Business process reengineering

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Business process reengineering

  1. 1. BUSINESS PROCESS REENGINEERING By: Garip Önder Özen
  2. 2. DEFINITION <ul><li>Hammer and Champy (1993) define BPR as &quot;... 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.&quot; </li></ul>
  3. 3. DEFINITION <ul><li>Thomas Davenport (1993), another well-known BPR theorist, uses the term process innovation, which he says ”encompasses the envisioning of new work strategies, the actual process design activity, and the implementation of the change in all its complex technological, human, and organizational dimensions”. </li></ul>
  4. 4. DEFINITION <ul><li>Finally, Johansson et al. (1993) provide a description of BPR relative to other process-oriented views, such as Total Quality Management (TQM) and Just-in-time (JIT), and state: &quot;Business Process Reengineering, although a close relative, seeks radical rather than merely continuous improvement. It escalates the efforts of JIT and TQM to make process orientation a strategic tool and a core competence of the organization. BPR concentrates on core business processes, and uses the specific techniques within the JIT and TQM ”toolboxes” as enablers, while broadening the process vision.&quot; </li></ul>
  5. 5. DEFINITION <ul><li>BPR derives its existence from different disciplines, and four major areas can be identified as being subjected to change in BPR </li></ul><ul><ul><li>organization </li></ul></ul><ul><ul><li>technology </li></ul></ul><ul><ul><li>strategy </li></ul></ul><ul><ul><li>people </li></ul></ul>
  6. 6. WHY REENGINEERING? <ul><li>Customers </li></ul><ul><ul><li>Demanding </li></ul></ul><ul><ul><li>Sophistication </li></ul></ul><ul><ul><li>Changing Needs </li></ul></ul><ul><li>Competition </li></ul><ul><ul><li>Local </li></ul></ul><ul><ul><li>Global </li></ul></ul>
  7. 7. WHY REENGINEERING? <ul><li>Change </li></ul><ul><ul><li>Technology </li></ul></ul><ul><ul><li>Customer Preferences </li></ul></ul>
  8. 8. WHY REENGINEERING? <ul><li>Complacency </li></ul><ul><li>Resistance </li></ul><ul><li>New Developments </li></ul><ul><li>Fear of Failure </li></ul>
  9. 9. WHAT DOES IT SEEK? <ul><li>BPR seeks </li></ul><ul><ul><li>Cost </li></ul></ul><ul><ul><li>Quality </li></ul></ul><ul><ul><li>Service </li></ul></ul><ul><ul><li>Speed , improvements </li></ul></ul>
  10. 10. The role of information technology <ul><li>Information technology (IT) plays an important role in the reengineering concept </li></ul><ul><li>It is considered as a major enabler for new forms of working and collaborating within an organization and across organizational borders. </li></ul>
  11. 11. The role of information technology <ul><li>Shared databases, making information available at many places </li></ul><ul><li>Expert systems, allowing generalists to perform specialist tasks </li></ul><ul><li>Telecommunication networks, allowing organizations to be centralized and decentralized at the same time </li></ul><ul><li>Decision-support tools, allowing decision-making to be a part of everybody's job </li></ul><ul><li>Wirelss data communication and portable computers , allowing field personnel to work office independent </li></ul><ul><li>Interactive videodisk, to get in immediate contact with potential buyers </li></ul><ul><li>Automatic identification and tracking, allowing things to tell where they are, instead of requiring to be found </li></ul><ul><li>High performance computing, allowing on-the-fly planning and revisioning </li></ul>
  12. 12. Key Steps Select The Process & Appoint Process Team Understand The Current Process Develop & Communicate Vision Of Improved Process Identify Action Plan Execute Plan
  13. 13. Select the Process & Appoint Team <ul><li>Two Important Tasks </li></ul><ul><ul><li>Select t he p rocess to be r eengineered </li></ul></ul><ul><ul><li>Appoint a p rocess t eam </li></ul></ul>
