Reenginering organisaton


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  • Cagla
  • cagla
  • January 16, 2002 1/16/2002
  • Tutorial, 197 Varun - Banu
  • Tutorial – Varun - - 201-205 - Ergin
  • In its various manifestations, information technology (IT) processes data, gathers information, stores collected materials, accumulates knowledge, and expedites communication. In prior years, IT had been viewed only as a supporting player within the overall strategy of the firm. But IT is now taking significant roles in business processes - creating new needs, causing new product development, and commanding new procedures. Following full implementation of IT in an organization, these internal changes may also lead to broader shifts in products, markets, and society as a whole. A framework of the roles of IT as an initiator, a facilitator, or an enabler is proposed. Initiator - an initiator acts as an agent of change. A causal relation may be involved and some establishments of needs will be aroused. That is, new requirements are imposed and need to be resolved by the usage of certain existing IT. We can treat it as a "Why" decision. For example, the need for using computer scanning may be caused by the decision of using computer imaging (Chan and Choi, 1997). Hammer and Champy (1993) also stated that "An important technology first creates a problem, and then solves it". This statement shows that new operations may be initiated by the use of the available IT. Thus, IT becomes an initiator as it lets people recognize a powerful solution before seeking the problem it may solve (Hammer and Champy, 1993). Furthermore, new operations may be caused by the decision of using certain current ITs. So, we can say that the availability of IT is an initiator of change. We also observe that Davenport argued for limiting IT's role (in BPR) to an enabler only (Davenport, 1993) and it is indeed true that a change effort should never be driven by technological goals (Manganelli, 1993). But, as discussed in Chan and Choi (1997), for example, imaging technology was used and initiated a total change in the process of ward ordering in a hospital. Thus, we observe that it is possible to have the initiator role for IT. Facilitator - IT may also be a facilitator. In other words, IT may serve as something to make work or a workload easier. Thus, we note that there is a need to design some new product to fulfill those new requirements or to create some new operations to accomplish those new functions. These products may not be new inventions. They may actually be forms of current technology, repackaged for the new need and current environment (Chan and Choi, 1997). This can be viewed as a "What" decision. For example, in order to facilitate the use of computer imaging, an imaging system would have to be developed to include the operations of image preparation, image capturing, image transmitting, and image receiving, and image database management. IT also acts as a facilitator because the design of a new operation may necessitate the creation of a new product. The availability of IT in this case serves as a facilitator. In other words, IT can be viewed as a part of the product itself by virtue of increasing the electronization of products and is frequently used to do things that could not be done before. Enabler - this role of IT has received the most attention. As discussed in Chan and Choi (1997), an enabler is something that offers the ability or the necessary assistance to accomplish something. In order to perform the necessary operations, procedures have to be followed and implemented. From another point of view, some new products will be innovated after a "What" decision. So, in order to utilize these innovations, we may develop some new procedures to maximize gains and to meet the intended objectives (Chan and Choi, 1997). Those procedures can be defined as the answers to the "How" question and are steps to be followed in order to achieve successful operations. When IT is to accomplish process innovation, IT serves as an enabler. IT is designed to accelerate specific process steps and was viewed "as an enabler for working smarter and more productively" (Kanter, 1996). We also have seen that IT acts as "an enabler which provides rapid processing and analytical capabilities, parallel access and information capture" (Alavi and Yoo, 1995). For example, networking enables both collection and dissemination of data. Information technology in business processes Stephen L. Chan .  Business Process Management Journal . Bradford: 2000 .Vol.6, Iss. 3;  pg. 224
  • Creating a fit between BPR and IT infrastructure: A proposed framework for effective implementation Majed Al-Mashari ,  Mohamed Zairi .  International Journal of Flexible Manufacturing Systems . Boston: Oct 2000 .Vol.12, Iss. 4;  pg. 253
  • Peter O’neil – Sayfa 577 – BANU Some of the reengineering literature advises starting with a blank sheet of paper and redesigning the process anew. The problems inherent in this approach are: I the danger of designing another inefficient system, I ignoring the embedded system knowledge accumulated over many years, and I not appreciating the scope of the problem (Petrozzo and Stepper, 1994; O’Neill and Sohal, 1998). && Telecom Case 70% of the BPR projects fail. Biggest obstacles that reengineering faces are: (i) Lack of sustained management commitment and leadership; (ii) Unrealistic scope and expectations; and (iii) Resistance to Change. Based on the BPR consultants' interviews, Bashein et al. (1994) outline the positive preconditions for BPR success as: Senior Management Commitment and Sponsorship; Realistic Expectations; Empowered and Collaborative Workers; Strategic Context of Growth and Expansion; Shared Vision; Sound Management Practices; Appropriate People Participating Full-Time (cf: CIGNA: BPR as a way of life); and Sufficient Budget. They also identify negative preconditions related to BPR as: The Wrong Sponsor; A "Do It to Me" Attitude; Cost-Cutting Focus; and, Narrow Technical Focus. The negative preconditions relating to the Organization include: Unsound Financial Condition; Too Many Projects Under Way; Fear and Lack of Optimism; and, Animosity Toward and By IS and HR Specialists. To turn around negative conditions, firms should: Do Something Smaller First (CIGNA's pilot); Conduct Personal Transformation (CIGNA's change of mindset); and Get IS and HR Involved (CIGNA's CIO initiated the change and HR factors were given due emphasis). King (1994) views the primary reason of BPR failure as overemphasis on the tactical aspects and the strategic dimensions being compromised. He notes that most failures of reengineering are attributable to the process being viewed and applied at a tactical, rather than strategic, levels. He discusses that there are important strategic dimensions to BPR, notably, Developing and Prioritizing Objectives; Defining the Process Structure and Assumptions; Identifying Trade-Offs Between Processes; Identifying New Product and Market Opportunities; Coordinating the Reengineering Effort; and, Developing a Human Resources Strategy. He concludes that the ultimate success of BPR depends on the people who do it and on how well they can be motivated to be creative and to apply their detailed knowledge to the redesign of business processes (cf: Davenport & Stoddard 1994, Markus et al. 1994).
