Business Process Reengineering (A Prerequisite For Process Model Design)

Business Process Reengineering
(a prerequisite for process model

design)
Prepared By:
Milind Gadhavi
Ankur Dhangar
Chandrajit Khaniya
Kartik Patel
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”
What is reengineering?
“The fundamental rethinking and radical redesign of
business processes to achieve dramatic improvements in
critical, contemporary measures of performance such as
cost, quality, service and speed”
Definition
BPR derives its existence from different disciplines,
and four major areas can be identified as being
subjected to change in BPR
organization
technology
strategy
people
Business Process Re-engineering
o Business Process
 Simply a set of activities that transform set of inputs into a set of
outputs (goods or services) for another person or process using
people and tools
Output
Supplier Process Customer
Input Feedback
o Reengineering
 Assume the current process is irrelevant - it doesn’t work, its broke,
forget it.
Project Learn from Create Plan
Implement
Scope Others Process Transition
Concepts of Re-engineering
1) Fundamental Rethinking: It calls for questioning
everything i.e., being followed ,practiced and found
acceptable for years.
Ex: one can question the necessity of an invoice for
billing and recovery of money.
2) Redical Redesign: It calls for trimming & chopping of
business designs so that cost is reduced, service is
improved and customer gets higher value at higher
speed. It calls for change in technology, tools and
techniques.
Why Reengineering
Customers
o Demanding
o Sophistication
o Changing Needs
Competition
o Global
o Local
Change
o Technology
o Customer preferences
What does BPR seek
BPR seeks
 Cost
 Quality
 Service
 Speed, improvements
The role of information technology
Information technology (IT) plays an important role in the
reengineering concept
It is considered as a major enabler for new forms of working

and collaborating within an organization and across
organizational borders.
Shared databases, making information available at many

places
Expert systems, allowing generalists to perform specialist

tasks
The role of information technology
Telecommunication networks, allowing organizations to be
centralized and decentralized at the same time
Decision-support tools, allowing decision-making to be a part

of everybody's job
Wirelss data communication and portable computers,

allowing field personnel to work office independent
Interactive video disk, to get in immediate contact with

potential buyers
Automatic identification and tracking, allowing things to tell

where they are, instead of requiring to be found
High performance computing, allowing on-the-fly planning

and revisioning
Business Performance Measure
Year 2000
Traditional
Plus
●
Cost ●
Value
●
Quality ●
Satisfaction
●
Productivity ●
Performance
●
Market Share ●
Niche share
●
Task productivity ●
Process productivity
●
Efficiency ●
Effectiveness
●
Delivery promise ●
Service fulfillment
●
Function overheads ●
Process overheads
●
Human resource ●
Knowledge resource
Business Process
You concentrate on the ‘process’ not on the ‘task’ when it
comes to re-engineering.
Business process is “set of activities performed across the

organisation creating output of value to the customer.”
For example: The ordering processing scope in the

traditional sense is within the marketing department. But
when it comes to re-engineering, the scope expands to
manufacturing , storing , delivering and recovering of
money.
Contd..
The process is executed through basic steps like:
 Receiving the input
 Measuring the input
 Analyzing the document
 Performing
 Processing
 Recording
 Accessing data
 Producing the results
 Communicating them
Basic elements of business process:
I. Motivation to perform
II. Data gathering, processing & storing
III. Information processing
IV. Checking, validating & control
V. Decision making
VI. Communication and relating to human initiatives

Process model of organisation
The re-engineering initiative begins with viewing the
organisation through the processes and not by the task or
functions.
Process runs across the department of the functions where
the department or the functions head hold same or similar
position at par in the organisation structure.
A process may begin in one department runs across other
departments producing a business result of some value.
The process is handled by a number of people having
different status in the organisation.
They are backed by authority, rules, and power within the
scope of function of the department they are handling.
The classical organisation model is recaston the basis of
process ignoring the people hierarchy. The stimulus to
activate the process could be external or internal and it
flows across the department where the data is gathered,
analysed, processed, the decision are taken and
intermediate result are passed on to the next stage for
further processing.
The process model of the organisation for BPR consider

only those processes where the ‘end’ of each process
produces a result whereby the customer concern, interest,
expectation and perception are affected. It consider only
those processes which produces value for the customer.
For constructing the process model, the processes which are
essential for the smooth working of the business such as the
employee related processes, audit, budgeting and
accounting, security, canteen, general information, etc., are
not considered. Such processes contribute to substantial
overheads and could be considered for cost control in
second phase.
The need for constructing a process model of the