  14. 14. Select the Process <ul><li>Review b usiness s trategy and c ustomer r equirements </li></ul><ul><li>Select c ore p rocesses </li></ul><ul><li>Understand c ustomer n eeds </li></ul><ul><li>No assumption </li></ul>
  15. 15. Select the Process <ul><li>Select c orrect p ath for c hange </li></ul><ul><li>Ask - q uestionnaires, m eetings, f ocus </li></ul>
  16. 16. Appoint the Process Team <ul><li>Identify p rocess o wners </li></ul><ul><li>Develop e xecutive i mprovement t eam </li></ul><ul><li>Provide t raining to e xecutive t eam </li></ul>
  17. 17. Core Skills Required <ul><li>Capacity to view the organization as a whole </li></ul><ul><li>Ability to focus on end-customers </li></ul><ul><li>Ability to challenge fundamental assumptions </li></ul><ul><li>Courage to deliver into unknown areas </li></ul>
  18. 18. Core Skills Required <ul><li>Ability to assume individual and collective responsibility </li></ul>
  19. 19. Understand the Current Process <ul><li>Develop a p rocess o verview </li></ul><ul><li>Clearly define the process </li></ul><ul><ul><li>Mission </li></ul></ul><ul><ul><li>Scope </li></ul></ul><ul><ul><li>Boundaries </li></ul></ul><ul><li>Set business and customer measurements </li></ul><ul><li>Understand customers expectations from the process </li></ul>
  20. 20. Understand the Current Process <ul><li>Identify Improvement Opportunities </li></ul><ul><ul><li>Quality </li></ul></ul><ul><ul><li>Rework </li></ul></ul><ul><li>Document the Process </li></ul><ul><ul><li>Cost </li></ul></ul><ul><ul><li>Time </li></ul></ul><ul><ul><li>Value Data </li></ul></ul>
  21. 21. Develop & Communicate Vision of Improved Process <ul><li>Communicate with all employees so that they are aware of the vision of the future </li></ul><ul><li>Always provide information on the progress of the BPR initiative - good and bad. </li></ul><ul><li>Demonstrate assurance that the BPR initiative is both necessary and properly managed </li></ul>
  22. 22. Develop & Communicate Vision of Improved Process <ul><li>Promote individual development by indicating options that are available </li></ul><ul><li>Indicate actions required and those responsible </li></ul>
  23. 23. Identify Action Plan <ul><li>Develop an i mprovement p lan </li></ul><ul><li>Appoint p rocess o wners </li></ul><ul><li>Simplify the p rocess to r educe p rocess t ime </li></ul>
  24. 24. Identify Action Plan <ul><li>Remove no-value-added activities </li></ul><ul><li>Standardize p rocess and a utomate w here p ossible </li></ul><ul><li>Up-grade e quipment </li></ul><ul><li>Plan/schedule the changes </li></ul>
  25. 25. Execute Plan <ul><li>Qualify/certify the process </li></ul><ul><li>Perform periodic qualification reviews </li></ul><ul><li>Define and eliminate process problems </li></ul><ul><li>Evaluate the change impact on the business and on customers </li></ul><ul><li>Benchmark the process </li></ul><ul><li>Provide advanced team training </li></ul>
  26. 26. Benefits From IT <ul><li>Assists the Implementation of Business Processes </li></ul><ul><ul><li>Enables Product & Service Innovations </li></ul></ul><ul><ul><li>Improve Operational Efficiency </li></ul></ul><ul><ul><li>Coordinate Vendors & Customers in the Process Chain </li></ul></ul>
  27. 27. Common Problems <ul><li>Process s implification is c ommon - t rue BPR is n ot </li></ul><ul><li>Desire to c hange n ot s trong </li></ul><ul><li>Commitment to e xisting p rocesses t oo s trong </li></ul>
  28. 28. Common Problems with BPR <ul><li>Process under review too big or too small </li></ul><ul><li>Reliance on existing process too strong </li></ul><ul><li>The Costs of the c hange s eem l arge </li></ul><ul><li>Allocation of r esources </li></ul><ul><li>Poor t iming and p lanning </li></ul><ul><li>Keeping the t eam and o rganization on t arget </li></ul>
  29. 29. <ul><li>THANK YOU... </li></ul>

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