Business Process Re-engineering

http://www.youtube.com/watch?v=PeShQ25-z7M

What is BPR? (Geoff) Why Implement BPR? (Dan) Radical Change v Continuous Improvement

(Mark) Implementing BPR – the 7 steps (Murali) BPR and other methodologies (Yutian) Predictors of Success and Failure (Yos) Case Studies will be referred to (Tracy)

Companies traditionally are organised to make decisions, operate, allocate resources and plan within functional specialisations ◦ Division of Labour (Adam Smith 1776)

BPR diverts attention away from functional, stove piping to cross functional, value creating processes

It’s a rope! It’s a

snake!

A wall!

It’s a fan!

A tree

!

- The complete set of activities or tasks that fulfil a customer’s specific requirement (Hammer)

- A focus on process helps to rationalise enterprise-wide results over functional ones as opposed to functional thinking (which) concentrates only on individual performance, not enterprise performance.

A fundamental rethink of the way things are done. Its primary purpose is to increase effectiveness of accomplishment of the company’s management, administrative and operational tasks

A radical redesign of processes in order to gain significant improvements in cost, quality and service

BPR improves ◦ Customer experience/product quality

◦ Performance of business processes

◦ Refocus on value adding activity (eliminate waste)

◦ Alignment of all functions to corporate goals

◦ Ability to cope with external environment (competitive forces)

Clean Slate (Hammer & Champy) ◦ Challenge underlying assumptions◦ Clean sheet – start from scratch◦ BPR is radical and dramatic change

Dirty Slate (Davenport & Stoddart)◦ Continuous improvement◦ Clean slate is a myth

THE SEVEN STEPS

Hammer & Champy , 1993

shows how a work flow through an organization

Which one is in deepest trouble? Which one gives greatest impact on customer? Which on is more likely feasible?

Identifying number of steps in the process Task time/dead time/wait time Steps that fail to yield Value added? Blockage?

What the customer require from the process?

‘most creative part and demands creativity, imagination, inductive thinking and touch of craziness’ – (Hammer & Champy, 1993)

Implementing proposed process on a small scale, for a limited time- to test

If the test is successful- the new process can be rolled out across the organization

TQM◦ Continuous improvement

◦ Longer period

◦ Tinkers with existing processes NOT redesign it

◦ Primarily improve quality of activities

Automation◦ Increase efficiency of task

◦ Normally retains old process but speeds it up

◦ Does not reorganise work

Downsizing◦ Rapid elimination of HR

◦ Reduce costs

◦ Does not restructure works and processes

Management commitment

Employee involvement

Duration of BPR implementation

Communication & Resistance to Change

Realistic Goals & Expectations

Selection of Processes for Reengineering

Holistic perspective

IT integration

Past processes embedded in culture

Politics & Power

Questions?

Overview 1990’s US firm, manufacturer of industrial automation

and control units Teams moved from a specific function into multi-

skilled teams to focus on entire product. Plant was shut down for intensive training sessions,

including the requirement to change (radically) Pay for Performance introduced Reduced defect rates (by 70%), rejects (57%), cycle

time on parts (72%), customer lead times (+70%), inventory investment (46%)

Train, nurture and facilitate adaptation to change

Question everything Use a systematic methodology to conduct

BPR IT should support people, production and

services BPR must be aligned and continuous