Business Process Re-engineering

01 – History & Introduction

 BPR - Evolution

• Organisations aim to increase productivity & quality

service and to reduce cost
• Traditional organisation structure, customer services and
business methods are out-dated
• Low barriers to entry, hence stiffer competition - locally &
globally
• Current business are:
– customer-focused and market driven
– process-focused and team-oriented
– Focused on speed & response time
– focused on customer relationships

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 BPR - Origins

• Business concepts of 1990

• Rework of TQM, continuous improvement
• Survey results shows that BPR was unsuccessful
• BPR leaders - James Champy; Thomas Davenport
• Deming and Juran discussed about BPR in TQM reports
• BPR was introduced in 70’s to the manufacturing
environment

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 Business Process

Davenport & Short’s definition

”a set of logically related tasks performed to achieve a

defined business outcome . A structured, measured set
of activities designed to produce a specified output for a
particular customer or market. It implies a strong
emphasis on how work is done within an organization”

- Davenport & Short, 1990

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 Business Process

Generic Definition

“ a set of activities that transform a set of inputs into a

set of outputs (goods or services) for another person
or process using people and tools”

• “ a collection of business activities that creates value

for the customer”

Inputs Outputs
Supplier Process Customer

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 Business Process

What are Business processes?

• sequences and combinations of business activities.
• management processes control and coordinate these
activities and ensure that business objectives are
delivered.
• support processes, the name implies, provide
infrastructural and other assistance to business
processes.

Business Processes can be further differentiated into

knowledge-based and operational processes.

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 Knowledge-based Processes

What are Knowledge-based processes?

• Product development, research activities, advertisement,

and management consulting.
• These processes typically are of non-standard nature
• They rely on the knowledge and creativity of the persons
involved.

Knowledge-based processes are not dominant in

Business Reengineering projects.

- Davenport; Jarvenpaa; Beers, 1996

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 Operational Processes

What are Operational processes ?

• Customer service, procurement, and manufacturing.

They are at the heart of most Business Reengineering
efforts.
• They are classified by their relative stability,
standardisation and repeatability.

Operational processes are further classified into key and

secondary processes. Key processes directly support the
mission and the strategies of the company.

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 Business Process Components

• They have people / customers (internal or external)

• They have information and decision made
• They have channels to transmit information
• They cross organizational boundaries, i.e., they occur
across or between organizational sub-units

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 Business Process Examples

• Generic Customer
– Marketing & Sales
– Product/Service Development
– Manufacturing
– Distribution
– Billing
– Order Processing
– Customer Service

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 Business Process Examples

• Industry-specific Customer
– Loan processing (Banking)
– Claims (Insurance)
– Grant allocation (Government)
– Merchandise return (Retail)
– Food order & preparation (Restaurant)
– Baggage handling (Airlines)
– Reservations (Airlines)

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 Business Process Examples

• Generic Administration
– Budgeting
– Training
– Human Resource
– Facilities Management / Maintenance
– Purchasing
– IT
– Finance / Accounts

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 Objectives & Drivers of BPR

Objectives
• Process Streamlining
• Flexibility & Responsiveness
• Global competitiveness
• Corporate rightsizing

Drivers
• Competition is Intense
• Globalisation has become a norm
• Change has become constant
• Customers have become powerful
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 Forces reshaping businesses

Previous Now

• Competition: Local/regional National/Global

• Markets: Mass Focused

• Operations: Controlled Flexible

• Focus: Performance Best service

• Performance: Short term Sustained

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 What is BPR ?

• All things to all people?

• Documenting procedures and processes to ISO
standards?
• Systems implementation?
• IS strategy deployment?

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 Business Process Re-engineering

Business Process Re-engineering is :

“ the fundamental rethinking and radical design of entire

business processes enabled by information technology to
achieve dramatic improvements in business performance “

- Hammer & Champy

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 Business Process Re-design

Business Process Re-design is :

“ the analysis and design of workflows and processes

within and between organizations “

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 Fundamental Rethinking

• Why do we do what we do?

• Why do we do it the way we do?
• Re-engineering first determines what a company must
do, then how to do it
• It takes nothing for granted
• It ignores what is and concentrates on what should be

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 Radical Redesign

• It means getting to the root of things

• It means starting all over again and isn’t about fixing
things
• It is low in cost with problem at the design stage rather
than at the execution stage
• It means enabling new or existing processes using IT

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 BPR & Change

• BPR is an integrated program of change which has a

major impact on an organization for several reasons:
– Sponsored by senior management
– Driven from the top down. Begins and ends with
customer value
– Applies to multiple business functions, departments
and locations
– Involves cultural, organizational and role changes that
must be managed
– Radical improvements will take place

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 BPR – Challenging current practices

Conventional: Automate existing process

Outdated processes
Analyse process.
Fix if broken + Automate process = reinforced - no radical
improvement

BPR: Challenge current practices

Clearly defined
Understand Invent new ways processes integrated
current situation and of working & design
future vision of + new process. Use IT
= to meet customer needs
and add value
the enterprise to enable change

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