ReengineeringReengineering

Created byCreated by

Michael MannMichael Mann

Operations Management 345Operations Management 345

TopicsTopics

What is Reengineering What is Reengineering Can you use it in your organizationCan you use it in your organization What is involvedWhat is involved How it worksHow it works ExamplesExamples ExerciseExercise ConclusionConclusion

Reengineering DefinedReengineering Defined

Reengineering is also known Reengineering is also known as Business Redesign. as Business Redesign. Business Process Redesign is Business Process Redesign is "the analysis and design of "the analysis and design of workflows and processes workflows and processes within and between within and between organizations" (Davenport & organizations" (Davenport & Short 1990). Short 1990).

Business Process Business Process Reengineering Reengineering

Has been around for a long time.Has been around for a long time. Written on extensively in trade Written on extensively in trade

journals and research articles.journals and research articles. Is it a fad?Is it a fad? Technology is vital to the Technology is vital to the

Reengineering process.Reengineering process.

The success of Business The success of Business Process Reengineering Process Reengineering

Around 70% of all BPR projects fail.Around 70% of all BPR projects fail.• Lack of management commitment Lack of management commitment

and leadershipand leadership• Unclear definition of the BPR project Unclear definition of the BPR project • Unrealistic scope and expectationsUnrealistic scope and expectations• Resistance to changeResistance to change• Lack of resourcesLack of resources

Can you use this in your Can you use this in your organization organization

Ask these questions about the Ask these questions about the project.project.• Is the process needed?Is the process needed?• Can and should it be redesigned?Can and should it be redesigned?• What purpose does it serve?What purpose does it serve?• Who is responsible for it?Who is responsible for it?• What competencies are needed for What competencies are needed for

someone to successfully complete it?someone to successfully complete it?

Organizations seeking to Organizations seeking to reengineer reengineer

Make the customer the starting point for Make the customer the starting point for change -- by identifying customer wants change -- by identifying customer wants and creating the infrastructure to and creating the infrastructure to support these expectationssupport these expectations

Design work processes in light of Design work processes in light of organizational goalsorganizational goals

Restructure to support front-line Restructure to support front-line performance. performance.

Reengineering Reengineering Recommendations Recommendations

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

Place the customer at the center of the reengineering Place the customer at the center 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.

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

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

Surviving ReengineeringSurviving Reengineering

BPR calls for radical changeBPR calls for radical change Change brings out negative reactions in many peopleChange brings out negative reactions in many people How to cope:How to cope: Spend time with co-workers who have the most Spend time with co-workers who have the most

positive attitudes. positive attitudes. Do one thing differently each week. Break the old Do one thing differently each week. Break the old

habits. habits. Talk to outsiders who have gone through Talk to outsiders who have gone through

reengineering. reengineering. Read trade and business publications to put Read trade and business publications to put

reengineering in perspectivereengineering in perspective

Goals of BPRGoals of BPR

Increase service level Increase service level Reduce total process cycle time Reduce total process cycle time Increase throughput Increase throughput Reduce waiting time Reduce waiting time Reduce activity cost Reduce activity cost Reduce inventory costs Reduce inventory costs

Tools for developing a BPRTools for developing a BPR

Flow diagramming-based Flow diagramming-based simulation toolssimulation tools

System dynamics-based System dynamics-based simulation toolssimulation tools

Discrete event-based Discrete event-based simulation toolssimulation tools

Implementing BPRImplementing BPR

AnalysisAnalysis• Is the redesign feasible?Is the redesign feasible?• Which issues will pose the most Which issues will pose the most

complexity? We will need to allocate complexity? We will need to allocate resources to these issues?resources to these issues?

Implementing BPRImplementing BPR

Software Functionality Software Functionality • Tools are assistants for participants in Tools are assistants for participants in

the implementation plan. the implementation plan. • Tools are needed to guide the Tools are needed to guide the

implementation through the different implementation through the different phases.phases.

• Tools must provide the overall Tools must provide the overall roadmap.roadmap.

Implementing BPRImplementing BPR

Management plansManagement plans• Standards for consistent descriptions of Standards for consistent descriptions of

processes, process strategy and plans.processes, process strategy and plans.• The framework of entities necessary for The framework of entities necessary for

effective process management.effective process management.• Linkages showing how each Linkages showing how each

employee's job contributes to the employee's job contributes to the building and delivery of value to the building and delivery of value to the enterprise's customers.enterprise's customers.

