IN SEARCH OF A NEW DIRECTION

IN SEARCH OF A NEW DIRECTION

Integrated by:

Chandan Bhatwadekar S2632604Mohamed Abdul Muhsin S2634110Paola Gonzalez S2675202Seungwon Seo S2633711

Change and Business Process Reengineering

AgendaAgenda AgendaAgenda

An overview of Change Management In depth literature review of Business

Process Reengineering (BPR)Case-studyRecommendation Conclusion

Defining Change Management

Defining Change Management

What is change management?What is change management?What is change management?What is change management?

Can be defined as the continuous process of aligning an organization with its marketplace and doing it more

responsively and effectively than competitors.(Berger, Sikora & Berger,1994)

Occurs at the individual, organizational, and industry level.

(Beer and Walton, 1994)

Levels of change within an Levels of change within an organizationorganization

Levels of change within an Levels of change within an organizationorganization

Organization alters its culture its corresponding strategic vision and both

pertaining to its members' overall perceptions, and collective mindset

Organization shifts its structure and its portfolio of strategic positions, including businesses, products and services, and

markets. labeled as restructuring, rearranging or reconfiguring

Mintzberg & Westley, 1992

What motivates change in an What motivates change in an organisation?organisation?

What motivates change in an What motivates change in an organisation?organisation?

Internal

ExternalOrganisation

It is also political, social, technological, and economic

stimuli outside of the organization that cause

changes

Organization's management policies,

systems, and procedures, as well as employee

attitudes

Langseth & Mossp,1985

Three steps to succeed…Three steps to succeed…Three steps to succeed…Three steps to succeed…

UnfreezingUnfreezingUnfreezingUnfreezing

ChangingChangingChangingChanging

RefreezingRefreezingRefreezingRefreezing1111

2222

3333

Burke, 2002

UnfreezingUnfreezingUnfreezingUnfreezing

1111 Stage which creates motivation and

readiness to change through demonstrating a need for change, inducing guilty and creating psychological safety to what happening in the future.

ChangingChangingChangingChanging

2222 Changing is the stage which involves cognitive

restructuring in which organizational members need to see things differently than before. As result of this different view, must act differently.

Two processes are needed to accomplish this stage.

Members need to identify with a new model, leader or even a consultant to begin to seeing things from other person’s point of view

Scan the environment for acquiring new information relevant change happing in an organization

Refreezing Refreezing Refreezing Refreezing

3333This is the last stage

Involves the integration of the change for organizational members through new behavior, feedback and reward, and interpersonal proliferation.

Roberson and PorrasRoberson and PorrasRoberson and PorrasRoberson and PorrasTwo views to characterize organizational change:

PLANNEDPLANNED UNPLANNEDUNPLANNED

FIRST ORDERFIRST ORDER Developmental change Evolutionary change

SECOND SECOND ORDERORDER

Transformational changeRevolutionary

change

Category

Ord

er

Business Process Reengineering

(BPR)

Business Process Reengineering

(BPR)

Success stories of BPRSuccess stories of BPRSuccess stories of BPRSuccess stories of BPR Taco Bell: the company has achieved a significant growth of 22 percent in a

stagnant market as well as conquering a remarkable customer satisfaction by rethinking on “who is the real customer?” and planning and implementing business processes which bring value to customer.

R.J. Reynolds Tobacco Co.:- To re engineering their business process of payment this company introduce EDI, electronic receipts settlement and imaging technology which eliminated paper based payment system as a result there was a reduction of 37 percent in processing per invoice which reduce the overall budget by $600,000.

Reuters: - world famous media organisation achieved accuracy of 95 percent of installation on time and 98 percent in billing those installations by reengineering the customer order life cycle.

Zenega Ag Products: - this company reengineered their business group in 19 teams and adopt a new rewards system to achieve consistency, equity and opportunity for their employees.

What is BPR?What is BPR?What is BPR?What is BPR?

The fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in performance

measures such as cost, quality, service and speed.

(Hammer and Champy, 1993)

BPR is a management tool which helps organisation to examine and redesigned their businesses process to enhance cost efficiency

and service effectiveness.

