Business Process Reengineering

Presentation Outline

General Introduction

Business Process 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

refers to radical
redesign of business
processes.
Aims at
eliminating repetitive,
paper-intensive,
bureaucratic tasks
reducing costs
significantly
improving
product/service
quality.

Paradigm Shift

refers to 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.

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

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.
5

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.

Improvement-Similarities
Similarities
Basis of analysis
Performance measurement
Organizational change
Behavioral change
Time investment

Reengineering

Continuous Improvement

Process
Rigorous
Significant
Significant
Substantial

Process
Rigorous
Significant
Significant
Substantial

16

Improvement-Differences
Differences
Level of change
Starting point
Participation
Typical scope
Risk
Primary enabler
Type of change

Reengineering

Continuous Improvement

Radical
Clean slate
Top-down
Broad, cross-functional
High
Information technology
Cultural and structural

Incremental
Existing process
Bottom-up
Narrow, within functions
Moderate
Statistical control
Cultural

17

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 customers needs to
achieve Big performance gains

Why Organizations Dont

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
AnActivity
ADocument

ADecision

Data(inputasoutputs)

Business Process
Flowchart Symbols
APredefinedProcess
Start

TheStartofaProcess

End

TheEndofaProcess
RepresentingaRelation

Business Process
Flowchart Symbols
Continuationoftheprocessatthesamepage
atanequalsymbolwiththesamenumber.Used
whenarelationarrowcrossesanotherrelationarrow
OffPageConnectorProcesswillcontinueonthe
nextpage

IntegrationRelationArelationtoanothermoduleis
identifiedanddescribed

Data Flowchart Symbols

AnActivity
ADocument

ADecision

FlatDataFile(inputasoutputs)

Data Flowchart Symbols

ManualDataItem
ADatabaseFile
RepresentingaRelation
Continuation
OffPageConnector

Rules For Data

Symbols

Rules For Data Symbols

Start

Symbolusedtoidentifythestartofabusinessprocess

Generate
Purchase
Order
OK?

Activitiesmustbedescribedasaverb

Yes

Decisionshaveonlytwopossibilities(Yes&No)

No
Crossinglinesarenotallowed

End

Ifonesideofthedecisionhasnofurtherprocesses
definedthissymbolhastobeused

Rules For Data Symbols

I

Purchase
Order

Posting
ofBonus

Continuationsymbolwiththesamenumbermustbe
presenttwiceonthesamepage
Namethedocument
OffPageConnectorisusedtocontinueaprocessatthe
nextpageortolettheprocesstoflowoveratthe
previoustothenextpage.Ifmorethanoneisneededuse
A,B,C,D
Namethedata

Rules For Data Symbols

SubProcess
Delivery
BC4.04

PredefinedProcessesalwayshavearelationtoleveland
streambyanumberinthelinebelowasubprocess
description
Apredefinedprocessmustbedescribedinadifferent
flowchart.Tomaketherelationclearbetweenthe
predefinedprocessandthebelongingflowchartaunique
alphanumericnumbershouldbeassignedtothis
predefinedprocess.

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 Cs related to

Organization Re-engineering
Projects

The 3Cs of
organization Reengineering:

The 4Cs of effective

teams:

- Customers

- Commitment

- Competition
- Change

- Cooperation
- Communication
- Contribution

Key Steps
SelectTheProcess&AppointProcessTeam
UnderstandTheCurrentProcess
Develop&CommunicateVisionOfImprovedProcess
IdentifyActionPlan
ExecutePlan

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

Dont 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

Ability to 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 consultantdriven
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

Set business 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

Always provide 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/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

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 isnt 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

Dont assume anything - remember

BPR is fundamental rethinking of
business processes