Business Process Reengineering

Technology
Process
Organization
Business Process is a series of
logically related activities or tasks (such
as planning, production, or sales)
performed together to produce a defined
set of results.

Characteristics:
A specific sequencing of work activities across time and place
A beginning and an end
Clearly defined inputs and outputs
Customer-focus
How the work is done
Process ownership
Measurable and meaningful performance


Engineering is the process of
utilizing knowledge
and principles to design, build,
and analyze objects. It is a
necessary element for most items that
require construction.


Business Process Reengineering
is the thorough rethinking and radical (not
incremental) redesign of business processes
to break away from old ways of working
and achieve dramatic improvements in
critical areas, such as cost, quality, service
and speed.
through the in-depth use
of information technology. Also called
business process redesign.
Business Process Reengineering (BPR)
is the analysis and redesign of
workflows within and between enterprises in
order to optimize end-to-end processes and
automate non-value-adding tasks.

Michael Hammer's 1990 Harvard Business
Review article
Michale Hammer and James Champy
published their best-selling
book, Reengineering the Corporation.

The authors promoted the idea that sometimes
radical redesign and reorganization of an
enterprise is necessary to lower costs and increase
quality of service and that information technology is
the key enabler for that radical change.

Define corporate
visions and business
goals
Identify business
processes to be
reengineered
Analyze and
measure an
existing process
Identify enabling IT &
generate alternative
process redesigns
Evaluate and
select a process
redesign
Implement the
reengineered
process
Continuous
improvement of
the process
Visioning
Identifying
Analyzing
Redesigning
Evaluating
Implementing
Improving
Manage change and stakeholder interests
Enterprise-wide engineering
Process-specific
engineering
BPR Life Cycle
7 Reengineering Principles
1. Organize around outcomes, not tasks.
2. Identify all the processes in an organization and prioritize
them in order of redesign urgency.
3. Integrate information processing work into the real work
that produces the information.
4. Treat geographically dispersed resources as though they
were centralized.
5. Link parallel activities in the workflow instead of just
integrating their results.
6. Put the decision point where the work is performed, and
build control into the process.
7. Capture information once and at the source.

How to implement a BPR project
Starting with mission statements that define the purpose of the
organization and describe what sets it apart from others in its
sector or industry.
Producing vision statements which define where the organization
is going, to provide a clear picture of the desired future position.
Build these into a clear business strategy thereby deriving the
project objectives.
Defining behaviours that will enable the organization to achieve
its' aims.
Producing key performance measures to track progress.
Relating efficiency improvements to the culture of the
organization
Identifying initiatives that will improve performance.
Once these building blocks are in place, the BPR exercise can
begin.

Tools to support BPR
BPR can require managing a massive amount of
information about the processes, data and systems.

If you don't have an excellent tool to support BPR,
the management of this information can become an
impossible task.

The use of a good BPR/documentation tool is vital
in any BPR project.

Criteria for Selecting Processes
Broken
Bottleneck
Cross-functional or cross-organizational units
Core processes that have high impacts
Front-line and customer serving - the moment of the
truth
Value-adding
New processes and services
Feasible
Process Data
Basic Overall process data:
Customers and customer requirements
Suppliers and suppliers qualifications
Breakthrough goals
Performance characteristics: Cost, cycle time, reliability,
and defect rate.
Systems constraints: Budgetary, business, legal, social,
environmental, and safety issues and constraints.

Measure critical process metrics
Cycle time
Cost
Input quality
Output quality
Frequency and distribution of inputs
True BPR
True BPR requires vision, will power and a
comprehensive approach to change that
includes the following elements:
Leadership and guidance from top management
External focus through customer research,
economic analysis and competitive benchmarking
Use of advanced IT to enable breakthrough
performance
Effective change management


Impact of BPR on Organizational
Performance
People Process
BPR: Some action ideas
Combine several jobs into one
Decentralize decisions
Perform steps in the process in a natural order
Design flexibility into all parts of a new process
Reduce check points and controls
Minimize need for reconciliation
Set up hybrid centralized-decentralized
operations
BPR : Expected Changes
Work units change from functional departments
to process teams
Jobs change from simple tasks to multi-
dimensional work
Job preparation changes from training to
educations
Focus of performance measures and
compensation shifts from activity to results
Values change from protective to productive
Executive change from scorekeepers to leaders
Evaluation Criteria
Costs
Design and implementing the business process
Hire and train employee
Develop supporting IS
Purchase of other equipment and facilities
Benefits
Customer requirements
Breakthrough goals
Performance criteria
Constraints
Risk
Technology availability and maturity
Time required for design and implementation
Learning curve
Cost and schedule overrun
Things to remember about BPR:
Rule-breaking
Devotion to simplification
Creative use of information techology
Rapid payback
References
Hammer, Michael and Champy, James, Reengineering the
Corporation: A Manifesto for Business Revolution, New York:
HarperCollins Publishers, Inc., 2001
Davenport, Thomas H., Process Innovation: Reengineering Work
through Information Technology, Harvard Business School Press,
1992.
Hammer, Michael, Reengineering Work: Dont Automate,
Obliterate, Harvard Business Review, July-August, 1990.
Davenport, Thomas H. and Short, James E., The New Industrial
Engineering: Information Technology and Business Process Redesign,
Sloan Management Review, Summer 1990, pp. 11-27.