business process-reengineering

Business Process Reengineering

CEM 515

For: Dr. Abdulaziz Bubshait By: Hassan Al-Bekhit

Presentation OutlinePresentation Outline

General IntroductionGeneral Introduction

Business Process ReengineeringBusiness Process Reengineering

BPR SymbolsBPR Symbols Understand and be able to implement a Understand and be able to implement a

BPR StrategyBPR Strategy Understand the main challenges in Understand the main challenges in

implementing a BPR Strategyimplementing a BPR Strategy Conclusion: SummaryConclusion: Summary

Spectrum of ChangeSpectrum of Change

AutomationAutomation Rationalization Rationalization

of proceduresof procedures

ReengineeringReengineering

Paradigm shiftParadigm shift

AutomationAutomation

refers to refers to computerizing computerizing processes to speed processes to speed up the existing up the existing tasks.tasks.

improves efficiency improves efficiency and effectiveness.and effectiveness.

Rationalization of Rationalization of ProceduresProcedures

refers to refers to streamlining of streamlining of standard operating standard operating procedures, procedures, eliminating obvious eliminating obvious bottlenecks, so that bottlenecks, so that automation makes automation makes operating procedures operating procedures more efficient.more efficient.

improves efficiency improves efficiency and effectiveness.and effectiveness.

Business Process Business Process ReengineeringReengineering

refers to radical refers to radical redesign of business redesign of business processes.processes.

Aims atAims at eliminating repetitive, eliminating repetitive,

paper-intensive, paper-intensive, bureaucratic tasksbureaucratic tasks

reducing costs reducing costs significantlysignificantly

improving improving product/service product/service quality.quality.

Paradigm ShiftParadigm Shift

refers to a more refers to a more radical form of radical form of change where the change where the nature of business nature of business and the nature of and the nature of the organization is the organization is questioned.questioned.

improves strategic improves strategic standing of the standing of the organization.organization.

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Business Process Business Process ReengineeringReengineering

““Reengineering is the Reengineering is the fundamentalfundamental rethinking and rethinking and radicalradical redesign of business redesign of business processesprocesses to achieve to achieve dramatic dramatic improvements in critical, improvements in critical, contemporary measures of contemporary measures of performance such as cost, performance such as cost, quality, service, and speed.” quality, service, and speed.”

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Key WordsKey Words FundamentalFundamental

WhyWhy do we do what we do? do we do what we do? Ignore Ignore what iswhat is and concentrate and concentrate

on on what should be.what should be. RadicalRadical

Business Business reinventionreinvention vs. vs. business improvement business improvement

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Key WordsKey Words DramaticDramatic

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

Business Process Business Process a collection of activities that takes one or a collection of activities that takes one or

more kinds of inputs and creates an more kinds of inputs and creates an output that is of value to a customer.output that is of value to a customer.

BPR & The BPR & The OrganizationOrganization

BPR is Not?BPR is Not? BPR may sometimes be mistaken for the following five BPR may sometimes be mistaken for the following five

tools:tools:

1.1. AutomationAutomation is an automatic, as opposed to is an automatic, as opposed to human, operation or control of a process, equipment human, operation or control of a process, equipment or a system; or the techniques and equipment used to or a system; or the techniques and equipment used to achieve this. Automation is most often applied to achieve this. Automation is most often applied to computer (or at least electronic) control of a computer (or at least electronic) control of a manufacturing process. manufacturing process.

2. 2. DownsizingDownsizing is the reduction of expenditures in is the reduction of expenditures in order to become financial stable. Those expenditures order to become financial stable. Those expenditures could include but are not limited to: the total number could include but are not limited to: the total number of employees at a company, retirements, or spin-off of employees at a company, retirements, or spin-off companies.companies.

BPR is Not?BPR is Not?

3. 3. OutsourcingOutsourcing involves paying another involves paying another company to provide the services a company company to provide the services a company might otherwise have employed its own staff to might otherwise have employed its own staff to perform. Outsourcing is readily seen in the perform. Outsourcing is readily seen in the software development sector.software development sector.

4. 4. Continuous improvementContinuous improvement emphasizes emphasizes small and measurable refinements to an small and measurable refinements to an organization's current processes and systems. organization's current processes and systems. Continuous improvements’ origins were Continuous improvements’ origins were derived from total quality management (TQM) derived from total quality management (TQM) and Six Sigma. and Six Sigma.