(Lindsay et al., 2003; Vidovic and Vuhic, 2003)

When organisation use BPR ?When organisation use BPR ?When organisation use BPR ?When organisation use BPR ?

When organisation identify they are in deep trouble

They were not in trouble yet but could see major problem ahead

They were in peak condition and wanted further improvement.

Tennant,C. & Wu,Y.(2005)

Process mappingProcess mapping

Identifying Identifying Process for reengineeringProcess for reengineering

Understanding the Understanding the selected processselected process

Defining key Defining key performance objectivesperformance objectives

Designing new processDesigning new process

TestingTesting

IMPLEMENTATIONIMPLEMENTATION

Application of BPRApplication of BPRApplication of BPRApplication of BPRTo ensure a success in BPR project it’s advisable to follow to seven steps approach formed by Shields J.

1111

2222

3333

4444

5555

6666

7777

Process mapping Process mapping Process mapping Process mapping

Can be defined as a series of actions that lead to an outcome.

A BPR project, should start with Process map of organisation which shows how work flows.1111

Identifying Identifying Process for Process for reengineeringreengineering

Identifying Identifying Process for Process for reengineeringreengineering It is impossible to reengineer all the organisation’s process

simultaneously.

Hammer and Champy: “organisation should take into consideration three major criteria while selecting process for BPR”. :

2222Feasibility Importance

Dysfunction

Selecting process criteria

Process which are in deep trouble

Processes which have greater impact on customer

Processes which are most susceptible to successful redesign

Understanding Understanding the selected the selected processprocess

Understanding Understanding the selected the selected processprocess

3333 Before undertaking a reengineering of

selected process, the BPR team needs to understand the process in and out.

E.g. what it does, how well it does and what are the critical issues that affect the process performance etc.

Defining key Defining key performance performance objectivesobjectives

Defining key Defining key performance performance objectivesobjectives

4444Key performance objectives are those objectives which are expected by stake holder and BPR team while initialising the BPR project . This objective indicates the success or failure of BPR project.

Designing new processDesigning new process Designing new processDesigning new process

This is considered as most important and crucial part of any BPR project. According to hammer and Champy (1993), it demands imagination, inductive thinking, and touch of craziness as it’s the most nakedly creative part of entire BPR project. 5555

TestingTesting TestingTesting PDSA model for process improvementIs important to test before putting into final

practice

6666 plan

Do

Act

Study Langley et al.(1996)

ImplementationImplementation ImplementationImplementation

Once the process is tested and the practical problems are identified in testing the new process can be rolled out. 7777

BPR Success factorsBPR Success factorsBPR Success factorsBPR Success factorsBPR

Success factors

Egalitarian Leadership

Collaborative working

environment

Top managementcommitment

Change in Management

systems

Use of information Technology

Shared vision/ information

Open communication

Confidence and trust

in subordinates

Constructive use of subordinates

idea

Friendly interactions

Confidence andtrust

Teamwork performance

Cooperativeenvironment

Recognition among

employees

Sufficient Knowledge

about BPR projects

Realistic expectation

of BPR results

Frequent communication

with BRP team users

New reward system

Performancemeasurement

Employeeempowerment

Timely trainingand education

The role of IT

Use of up-to-date communication

technology

Adoption of IT

BRP Failure factorsBRP Failure factorsBRP Failure factorsBRP Failure factorsBPR Failure Factors

Resistance to change

Middle management Fear of losing authority

Employees fear of losing job

Skepticism about project result

Feeling uncomfortable with new working environment

Croydon CouncilCroydon Council

Case study

“In search of a new direction”

The business…The business…The business…The business…

• A government body with a work force of 10,500 engaged in providing service of education, waste management, leisure and planning to local resident and business.

• Hierarchical structure is comprised of eight department.

• Each department had its own HR Department.

• Total staffing cost (salaries) was 282 million pound a year.

The Challenges…The Challenges…The Challenges…The Challenges…

A hierarchical and traditionalist culture was holding back the changing process.

The organization was needing a radical shake up due to a lack of a HR strategy.

challenge…(Contd.)challenge…(Contd.) challenge…(Contd.)challenge…(Contd.) Division among its 8 council departments No consistent approach to delivering HR services Low productivity High staff turnover (a massive 22%) No measurement of return on investment Low credibility of HR department Lack of investment in learning and development Lack of efficient approach towards Human capital

Management

The solution…The solution…The solution…The solution…

Consolidate the 8 personnel divisions into one strategic HR function.

