Business Process Reengineering

Presentation Outline
 General Introduction

 Business Process Reengineering

BPR Symbols
 Understand and be able to implement a BPR Strategy

 Understand the main challenges in implementing a BPR

Strategy
 Conclusion: Summary
 Spectrum of Change

 Automation
 Rationalization (way

of
of working more effective)

procedures
 Reengineering
 Paradigm shift
 Automation
 refers to computerizing
processes to speed up
the existing tasks.
 improves efficiency and
effectiveness.
 Rationalization of Procedures
 refers to streamlining of
standard operating
procedures, eliminating
obvious bottlenecks (problems
that delays problems), so that

automation makes
operating procedures
more efficient.
 improves efficiency and
effectiveness.
Business Process Reengineering
 refers to radical (beleif for extreme
change)redesign of business

processes.
 Aims at
 eliminating repetitive,
paper-intensive,
bureaucratic (org operative by large no
of officials)tasks

 reducing costs
significantly
 improving
product/service quality.
 Paradigm Shift
 refers to a more radical
(beleif for extreme change)form of

change where the nature

of business and the
nature of the
organization is
questioned.
 improves strategic
standing of the
organization.
Business Process Reengineering
 “Reengineering is the fundamental
rethinking and radical(beleif for extreme

redesign of business processes to

change)

achieve dramatic improvements in

critical, contemporary
(existing/happening now)

measures of performance such as cost,

quality, service, and speed.”

3
 Key Words
 Fundamental
 Why do we do what we do?
 Ignore what is and concentrate on what
should be.
 Radical
 Business reinvention vs. business
improvement

4
 Key Words
 Dramatic
 Reengineering should be brought in “when a need
exits for heavy blasting.”
 Companies in deep trouble.
 Companies that see trouble coming.
 Companies that are in peak condition.

 Business Process
 a collection of activities that takes one or more kinds
of inputs and creates an output that is of value to a
customer.
5
BPR & The
Organization
 BPR is Not?
 BPR may sometimes be mistaken for the following five tools:

 1. Automation is an automatic, as opposed to human,

operation or control of a process, equipment or a system; or the
techniques and equipment used to achieve this. Automation is
most often applied to computer (or at least electronic) control of
a manufacturing process.
 2. Downsizing is the reduction of expenditures in order to
become financial stable. Those expenditures could include but
are not limited to: the total number of employees at a company,
retirements, or spin-off (a product that develops from another important product) companies.
 BPR is Not?
 3. Outsourcing involves paying another company to
provide the services a company might otherwise have
employed its own staff to perform. Outsourcing is
readily (quickly) seen in the software development sector.
 4. Continuous improvement emphasizes small and
measurable refinements to an organization's current
processes and systems. Continuous improvements’
origins were derived from total quality management
(TQM) (is a structured approach to overall organizational management. The focus of the process is to improve the
quality of an organization's outputs, including goods and services, through continual improvement of internal practices) and

Six Sigma ( (6σ) is a set of techniques and tools for process improvement, disciplined, data-driven approach and
methodology for eliminating defects)
 Reengineering & Continuous
Improvement--Similarities

Reengineering Continuous Improvement

Similarities
Basis of analysis Process Process
Performance measurement Rigorous Rigorous
Organizational change Significant Significant
Behavioral change Significant Significant
Time investment Substantial Substantial

Rigorous: strict, severe

Substantial: major. Valuable, useful, dar asal

16
 Reengineering & Continuous
Improvement--Differences

Reengineering Continuous Improvement

Differences
Level of change Radical Incremental
Starting point Clean slate Existing process
Participation Top-down Bottom-up
Typical scope Broad, cross-functional Narrow, within functions
Risk High Moderate
Primary enabler Information technology Statistical control
Type of change Cultural and structural Cultural
Clean slate: Starting an activity or process again
Cultural: a way of life
Structural: Systematic

