chapter 9 management innovation for modern businesses: business process reengineering (bpr)
TRANSCRIPT
Chapter 9 Management Innovation for Modern Businesses:
Business Process Reengineering (BPR)
Objectives
After studying the chapter, students should be able to..•Explain definition of Business Process Re-engineering(BPR)•Describe Framework of BPR •Identify characteristics of BPR•Identify potential benefits of BPR for businesses•Identify things to prepare for BPR implementation •Explain why BPR one of management innovation.
Content
Introduction
BPR
BPR Methodology
BPR Successful and Failure Factors
BPR Implementation
BPR Evaluation Framework
BPR : Significant Management Innovation
BPR: Successful Case
Summary
Content
Introduction
BPR
BPR Methodology
BPR Successful and Failure Factors
BPR Implementation
BPR Evaluation Framework
BPR : Significant Management Innovation
BPR: Successful Case
Summary
Introduction
When is BPR in need:•Customer•Competition•Change
Introduction
Success stories:“Wal-Mart reduces restocking time from six weeks to thirty-six hours.”
” Hewlett Packard’s assembly time for server computers touches new low- four minutes.”
“Taco Bell’s sales soars from $500 million to $3 billion.”
Content
Introduction
BPR
BPR Methodology
BPR Successful and Failure Factors
BPR Implementation
BPR Evaluation Framework
BPR : Significant Management Innovation
BPR: Successful Case
Summary
BPR
Definition: BP + R•Business Process
A set of logically related tasks or activities performed to achieve a defined business outcome (Bozarth & Handfield: 92)
•Re-engineering 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.
BPR
Definitions of BPR:“the fundamental rethinking and radical redesign of the business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service and speed". (Hammer and Champy,1993)
BPR Framework
BPR framework (Grant and Mergen) source: Park Win Ying (2012)
BPR
BPR
Purpose of BPR:make all business processes best-in-class.
BPRCharacteristics of BPR:•Several jobs are combined into one.•Employee empowerment.•Steps in the processes are performed in natural order, and several jobs get done simultaneously.•Processes have multiple versions. •Work is performed where it makes the most sense.•Controls and checks and other non-value-added work are minimized.
BPR:
Roles of Information Technology:•a major enabler for new forms of working and collaborating within an organization and across organizational borders
BPR
Benefits of BPR:•Increase Effectiveness.•Reduces cost.•Meaningful job for employees.•Improvement in organizational approach.•Growth of business
BPR in Action: Claim Resolution Process
After BPRBefore BPR
BPR
Content
Introduction
BPR
BPR Methodology
BPR Successful and Failure Factors
BPR Implementation
BPR Evaluation Framework
BPR : Significant Management Innovation
BPR: Successful Case
Summary
BPR Methodology
BPR Methodology a structured set of guidelines that enable an analyst to derive ways for problem solving called IDEF0 model. (Hammer, 2000)
1. Prepare for Re-engineering2. Map and Analyze As-Is Process3. Design To-Be process4. Implement Reengineered Process5. Improve Process Continuously
BPR Methodology
IDEF0 Model: BRP Methodology (Hammer, 2000)
Content
Introduction
BPR
BPR Methodology
BPR Successful and Failure Factors
BPR Implementation
BPR Evaluation Framework
BPR : Significant Management Innovation
BPR: Successful Case
Summary
BPR Successful & Failure FactorsSuccessful Factors•Organization wide commitment.•BPR team composition.•Business needs analysis.•Adequate IT infrastructure.•Effective change management.•Ongoing continuous improvement
BPR Successful and Failure FactorsFailure Factors•One department may be optimized at the expense of another•Lack of time to focus on improving business process•Lack of recognition of the extent of the problem•Lack of training•Inadequate infrastructure•Overly bureaucratic processes•Lack of motivation
Content
Introduction
BPR
BPR Methodology
BPR Successful and Failure Factors
BPR Implementation
BPR Evaluation Framework
BPR : Significant Management Innovation
BPR: Successful Case
Summary
BPR Implementation
•Where the technique has being applied•Types of firms / organizations that BPR can be applied
BPR Implementation1. Where the technique has being
applied• public and private sector organizations• SMEs• multinational cooperations
1.1 Purposes:• downsizing in organizational structures• improve service process• organizational upgrade with innovated IT
tools i.e. SAP, BAAN, ERP
BPR Implementation2. Types of firms / organizations
that BPR can be applied• Minimum Number of employees: 20• Strong management commitment to new
ways of working and innovation.• Well formed IT infrastructure
2.1 Applied to Company’s Problem 2. High operational costs3. Low quality offered to customers4. High level of ''bottleneck" processes at
pick seasons5. Poor performance of middle level
managers6. Inappropriate distribution of resources
and jobs
2.2 Duration and implementation cost of BPR•The duration of each BPR project varies from 6 -to 10 months.
BPR Implementation
2.3 Conditions for implementation (infrastructures required)
• An operating transactional and accounting computerized system inclosing the commercial part of the transactions.
• A network that connects all key personnel.
• Workstations with Windows • An exchange server (MS outlook, or MS
back office)
2.4 Organizations Supporting the Implementation of BPR
BPR Implementation
Content
Introduction
BPR
BPR Methodology
BPR Successful and Failure Factors
BPR Implementation
BPR Evaluation Framework
BPR : Significant Management Innovation
BPR: Successful Case
Summary
BPR Evaluation framework
To signify the difficult trade-offs that sometimes have to be made they refer to their model as the devil’s quadrangle. (H.A. Reijers, S. Liman Mansar / Omega 33 (2005))
Content
Introduction
BPR
BPR Methodology
BPR Successful and Failure Factors
BPR Implementation
BPR Evaluation Framework
BPR : Significant Management Innovation
BPR: Successful Case
Summary
• Criteria of Management Innovation Radical, new at the time Marked departure from previous
management practices Conferred a competitive advantage on
the pioneering company Lasting, being found in some form in
organizations today
BPR: Significant Management Innovation
Content
Introduction
BPR
BPR Methodology
BPR Successful and Failure Factors
BPR Implementation
BPR Evaluation Framework
BPR : Significant Management Innovation
BPR: Successful Case
Summary
After BPR implementation, Ford Motors (India) can induce significance increase of effectiveness and efficiency of business process.
BPR: Successful Case
BPR: Successful Case
BPR : Successful Case
Content
Introduction
BPR
BPR Methodology
BPR Successful and Failure Factors
BPR Implementation
BPR Evaluation Framework
BPR : Significant Management Innovation
BPR: Successful Case
Summary
Summary