Strong and effective performance measurement Development of new processes for HR tasksExploring alternative delivery models including

shared services with other councilsReducing the number of full time employees from

125 to 92

The solution…The solution…The solution…The solution…

Employing new staff from private and voluntary sectors

Creating 5 new teams: HR Policy, HR Consultancy, Business unit, organisational development.

Implementation of a new HR information system to provide better workforce reporting

New performance agreements outlining mutual responsibilities and expected service levels

TheThe resultsresultsTheThe resultsresults Croydon increased its recognition and rated “most

improved council (2007) in the National Human Capital Best Value Indicators (rising from 68 to 6th place)

Sickness level of staff fallen as achieved lowest sickness rate of all 32 London council.

Shared services arrangements for recruitment and payroll services yielded saving of more than 1.5 million pounds.

TheThe results…results…TheThe results…results…

Enhancement in capacity of organisational development

New development and induction programs Establishment of its own leadership academy Investment in internal communications

department The cultural change started

Before… (The Croydon Way)Before… (The Croydon Way)Before… (The Croydon Way)Before… (The Croydon Way)

Personnel Department

8

Personnel Department

7

Personnel Department

6Personnel

Department5

Personnel Department

4

Personnel Department

3

Personnel Department

2

Personnel Department

1

CROYDON COUNCIL

After… (the BPR way)After… (the BPR way)After… (the BPR way)After… (the BPR way)

Croydon

OrganisationDevelopment

Director (Strategic

HR Department)

Health and Safety

HR PolicyHR

ConsultancyA Business

Unit

Organisation Development

Our recommendations…Our recommendations…

OurOur recommendations…recommendations…OurOur recommendations…recommendations… Top management support

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

Before implementing BPR management should create fair amount of awareness amongst employee in order to achieve positive response and acceptance .

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

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.

Recommendation Contd..Recommendation Contd..

There should be uniformity and standardisation of goal and objective to achieve in BPR project.

BPR must be accompanied by strong communication process

During BPR process employee should be provided a required skill set training.

Include key personnel and function as early as possible

Start with small.

Our conclusion…Our conclusion…

Our conclusion…Our conclusion…Our conclusion…Our conclusion…

Change is inevitable in today’s competitive world. Organisation has to be ready for continuous change for success. However, the most important factor which makes organisation successful in the race is how fast and consistently they can adopt change.

Any questions?Any questions?

ReferencesReferences ReferencesReferences Adesola, S. and Baines, T. (2005), “Developing and evaluating a

methodology for businessprocess improvement”, Business Process Management Journal, Vol. 11 No. 1, pp. 37-46.

Alavi, M. and Yoo, Y. (1995), “Productivity gains on BPR: achieving success where others have failed”, Information Systems Management, Vol. 12 No. 4. pp. 43-7.

Al-Mashari, M. and Zairi, M. (2000), “Revising BPR: a holistic review of practice and development”, Business Process Management Journal, Vol. 6 No. 1, pp. 10-42.

Attaran, M. (2003), “Information technology and business-process redesign”, Business Process Management Journal, Vol. 9 No. 4, pp. 440-58.

Aversano, L., Canfora, G., Lucia, A.D. and Gallucci, P. (2002), “Business process reengineering and workflow automation: a technology transfer experience”, The Journal of Systems andSoftware, Vol. 63, pp. 29-44.

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Crowe, T.J., Fong, P.M. and Zayas-Castro, J.L. (2002), “Quantative risk level estimation of business process reengineering efforts”, Business Process Management Journal, Vol. 8 No. 5, pp. 490-511.

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Guimaraes, T. (1999), “Field testing of the proposed predictors of BPR success in manufacturing firms”, Journal of Manufacturing Systems, Vol. 18 No. 1, pp. 53-65.

Lindsay, A., Downs, D. and Lunn, K. (2003), “Business processes – attempts to find a definition”, Information and Software Technology, Vol. 45, pp. 1015-9.

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Thank you!!!Thank you!!!