Business Process Re-engineering

(BPR)

Tutorial

Business Process Re-engineering

BPR Concepts & Good Project Management Practices
Capture, communicate and verifying current and

redesigned business processes

Practical aspects of conducting a BPR effort

Produce deliverables Know who your customer/s are everyone you interface with !!!!!!

Objectives of a BPR Effort

Consider general process redesigning principles

Improve business processes Opportunity identification Feasibility analysis Set goals for redesigned process components Processes Activities Deliverables

Principles of BPR
General Principles Simplicity Empowerment Process Design Think horizontally Organizational Structure Remove barriers Support business processes Customer Interfaces Work from the customer perspective Automation Automate to advantage

Simpler is Better

Avoid Over-engineering Work hard to simplify Eliminate multiple points of contact with & for the customer Eliminate errors resulting from multiple contacts Eliminate need to reconcile differing information Reduce delays resulting from reconciliation REMEMBER: Simple Processes Less Costly More Flexible

Enable Workers to Make Decisions

Vertical Compression Process decision-making is not strictly a management task Workers are empowered Decision-making becomes part of work Advantages Fewer Communication Delays Lower Management Overhead Better Customer Response

Perform Steps in Natural Order

Parallel tasks rather than sequential procedure
Precedence set only by need Speed up the process by: Accomplishing tasks simultaneously Reducing time lag between early and late steps Less chance of changing requirements Less need for rework

Multiple Version Processes

Single solution process One-size-fits-all Too complex for standard/simple cases Processes require flexibility for: Different markets Different situations Resource variations Special customer requests Reengineered process contains: Simple, standard path (80% - 90%) Exception handling path (8% - 18%) Large complex path (2%)

Perform Work Where It Makes Sense

Administrative tasks performed by the process team Small purchases Tasks not requiring a specialist Work off-loaded from team Specialized capabilities More cost-efficient

Reduce Audits
Checks and Controls Controls cost more than purchases Use only when it makes economic sense Implement aggregate or deferred controls Reviews and Inspections Designs quality into a process Identifies problems when they occur Downstream inspections breaks down team spirit does little to improve quality adds higher costs Ex: Rework

Checks, controls and inspections add no value for the customer

Combine Several Jobs into One

Assign multiple process activities to one person
Avoid the Industrial Revolution Division of tasks Specialization of labor Unskilled work force No need for communication Create Task Inter-relationships

Organize Around Processes

Formation of teams to perform an entire process Do not split work by function (organization) Teams co-located Each person understands another's responsibility
Cross-Training

Eliminate/minimize hand-offs Reduces delays, errors and rework Reduces management overhead

Adopt Customer Perspective

Accessibility Be available when the customer wants to interact Information Require only the data which cannot be captured elsewhere Wants and Needs What are the customers goals, objectives - wants and needs? Are we meeting these? Are there unknown wants?

Provide Single Point of Contact

Case manager role Single point of contact Process owner Has access to all people and information systems involved in the process Empowered by management to change the process

Automate Appropriately
Avoid Costly Automating for Automations Sake Weigh automation benefits against costs Technology acquisition System development and maintenance Work force training Obsolescence Avoid automating current processes unless needed Do wrong things faster Slows changes to effect improved processes Automate Repetitive Tasks Automation strong point Leave interesting jobs for people Business Decision are made by people not machines or software

Where to Look for Process Improvement

Process Improvement
Opportunity Driven Begins with current process workflow Focuses on process components Identifies opportunities for incremental improvement Use as a checking mechanism for approach Incremental Products and services Resources Activities Organizations Interim deliverables

Performance Inhibitor
Look for A factor which negatively affects the businesss ability to attain its goals Result from: Poorly designed or not designed processes Invalid assumptions Environmental influences Presents a source for process improvement or reengineering opportunities

Opportunity
A chance for improvement in a business process that allows goals to be attained (fully or partially) Business process may have multiple opportunities Each opportunity should be weighed Costs Benefits Risks Priority of the goals it supports

Product and Service Opportunities

Customer How can the customers wants and needs be better understood? Are the customers wants and needs being met? Are there other markets for the products? Product / Service What improvements or added value can be made to products and services? Are products and services provided in a correct and convenient form?

Resource Opportunities
Suppliers (Who are the Suppliers Inputs) How can we communicate our wants and needs? Can we assist in improving our suppliers performance? Are there other suppliers capable of providing resources?

Resources What is state of the art? Material - quality, technology Finances - cost of funding Labor - skill set, training Are resources provided in a correct and convenient form? Are resources provided in a timely form? Is there additional value suppliers can provide?

Activity Opportunities
Cost Can the activity make more efficient use of resources? How can non-valueadding activities be minimized? Timeliness How can wait time (inqueue time) be reduced? How can lag time (outqueue time) be reduced? Performance Is the activity performed by the proper organization or role? Do the performers of the activity possess the proper skills, training, etc.? Is the proper environment and equipment available to the activitys performers?

Organizational Opportunities
Effectiveness Is the location structured to effectively perform its activities? Do the proper skills exist within the organization? Interaction How can the number be reduced to minimize hand-offs (workflows)? Is it conveniently located to pass work to other organizations?

Interim Deliverable Opportunities

Quality How can the quality of the deliverables be improved? How can deliverables be made more usable by the receiving activity?
Timeliness How can deliverables be passed between activities more quickly? How can the number of workflows be minimized?

Opportunity Analysis
Cost / Benefit Analysis Immediate (one time) costs On-going costs Immediate (one time) benefits On-going benefits Risk Analysis Risk identification Cost Likelihood Goal Analysis Goal/s are met (supported) by the opportunity Priority of these goals

Classification of Goals

Operational Goals
Quantify the redesigned business process Target the day-to-day operations of the business process Address The process as a whole Individual activities Interim and ultimate deliverables

Business Process Goals

Set performance levels for the entire business process in term of: Responsiveness What will be the interval from the initiating event to the ultimate deliverable? Financial What is the value of this process? How much does/will the process cost to perform? Organization What will the organizational structure look like? What will be the staffing levels?

Activity Goals
Set performance levels (Metrics) for individual activities in terms of: Timing How long will it take to perform? How long will work wait (in-queue, out-queue) before it is performed? Cost How much will it cost to perform? What is the value added to the ultimate deliverable? Performance What are the performance measures assigned to the person (organization) performing this activity? What incentives and/or consequences are in place for meeting this activitys goals?

Deliverable Goals
Set performance levels for interim and ultimate process deliverables in terms of: Quality How will we measure quality? Of these measurements, what level will we attain? Efficiency How quickly will this deliverable be passed between activities? What form will the deliverable be in when passed? Cost How much will it cost to pass this deliverable to the next activity?