17
 What is a Process?
 A specific ordering of work activities across time
and space, with a beginning, an end, and clearly
identified inputs and outputs: a structure for
action.
 What is a Business Process?
 A group of logically related tasks that use the
firm's resources to provide customer-oriented
results in support of the organization's
objectives
 Why Reengineer?
 Customers
 Demanding
 Sophistication

 Changing Needs
Sophistication: quality of being complicated or made with great skill

 Competition
 Local
 Global
 Customer Demands

• expect us to know everything

• to make the right decisions
• to do it right now
• to do it with less resources
• to make no mistakes
• expect to be fully informed
 Why Reengineer?
 Competition
 Local
 Global

 Change
 Technology
 Customer Preferences
 Business Process Reengineering
WHY ?
Integrate people, technology, & organizational culture
To Respond to rapidly changing technical & business
environment and customer’s needs to achieve Big
performance gains
 Why Organizations Don’t
Reengineer?
 Complacency

 Political Resistance

 New Developments

 Fear of Unknown and Failure

 Performance
 BPR seeks improvements of

 Cost
 Quality

 Service

 Speed
BPR Symbols
Business Process Flowchart
Symbols
An Activity

A Document

A Decision

Data (input as outputs)

 Business Process Flowchart
Symbols
A Predefined Process

Start The Start of a Process

End The End of a Process

Representing a Relation
Business Process Flowchart
Symbols
Continuation of the process at the same page
at an equal symbol with the same number. Used
when a relation arrow crosses another relation arrow

Off-Page Connector - Process will continue on the

next page

Integration Relation - A relation to another module is

identified and described
Data Flowchart Symbols
An Activity

A Document

A Decision

Flat Data File (input as outputs)

Data Flowchart Symbols
Manual Data Item

A Database File

Representing a Relation

Continuation

Off-Page Connector
Rules For Data
Symbols
 Rules For Data Symbols
Start Symbol used to identify the start of a business process

Generate
Purchase Activities must be described as a verb
Order

OK? Yes Decisions have only two possibilities (Yes & No)

No

Crossing lines are not allowed

End If one side of the decision has no further processes

defined this symbol has to be used
 Rules For Data Symbols
I Continuation symbol within the same number must be
present twice on the same page

Purchase
Order Name the document

Off- Page Connector is used to continue a process at the

A next page or to let the process to flow over at the previous
to the next page. If more than one is needed use A, B, C,
D…

Posting
of Bonus Name the data
 Rules For Data Symbols
Predefined Processes always have a relation to level and
Sub-Process stream by a number in the line below a sub-process
Delivery description

BC 4.04 A predefined process must be described in a different

flowchart. To make the relation clear between the
predefined process and the belonging flowchart a unique
alpha numeric number should be assigned to this
predefined process.
 Version Management
 For different versions of a business process or
data flow some mandatory information must be
on the flowchart.
 Name of the business process
 Unique number of the business process

 Revision number

 Date of last change

 Author

 Page number with total pages

Implementing a BPR
Strategy
 The C’s related to
Organization Re-engineering Projects
The 3C’s of The 4C’s of effective
organization Re- teams:
engineering:
- Customers - Commitment
- Competition - Cooperation
- Change - Communication
- Contribution
 Key Steps

Select The Process & Appoint Process Team

Understand The Current Process

Develop & Communicate Vision Of Improved Process

Identify Action Plan

Execute Plan
 1. Select the Process & Appoint
Process Team
 Two Crucial Tasks

 Select The Process to be Reengineered

 Appoint the Process Team to Lead the

Reengineering Initiative
 Select the Process
 Review Business Strategy and Customer
Requirements

