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Process-oriented, Learning, Team-based, and Fastcycle organizational models Flat, flexible, focused on core competence Inside, empowered, interfunctional teams of knowledge workers are reengineering and continually improving core business processes. Think globally and act locally
To accomplish the organizations of the year 2000 and beyond firms must change the way they are organized, and employees at all levels must become information literate - not just computer literate.
BPR
Business Process Redesign
The fundamental rethinking and radically redesign of business processes to achieve dramatic improvement in critical, contemporary measures of performance such as cost, quality, service and speed.
The implementation of deliberate and fundamental change in business processes to achieve breakthrough improvements in performance. Enabled by IT
BPR
Business Process Redesign
Also known as Reengineering or Process Innovation is offered as an enabler of organizational transformation. Organization embrace a BPR approach when they believe that a radical improvement can be achieved by marring business process, organization structure, and IT change.
BPR
Hammer and Champy
It is an all-or-nothing proposition that produces dramatically impressive results. Most companies have no choice but to muster the courage to do it. For many, reengineering is the only hope for breaking away from the ineffective, antiquated ways of conducting business that will otherwise destroy them.
BPR
BPR Objectives:
To dramatically reduce cost Reduce time To dramatically improve customer services or to improve employee quality of life To reinvent the basic rules of the business e.g. the airline industry
taco bell from Mexican food to fast food to feeding people anywhere, anyhow. Customer satisfaction Organizational learning
BPR
Change:
To transform an organization, a deep change must occur in the key behavior levels of the organization: jobs, skills, structure, shared values, measurement systems and information technology.
Role of IT
BPR is commonly facilitated by IT e.g. Organizational efficiency Effectiveness Transformation
BPR
Efficiency
Applications in the efficiency category allow users to work faster and often at measurable lower cost Mere automation of manual tasks, resulting in efficiency gains (least deep)
Effectiveness
Applications in the effectiveness category allow users to work better and often to produce higher quality work. Requires changes not only in technology, but in skills, job roles, and work flow (deeper).
BPR
Transformation
Applications in the the transformation category change the basic ways that people and departments work and may even change the very nature of the business enterprise itself. A major change in the organization, including structure, culture, and compensation schemes (deepest).
BPR
Process
A process is set of logically related tasks performed to achieve a defined business outcome A collection of activities that, taken together, create value for customer e.g. new product for customer. This tasks are inter-related tasks
Business Function - Business Function -A group of similar resources that perform similar activities or tasks.
This is also called a task-oriented approach where the emphasis is placed on perfecting the execution of individual tasks.
Functional IS Systems -- also known as "silo" systems supported one business function
IS SYSTEM Procurement
Production / Operations
Finance / Accounting Human Resources Sales / Marketing
When information from one IS system was needed by another business function, then periodically information would pass from one IS system to the other.
BPR
How can Companies Identify their Business Processes. Examples
Manufacturing: As the procurement-toshipment process
Product development as the concept-toprototype process Sales as the prospect-to-order process
Business process
IT Systems organized around business processes:
Enterprise Resource Planning (ERP) or Business Engineering (BE) or ENTERPRISE SYSTEMS (ES)
Packaged, application software (modules) designed to address common business processes (across industries and business functions) Evolved, in part, from MRP (Materials Resource Planning) concepts, thus the 'rp' in erp and mrp Typically, vendors assume some customization and integration will be required -- but customization will NOT be to the core Vendors also assume system infrastructure exists (including: RDB, client, servers, browsers, network, etc.)
Common Features:
On-line system with no traditional batch interfaces One database for all data Clear definition of every data items Efficient support of back-office transaction processing; weaker in decision support and analytical support but improving Templates for processes of best practices Client/server computing, network infrastructure, RDB, GUI, Web Enablement Proprietary language and tools (e.g. ABAP/4 for SAP R/3)
Advantages:
Tight integration among all modules Single view of the business -same db, consistent reporting and analysis Process orientation: streamline processes Rich functionality : templates & reference model Flexibility: current and new environment Scalability: small group vs. enterprise Expandability: modular vs. total systems Interoperability with 3rd party solutions Rapid implementation: "vanilla" version
Challenges:
High cost with low payoff is the norm when vanilla version not implemented
Difficult to change /test all aspects that are affected simultaneously Difficult to design a new process that's an improvement (particularly when the organization's structure is an issue) Difficult to find/build software for new process. Difficult to change all aspects simultaneously Learning Curve Realities Idiosyncratic support needs are the norm
Catch up
Maintain Advantage
Low
Low Services / Marketing gap versus industry leader High
Different competitive investment strategies facing industry players as they consider there position versus industry leaders.
BPR
Embarking on Re-engineering
Persuade people to embrace or at least not to fight -the prospect of major change by developing the clearest message on: 1: A case for action- Here is where we are as a company and this is why we cant stay here show your balance sheet show competitors balance sheet 2: A vision statement - This is what we as a company need to become
BPR
Simple Rules
Start with a clean sheet of paper.
BPR
Simple Rules
Listen to customer Enhance those things that bring value to the customer or eliminate those that dont Be ambitious, focus your commitment to radical change on the process
BPR
Process Improvement and redesign Process
Magnitude
Improvement Sought Starting base Top management commitment Role of IT Improvement Increment 30-50% Innovation/Reengineering Radical 10x-100x
Low
High
Risk
Low
High
Magnitude of Change
2. Change Planning
inform stakeholders and organize re-generation team prepare project schedule and set performance goals
3. Process Pathology
B. Leaders Instigate and Sustain the change "Walk the talk" and "Block escape" brave fearless communicative
4. Social Re-Design -5. Technical ReDesign (reiterative until satisfied) a. explore alternative designs b. design new process c. design HR architecture (x-func/multi-discipline) d. select IT platform e. prototype holistic process
D. Affected Agents all those affected by the change "Segment them" - "Strategy and communication tactics for each" customers suppliers strategic partners stockholders community neighbors
6. Process Re-Generation a. implement HR changes b. develop & deploy IT support -- a tug- of- war game on forces aimed towards catastrophe and the ideal c. re-organizing: teams jobs training d. top management communication top management persuasion ( critical here) 7. Continuous Improvement a. measure performance b. link to quality improvement