Implementing BPRImplementing BPR

Human resources Human resources • Identify essential agents within the Identify essential agents within the

organization.organization.• The behavioral aspects of the agentsThe behavioral aspects of the agents

– Motivation Motivation – CultureCulture– Incentives Incentives – Adaptability Adaptability

Summary of Implementing Summary of Implementing BPRBPR

Define Define Model Model AnalysisAnalysis SoftwareSoftware Management Management Human resources Human resources

Real World ExampleReal World Example

Xerox Xerox • Redesign of the organizational Redesign of the organizational

structurestructure• To facilitate the reorganization of the To facilitate the reorganization of the

Corporate Information Management Corporate Information Management FunctionFunction

• Response to expiration of patents and Response to expiration of patents and competition from Fuji and Canon.competition from Fuji and Canon.

Real World Example Real World Example Continued Continued

Main goal of Xerox was to increase Main goal of Xerox was to increase market share and their return on market share and their return on assetsassets

Focused on four major areasFocused on four major areas• Corporate strategies and programsCorporate strategies and programs• Corporate technology strategies Corporate technology strategies • Corporate telecommunications strategies Corporate telecommunications strategies • Executive and office information systems Executive and office information systems

Real World Example Real World Example Continued Continued

A new CIO was selected A new CIO was selected • Objectives to hire and train the right Objectives to hire and train the right

people for the new CIMpeople for the new CIM• Defined roles and responsibilities for Defined roles and responsibilities for

the new CIM groupthe new CIM group

Xerox Continued Xerox Continued

Three level architecture was Three level architecture was developed developed • Data processing Data processing • Distributed processing Distributed processing • Workstations and OISWorkstations and OIS

Xerox Case Summary Xerox Case Summary

Primary focus to redesign the Primary focus to redesign the organizational structureorganizational structure

People and technology were both People and technology were both needed to be successfulneeded to be successful

Ask these questions for a Ask these questions for a reengineering exercisereengineering exercise

What changes in the present What changes in the present system are needed?system are needed?

How quickly should the changes be How quickly should the changes be made, draft a time line.made, draft a time line.

In what order will the changes be In what order will the changes be scheduled?scheduled?

What approvals, buy-ins and What approvals, buy-ins and partner involvements are needed?partner involvements are needed?

Exercise continued Exercise continued

What is the strategy for gaining What is the strategy for gaining these approvals?these approvals?

Who will be responsible for what, Who will be responsible for what, when, where and how?when, where and how?

Identify each personIdentify each person Draw a table for each Draw a table for each

implementation step.implementation step.

Exercise Continued Exercise Continued

Identify strategies for possible Identify strategies for possible major obstacles that might emerge.major obstacles that might emerge.

Plan for monitoring and working out Plan for monitoring and working out problems.problems.

What staff changes will be needed?What staff changes will be needed? Establish schedules and objectives Establish schedules and objectives

for communication and training.for communication and training.

Exercise continued Exercise continued

Look at all new working Look at all new working arrangements and new shifts.arrangements and new shifts.

Are any equipment or facility Are any equipment or facility changes needed?changes needed?

Summary Summary

The first question to ask is “What The first question to ask is “What needs to be done”needs to be done”

Over time BPR involves changes inOver time BPR involves changes in• People People • Processes Processes • TechnologyTechnology

SummarySummary

Set objectivesSet objectives• Do you want to increase service levelDo you want to increase service level• Reduce total process timeReduce total process time• Increase your throughputIncrease your throughput• Reduce waiting timeReduce waiting time• Reduce your activity costReduce your activity cost• Reduce your inventory timeReduce your inventory time

SummarySummary

BPR is used forBPR is used for• Combining duplicate activitiesCombining duplicate activities• Eliminate multiple reviews & approvalsEliminate multiple reviews & approvals• Reduce batch sizesReduce batch sizes• Put processes in parallel Put processes in parallel • Implement demand pullImplement demand pull• Outsource inefficient activities Outsource inefficient activities • Eliminate movement of workEliminate movement of work• Organize multifunctional teamsOrganize multifunctional teams

ConclusionConclusion

Remember over 70% of BPR Remember over 70% of BPR projects failprojects fail• Proper understanding of BPR is Proper understanding of BPR is

needed before taken on a project.needed before taken on a project.• BPR is used for radical redesign and BPR is used for radical redesign and

improved work processesimproved work processes