BUSINESS PROCESS

OUTSOURCING
 What is BPR?
• Reengineering is the fundamental
rethinking and redesign of business
processes to achieve dramatic
improvements in such as cost,
quality, service speed and output of
materials and services.
 (Hammer & Champy, 1993)
•
 The basic characteristics of
BPR
• Process innovation and reinvention]
• Enterprise process
• Performance improvement
• Increased economic growth
• Higher ‘competitive bar’
• High risk, high-return venture.
 Myths about BPR
• Downsizing tool
• Clean slate
• High failure rate
• Re-engineering and transformation
• BPR and TQM
 BPR vs. TQM
BPR & TQM share some features such


as:


• Principle of process
• Need for organizational and cultural
change
• Focus on customer needs
• Importance of process measurement
• Aim of improving business
performance for competitive gain
 Different between BPR &
TQM
TQM BPR

Level of change Incremental Radical

Frequency of change Continuous One-time

Focus on Process improvement Profit maximization

Implementation time Moderate Long

Role of IT Low Very high

BPR & Change management
• The concept of change management is
related to the social and cultural aspects
of the re-engineering process. It is
considered to be the more challenging
and essential ingredient for BPR
implementation.
• Managing change and people together is a
major contributing factor to the success of
BPR-related organizational change.
• Change management involves
several social aspects, such as
committed leadership, employee
empowerment, communication of
strategic goals, and project
management.
 Approaches in BPR
Implementation

According to Daniel E. O’Leary (2000),



there are
two approaches:


• Clean-slate re-engineering
• Technology-enabled re-engineering

 Clean-slate re-engineering
In this approach, the system design
starts with a
‘clean slate’, (i.e.) process start to re-

engineer
from the beginning and not from some

where
in the middle of the process. Process

are first re-

engineered to meet the enterprise

needs and
 Technology-enabled re-
engineering
• IT was used to help the enterprises in automating the existing
business processes, but now, technology is being used to
change those processes.

• The recent developments in IT have made BPR possible on a

radical and extensive scale, thereby making it more effective.

The merger of the two concepts has resulted in the



latest concept, termed technology-enabled



Re-engineering .


•
 Methodology for BPR
implementation
 There are five-stage approach:
• Phase 1: Plan BPR Implementation
• Phase 2: Identify opportunities for BPR in
the existing system
• Phase 3: Develop a blueprint of the
existing processes
• Phase 4: Develop an improvement plan
• Phase 5: Implementation

 Key Steps

Select The Process & Appoint Process

Team

Understand The Current Process

Develop & Communicate Vision Of

Improved Process
Identify Action Plan

Execute Plan
 Role of IT in BPR
• Installing new hardware and software, as well as
using the system analysis and modeling tools,
are major ingredients of BPR effort. So IT is
considered a major tool to support and enable
BPR implementation.
• The unique characteristics of IT that enable BPR
are:
• Automation of processes
• Store, retrieve, and distribute data
• Enable decision-making
• Control the process
• Process monitoring and performance
measurement

• BPR seeks improvements of


– Cost
– Quality
– Service
– Speed