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Reengineering & Reengineering & Continuous Continuous

Improvement--Improvement--SimilaritiesSimilarities

Reengineering Continuous ImprovementSimilaritiesBasis of analysis Process ProcessPerformance measurement Rigorous RigorousOrganizational change Significant SignificantBehavioral change Significant SignificantTime investment Substantial Substantial

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Reengineering & Reengineering & Continuous Continuous

Improvement--Improvement--DifferencesDifferences

Reengineering Continuous ImprovementDifferencesLevel of change Radical IncrementalStarting point Clean slate Existing processParticipation Top-down Bottom-upTypical scope Broad, cross-functional Narrow, within functionsRisk High ModeratePrimary enabler Information technology Statistical controlType of change Cultural and structural Cultural

What is a Process?What is a Process?

A specific ordering of work activities A specific ordering of work activities across time and space, with a across time and space, with a beginning, an end, and clearly beginning, an end, and clearly identified inputs and outputs: a identified inputs and outputs: a structure for action.structure for action.

What is a Business What is a Business Process?Process?

A group of logically related tasks A group of logically related tasks that use the firm's resources to that use the firm's resources to provide customer-oriented results in provide customer-oriented results in support of the organization's support of the organization's objectivesobjectives

Why Reengineer?Why Reengineer?

CustomersCustomers DemandingDemanding SophisticationSophistication Changing NeedsChanging Needs

CompetitionCompetition LocalLocal GlobalGlobal

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?Why Reengineer?

CompetitionCompetition LocalLocal GlobalGlobal

ChangeChange TechnologyTechnology Customer PreferencesCustomer 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 Why Organizations Don’t Reengineer?Reengineer?

ComplacencyComplacency

Political ResistancePolitical Resistance

New DevelopmentsNew Developments

Fear of Unknown and FailureFear of Unknown and Failure

PerformancePerformance

BPR seeks improvements ofBPR seeks improvements of

CostCost QualityQuality ServiceService SpeedSpeed

BPR SymbolsBPR Symbols

Business Process Business Process Flowchart SymbolsFlowchart Symbols

An Activity

A Document

A Decision

Data (input as outputs)


A Predefined Process

The Start of a Process

The End of a Process

Representing a Relation

Start

End


Continuation of the process at the same page at an equal symbol with the same number. Usedwhen 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 SymbolsData Flowchart Symbols

An Activity

A Document

A Decision

Flat Data File (input as outputs)

Data Flowchart SymbolsData Flowchart Symbols

Manual Data Item

A Database File

Representing a Relation

Continuation

Off-Page Connector

Rules For Data Rules For Data SymbolsSymbols

Rules For Data SymbolsRules For Data SymbolsStart

End

Generate Purchase

Order

OK? Yes

No

Symbol used to identify the start of a business process

Activities must be described as a verb

Decisions have only two possibilities (Yes & No)

Crossing lines are not allowed

If one side of the decision has no further processes defined this symbol has to be used

Rules For Data SymbolsRules For Data Symbols

PurchaseOrder

Posting of Bonus

I

A

Continuation symbol within the same number must be present twice on the same page

Name the document

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

Name the data

Rules For Data SymbolsRules For Data Symbols

Sub-ProcessDelivery

BC 4.04

Predefined Processes always have a relation to level and stream by a number in the line below a sub-process description

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 ManagementVersion Management

For different versions of a business For different versions of a business process or data flow some mandatory process or data flow some mandatory information must be on the flowchart. information must be on the flowchart. Name of the business processName of the business process Unique number of the business processUnique number of the business process Revision numberRevision number Date of last changeDate of last change AuthorAuthor Page number with total pagesPage number with total pages

Implementing a Implementing a BPR StrategyBPR Strategy

The C’s related toThe C’s related toOrganization Re-engineering Organization Re-engineering

ProjectsProjectsThe 3C’s of organization Re-engineering:

The 4C’s of effective teams:

- Customers

- Competition

- Change

- Commitment

- Cooperation- Communication

- Contribution

Key StepsKey Steps

Select The Process & Appoint Process Team

Understand The Current Process

Develop & Communicate Vision Of Improved Process

Identify Action Plan

Execute Plan

1.1. Select the Process & Select the Process & Appoint Process TeamAppoint Process Team

Two Crucial TasksTwo Crucial Tasks

Select The Process to be ReengineeredSelect The Process to be Reengineered

Appoint the Process Team to Lead the Appoint the Process Team to Lead the Reengineering InitiativeReengineering Initiative

Select the ProcessSelect the Process

Review Business Strategy and Review Business Strategy and Customer RequirementsCustomer Requirements

Select Core ProcessesSelect Core Processes

Understand Customer NeedsUnderstand Customer Needs

Don’t Assume AnythingDon’t Assume Anything

Select the ProcessSelect the Process

Select Correct Path for ChangeSelect Correct Path for Change

Remember Assumptions can Hide Remember Assumptions can Hide FailuresFailures

Competition and Choice to Go ElsewhereCompetition and Choice to Go Elsewhere

Ask - Questionnaires, Meetings, Focus Ask - Questionnaires, Meetings, Focus GroupsGroups

Appoint the Process Appoint the Process TeamTeam

Appoint BPR ChampionAppoint BPR Champion

Identify Process OwnersIdentify Process Owners

Establish Executive Improvement Establish Executive Improvement TeamTeam

Provide Training to Executive TeamProvide Training to Executive Team

Core Skills RequiredCore Skills Required

Capacity to view the organization as a wholeCapacity to view the organization as a whole

Ability to focus on end-customersAbility to focus on end-customers

Ability to challenge fundamental Ability to challenge fundamental assumptionsassumptions

Courage to deliver and venture into Courage to deliver and venture into unknown areasunknown areas

Core Skills RequiredCore Skills Required

Ability to assume individual and Ability to assume individual and collective responsibilitycollective responsibility

Use of ConsultantsUse of Consultants

Used to generate internal capacityUsed to generate internal capacity Appropriate when a implementation is Appropriate when a implementation is

needed quicklyneeded quickly Ensure that adequate consultation is Ensure that adequate consultation is

sought from staff so that the initiative sought from staff so that the initiative is organization-led and is organization-led and notnot consultant-drivenconsultant-driven

Control should Control should nevernever be handed over be handed over to the consultantto the consultant

2.2. Understand the Current Understand the Current ProcessProcess

Develop a Process OverviewDevelop a Process Overview Clearly define the process Clearly define the process

MissionMission ScopeScope BoundariesBoundaries

Set business and customer Set business and customer measurements measurements

Understand customers expectations from Understand customers expectations from the process (staff including process team) the process (staff including process team)


Clearly Identify Improvement Clearly Identify Improvement OpportunitiesOpportunities QualityQuality ReworkRework

Document the ProcessDocument the Process CostCost Time Time Value DataValue Data


Carefully resolve any Carefully resolve any inconsistenciesinconsistencies Existing -- New ProcessExisting -- New Process Ideal -- Realistic ProcessIdeal -- Realistic Process

3.3. Develop & Communicate Develop & Communicate Vision of Improved ProcessVision of Improved Process

Communicate with all employees so that Communicate with all employees so that they are aware of the vision of the futurethey are aware of the vision of the future

Always provide information on the Always provide information on the progress of the BPR initiative - good and progress of the BPR initiative - good and bad.bad.

Demonstrate assurance that the BPR Demonstrate assurance that the BPR initiative is both necessary and properly initiative is both necessary and properly managedmanaged

3.3. Develop & Communicate Develop & Communicate Vision of Improved ProcessVision of Improved Process

Promote individual development by Promote individual development by indicating options that are availableindicating options that are available

Indicate actions required and those Indicate actions required and those responsibleresponsible

Tackle any actions that need resolutionTackle any actions that need resolution

Direct communication to reinforce new Direct communication to reinforce new patterns of desired behaviorpatterns of desired behavior

4.4. Identify Action PlanIdentify Action Plan

Develop an Improvement PlanDevelop an Improvement Plan

Appoint Process OwnersAppoint Process Owners

Simplify the Process to Reduce Process Simplify the Process to Reduce Process TimeTime

Remove any Bureaucracy that may Remove any Bureaucracy that may hinder implementationhinder implementation


Remove no-value-added activitiesRemove no-value-added activities

Standardize Process and Automate Standardize Process and Automate Where PossibleWhere Possible