 Select Core Processes

 Understand Customer Needs

 Don’t Assume Anything

 Select the Process
 Select Correct Path for Change

 Remember Assumptions can Hide Failures

 Competition and Choice to Go Elsewhere

 Ask - Questionnaires, Meetings, Focus Groups

 Appoint the Process Team
 Appoint BPR Champion

 Identify Process Owners

 Establish Executive Improvement Team

 Provide Training to Executive Team

 Core Skills Required
 Capacity to view the organization as a whole

 Ability to focus on end-customers

 Ability to challenge fundamental assumptions

 Courage to deliver and venture into unknown

areas
 Core Skills Required
 Ability to assume individual and collective
responsibility
 Use of Consultants
 Used to generate internal capacity
 Appropriate when a implementation is needed
quickly
 Ensure that adequate consultation is sought
from staff so that the initiative is organization-
led and not consultant-driven
 Control should never be handed over to the
consultant
2. Understand the Current Process

 Develop a Process Overview

 Clearly define the process
 Mission

 Scope

 Boundaries

 Set business and customer measurements

 Understand customers expectations from
the process (staff including process team)
2. Understand the Current Process

 Clearly Identify Improvement

Opportunities
 Quality

 Rework

 Document the Process

 Cost

 Time

 Value Data
3. Understand the Current Process

 Carefully resolve any inconsistencies

 Existing -- New Process
 Ideal -- Realistic Process
 3. Develop & Communicate Vision
of Improved Process
 Communicate with all employees so that they
are aware of the vision of the future

 Always provide information on the progress of

the BPR initiative - good and bad.

 Demonstrate assurance that the BPR initiative is

both necessary and properly managed
 4. Identify Action Plan
 Remove no-value-added activities

 Standardize Process and Automate Where

Possible

 Up-grade Equipment

 Plan/schedule the changes

 4. Identify Action Plan
 Construct in-house metrics and targets

 Introduce and firmly establish a feedback system

 Audit, Audit, Audit

 5. Execute Plan
 Qualify/certify the process
 Perform periodic qualification reviews
 Define and eliminate process problems
 Evaluate the change impact on the business and
on customers
 Benchmark the process
 Provide advanced team training
 Information
Technology & BPR
 Benefits From IT
 Assists the Implementation of Business
Processes
 Enables Product & Service Innovations
 Improve Operational Efficiency

 Coordinate Vendors & Customers in the Process

Chain
BPR Challenges
 Common Problems with BPR
 Process Simplification is Common - True BPR
is Not
 Desire to Change Not Strong Enough
 Start Point the Existing Process Not a Blank
Slate
 Commitment to Existing Processes Too Strong
 REMEMBER - “If it isn’t broke …”
 Common Problems with BPR
 Process under review too big or too small
 Reliance on existing process too strong
 The Costs of the Change Seem Too Large
 BPR Isolated Activity not Aligned to the
Business Objectives
 Allocation of Resources
 Poor Timing and Planning
 Keeping the Team and Organization on Target
 How to Avoid BPR Failure
 To avoid failure of the BPR process it is recommended that:

 BPR must be accompanied by strategic planning, which

addresses leveraging Information technology as a competitive
tool.
 Place the customer at the centre of the reengineering effort,
concentrate on reengineering fragmented processes that lead to
delays or other negative impacts on customer service.
 BPR must be "owned" throughout the organization, not driven
by a group of outside consultants.
 Case teams must be comprised of both managers as well as those
who will actually do the work.
 How to Avoid BPR Failure
 The Information technology group should be an
integral part of the reengineering team from the start.
 BPR must be sponsored by top executives, who are not
about to leave or retire.
 BPR projects must have a timetable, ideally between
three to six months, so that the organization is not in a
state of "limbo".
 BPR must not ignore corporate culture and must
emphasize constant communication and feedback.
 Summary
 Reengineering is a fundamental rethinking and
redesign of business processes to achieve
dramatic improvements

 BPR has emerged from key management

traditions such as scientific management and
systems thinking

 Rules and symbols play an integral part of all

BPR initiatives
 Summary
 Don’t assume anything - remember BPR is
fundamental rethinking of business processes