organisation is to force some fundamental thinking, and
redesigning that will bring a dramatic change in the
working and the end result of the organisation. It will not
permit thinking on the task basis within the confines of the
function or department.
Every action in the process will be evaluated from the stand point
of an ultimate result. It will help to redesign the process in terms
of input, process and effectiveness and productivity. The process
view of the organisation will prevent functional and local sub
optimisation, and promote process optimisation, where the
resources are used intelligently and the productivity is the highest.
Once the process view of the organisation is taken, the old

conventions and practices of business processing undergo a
radical change. The change breaks the hierarchy, and removes the
barriers on the access and use of information. It deviates from the
command control system to a system of work group called as
team.
Process Value
CEO
Stream Stream
A B C
A1 A1 B1 B1 C1 C1
A2 A2 B2 B2 C2 C2
Process View of Organization

Steps of BPR
Select The Process & Appoint Process Team
Understand The Current Process
Develop & Communicate Vision Of Improved Process
Identify Action Plan
Execute Plan
Select the Process & Appoint Team
Two Important Tasks
o Select the process to be rengineered
o Appoint a process team

Select the Process
Review business strategy and customer requirements
Select core processes
Understand customer needs
No assumption
Select correct path for change
Ask - questionnaires, meetings, focus

Appoint the Process Team
Identify process owners
Develop 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 into unknown areas
Ability to assume individual and collective responsibility

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

Understand the Current
Process
Identify Improvement Opportunities
Quality
Rework
Document the Process

Cost
Time
Value Data
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
Promote individual development by indicating options that are available
Indicate actions required and those responsible

Identify Action Plan
Develop an improvement plan
Appoint process owners
Simplify the process to reduce process time
Remove no-value-added activities
Standardize process and automate where possible
Up-grade eequipment
Plan/schedule the changes

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
Benefits of BPR
o Enterprise Integration
 Departments are consolidated
 Several jobs are combined into one job
o Worker Empowerment
 There is both horizontal and vertical reorganization
 Handoffs are eliminated
 There is fewer rules and less coordination is required
o Number of steps in a process are reduced
 This is simplification
 Inspections, checks, and controls are reduced or
eliminated
o The steps are performed in a more natural manner
o Like process improvement, steps are reassessed
 Can it be eliminated
 Can it be taken off line
 Can it be performed in parallel
 Can it be combined
 Is it a bottleneck
 Can its mean be reduced
 Can its variance be reduced
 What is its cost
o Processes differs by the type of job being

processed
 Not just one process but many are employed depending on the
size of the job
o Work is performed where it makes the most sense
 Wal-mart moves the replenishment function to its suppliers

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Business Process Reengineering

(a prerequisite for process model

What is a Business Process?

It is considered as a major enabler for new forms of working

Shared databases, making information available at many

Expert systems, allowing generalists to perform specialist

Decision-support tools, allowing decision-making to be a part

Wirelss data communication and portable computers,

Interactive video disk, to get in immediate contact with

Automatic identification and tracking, allowing things to tell

High performance computing, allowing on-the-fly planning

Business process is “set of activities performed across the

For example: The ordering processing scope in the

II. Data gathering, processing & storing

III. Information processing

IV. Checking, validating & control

VI. Communication and relating to human initiatives

The process model of the organisation for BPR consider

The need for constructing a process model of the

Once the process view of the organisation is taken, the old

Process View of Organization

Understand The Current Process

Develop & Communicate Vision Of Improved Process

Identify Action Plan

o Select the process to be rengineered

o Appoint a process team

Select core processes

Understand customer needs

Select correct path for change

Ask - questionnaires, meetings, focus

Develop executive improvement team

Provide training to executive team

Ability to focus on end-customers

Ability to challenge fundamental assumptions

Courage to deliver into unknown areas

Ability to assume individual and collective responsibility

Clearly define the process

Set business and customer measurements

Understand customers expectations from the process

Document the Process

Always provide information on the progress of the BPR initiative - good

Demonstrate assurance that the BPR initiative is both necessary and

Promote individual development by indicating options that are available

Indicate actions required and those responsible

Appoint process owners

Simplify the process to reduce process time

Remove no-value-added activities

Standardize process and automate where possible

Plan/schedule the changes

o Processes differs by the type of job being

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