4-1

Business Process Reengineeringand Information Technology

4-2

Basic Concepts

• Business process

• Value added

• Business Process Reengineering (BPR)

• Demand chain

• Supply chain

4-3

Basic Concepts

• Supply chain management

• Extended supply chain

• Networked organization

• Organizational transformation

4-4

The Need for BPR

• Customers

• Competition

• Change

• Techniques lag behind technology

• Problem of the stovepipe

• Fragmented piecemeal systems

• Integration

4-5

The Principles of BPR and The Role of IT

• Characteristics of BPR

• Methodologies and frameworks for BPR

• Enabling role of IT

4-6

Characteristics of Business Process Reengineering

• Several jobs are combined into one

• Employees make decisions

• Steps in business process: natural order

• Process may have multiple versions

• Work is performed where it makes the most sense

4-7

Characteristics of Business Process Reengineering

• Controls, checks, other nonvalue-added work is minimized

• Reconciliation is minimized - minimize external contact points

• Hybrid centralized / decentralized operation is used

• A single point of contact is provided for the customer

4-8

Business Process Reengineering and

Restructuring the Organization

• Redesign of processes

• From mass production to mass customization

• Cycle time reduction

• Restructuring organizations

4-9

The Networked Organization

• Structure of networked organizations

• Empowerment– IT / empowerment relationship

• Teams

4-10

Virtual Corporations

A virtual corporation is an organization composed of several business partners sharing costs and resources for the purpose of producing a product or service.

4-11

Virtual CorporationsMajor Attributes

• Excellence

• Utilization

• Opportunism

• Lack of borders

• Trust

• Adaptability to change

• Technology

4-12

Total Quality Managementand Reengineering

• Rate of change

• TQM: continuous improvement

• Reengineering: dramatic improvement

4-13

TQM versus Reengineering

4-14

Implementing Reengineering

• Redesign

• Retool

• Reorchestrate

4-15

Tools for BPR

• Simulation

• Flow diagrams

• Work analysis

• Application development

• Workflow software

4-16

Reorchestrate: Organizational Change

• Leadership

• Corporate values

• Cultural change

• Incentives

• Accountability

• Zeal

4-17

Reorchestrate: Organizational Change

• Communication

• Ambiguity

• Obstacles to change

• Celebrate success

4-18

Implementation Issues

• Continuous evaluation

• Eliminating jobs

4-19

Continuous Evaluation

• Is reengineering truly transformational?

• Will reengineering improve customer relations?

• Has reengineering cut across the organization?

• Is information technology playing a integral role in the reengineering solution?

• Does it hurt?

4-20

When to Use BPR?

• Failure rate as high as 75-85%

• Improperly aligned BPR and IT

• Expensive

• Organizational resistance

4-21

Managerial Issues

• Ethical issues

• BPR implementation

• Incremental improvement programs

• BPR tools

• Role of IT

• Failures

• TQM and BPR

4-22

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