Up-grade EquipmentUp-grade Equipment

Plan/schedule the changesPlan/schedule the changes


Construct in-house metrics and Construct in-house metrics and targetstargets

Introduce and firmly establish a Introduce and firmly establish a feedback systemfeedback system

Audit, Audit, AuditAudit, Audit, Audit

5.5. Execute PlanExecute Plan

Qualify/certify the processQualify/certify the process Perform periodic qualification reviewsPerform periodic qualification reviews Define and eliminate process problemsDefine and eliminate process problems Evaluate the change impact on the Evaluate the change impact on the

business and on customersbusiness and on customers Benchmark the processBenchmark the process Provide advanced team trainingProvide advanced team training

Information Information Technology & Technology &

BPRBPR

Benefits From ITBenefits From IT

Assists the Implementation of Assists the Implementation of Business ProcessesBusiness Processes Enables Product & Service InnovationsEnables Product & Service Innovations Improve Operational EfficiencyImprove Operational Efficiency Coordinate Vendors & Customers in the Coordinate Vendors & Customers in the

Process ChainProcess Chain

BPR ChallengesBPR Challenges

Common Problems with Common Problems with BPRBPR

Process Simplification is Common - Process Simplification is Common - True BPR is NotTrue BPR is Not

Desire to Change Not Strong EnoughDesire to Change Not Strong Enough Start Point the Existing Process Not a Start Point the Existing Process Not a

Blank SlateBlank Slate Commitment to Existing Processes Commitment to Existing Processes

Too StrongToo Strong REMEMBER - “If it isn’t broke …”REMEMBER - “If it isn’t broke …”

Common Problems with Common Problems with BPRBPR

Process under review too big or too smallProcess under review too big or too small Reliance on existing process too strongReliance on existing process too strong The Costs of the Change Seem Too LargeThe Costs of the Change Seem Too Large BPR Isolated Activity not Aligned to the BPR Isolated Activity not Aligned to the

Business ObjectivesBusiness Objectives Allocation of ResourcesAllocation of Resources Poor Timing and PlanningPoor Timing and Planning Keeping the Team and Organization on Keeping the Team and Organization on

TargetTarget

How to Avoid BPR How to Avoid BPR FailureFailure

To avoid failure of the BPR process it is recommended To avoid failure of the BPR process it is recommended that: that:

BPR must be accompanied by strategic planning, which BPR must be accompanied by strategic planning, which addresses leveraging Information technology as a addresses leveraging Information technology as a competitive tool. competitive tool.

Place the customer at the centre of the reengineering Place the customer at the centre of the reengineering effort, concentrate on reengineering fragmented effort, concentrate on reengineering fragmented processes that lead to delays or other negative impacts processes that lead to delays or other negative impacts on customer service. on customer service.

BPR must be "owned" throughout the organization, not BPR must be "owned" throughout the organization, not driven by a group of outside consultants. driven by a group of outside consultants.

Case teams must be comprised of both managers as Case teams must be comprised of both managers as well as those who will actually do the work. well as those who will actually do the work.

How to Avoid BPR How to Avoid BPR FailureFailure

The Information technology group should be The Information technology group should be an integral part of the reengineering team an integral part of the reengineering team from the start. from the start.

BPR must be sponsored by top executives, who BPR must be sponsored by top executives, who are not about to leave or retire. are not about to leave or retire.

BPR projects must have a timetable, ideally BPR projects must have a timetable, ideally between three to six months, so that the between three to six months, so that the organization is not in a state of "limbo". organization is not in a state of "limbo".

BPR must not ignore corporate culture and BPR must not ignore corporate culture and must emphasize constant communication and must emphasize constant communication and feedback. feedback.

SummarySummary Reengineering is a fundamental Reengineering is a fundamental

rethinking and redesign of business rethinking and redesign of business processes to achieve dramatic processes to achieve dramatic improvementsimprovements

BPR has emerged from key management BPR has emerged from key management traditions such as scientific management traditions such as scientific management and systems thinkingand systems thinking

Rules and symbols play an integral part of Rules and symbols play an integral part of all BPR initiativesall BPR initiatives

SummarySummary

Don’t assume anything - remember Don’t assume anything - remember BPR is fundamental rethinking of BPR is fundamental rethinking of business processesbusiness processes