR is a multi-discipline approach for strategic

change

Methodology provides missing how to thatmust follow the why

BPR must be managed as a project

BPR must be owned by the organization, notdriven by consultants

BPR requires constant communication andfeedback

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