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Business Process Reengineering Faculty-Avadhesh Gupta

Business process reengineering involves the radical redesign of business processes to achieve dramatic improvements in critical performance measures like cost, quality, service and speed. It aims to eliminate repetitive tasks, reduce costs significantly and improve product/service quality. BPR is not the same as automation, downsizing, outsourcing or continuous improvement, as it involves a fundamental rethinking and redesign of processes from a clean slate rather than incremental changes. Key steps in BPR include selecting processes and teams, understanding the current process, developing a vision for improvement, identifying an action plan and executing the plan with IT support. Common pitfalls are not making true changes, over-reliance on existing processes and poor planning.

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46 views

Business Process Reengineering Faculty-Avadhesh Gupta

Business process reengineering involves the radical redesign of business processes to achieve dramatic improvements in critical performance measures like cost, quality, service and speed. It aims to eliminate repetitive tasks, reduce costs significantly and improve product/service quality. BPR is not the same as automation, downsizing, outsourcing or continuous improvement, as it involves a fundamental rethinking and redesign of processes from a clean slate rather than incremental changes. Key steps in BPR include selecting processes and teams, understanding the current process, developing a vision for improvement, identifying an action plan and executing the plan with IT support. Common pitfalls are not making true changes, over-reliance on existing processes and poor planning.

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skusonu
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Business Process Reengineering

FACULTY- AVADHESH GUPTA


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.”

3
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

4
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 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--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

17
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
Implementing a BPR Strategy
The C’s related to
Organization Re-engineering Projects
The 3C’s of The 4C’s of effective
organization Re- teams:
engineering:
- 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
 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 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
 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
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.

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