  • Ergin
  • Ergin
  • Reenginering organisaton

    1. 1. Reengineringthe Organization
    2. 2. Agenda Purpose of Reengineering What is Reengineering Many faces of Reengineering Definition of Reengineering Features of reengineering Process of Reengineering Role of IT Outcome of the Reengineering Conclusion Rengineering the Organization 2
    3. 3. Purpose of the Reengineering Reengineering is tool to prepare the organization run effectively in the globally competitive environment To maintain competitiveness , and value addition in our services and product for customer . Rengineering the Organization 3
    4. 4. What is Reengineering Hammer and Champy state, “A business process” is a collection of activities that takes one or more kinds of input and creates an output that is of value to the customer Business Process Reengineering represents a radical rethinking of company procedures and organizational structure aimed at obtaining substantial improvements in terms of costs, quality, service, drawing on the analysis of the value of the activities of the company. Reengineering is significant changes tobasic business processes that yield 50-100% rates of improvement “a methodological process that uses information technology to radically overhoul business process and thereby attain major business goals” “the reconfiguration of the business using IT as a central lever” Rengineering the Organization 4
    5. 5. Many Faces of Reengineering Business process reengineering (BPR) Business process improvement Core process redes Process innovation Business process transformation Breakpoint business process redesign Organisational reengineering Business process management Business scope redefinition Organisational change ecology Structured analysis and improvement Rengineering the Organization 5
    6. 6. Definition 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 -Michael Hammer and James Champy Rengineering the Organization 6
    7. 7. Features of Reengineering  Fundamental rethinking refers What the organization is doing and Why ? Appropriate question may not be How can we do it better? but Do we really need to do this at all? Rengineering the Organization 7
    8. 8.  Radical Redisign refers not a modification but a reinvention Radical change means asking ‘’What if we could disregard our existing organization and procedures and start with blank piece of paper?’’ What would the organization look like? What business processes would we use to achieve the desired result ? Rengineering the Organization 8
    9. 9.  Competitive environment demands that the change will take place , because in many cases it does result fewer people being needed due to implement new technology Misconception arises of Downsizing or Rightsizing, people can be displaced and hurt in the process , it leads to effect the team spirit . Achieving major goals or dramatic performance improvements Business process as opposed to departments or functional areas IT as a critical enabler Is typically initiated from the top down Rengineering the Organization 9
    10. 10.  focus on processes questions the logic of existing designs New design of work should not be based on the classical hierarchical arrangement or division of work but on end to end processes and creation of new values for the customer eg. Total customer satisfaction , meeting competition is usually a one-shot attempt at achieving improvements Rengineering the Organization 10
    11. 11. Reengineering Process Preparation – What the customer actually want from organization Developing Strategy – Develop Strategic Processes, Analysis & Prioritization Design an Organizational System- Create a Core team of People Implementation – realization of technical and social plans Rengineering the Organization 11
    12. 12. Role of ITan initiator, a facilitator, or anenabler
    13. 13. Role of IT - Initiator Agent of change New requirements e.g. Internet Rengineering the Organization 13
    14. 14. Role of IT - Facilitator Make work/workload easier e.g. Flow of Information Rengineering the Organization 14
    15. 15. Role of IT - Enabler Most attention Offers the ability/necessary assistance to accomplish Rengineering the Organization 15
    16. 16. Role of IT – E-Commerce Personalized service Lower transaction & material costs e.g. E-tickets  Save cost of print/mailf  Reduced commission payable to travel agency Rengineering the Organization 16
    17. 17. Role of IT - Coordination Shared Databases  Information dissemination  Facilitate distribution Networking  Assistscollection/dissemination  Rapid implementation of decisions Telecommunication Rengineering the Organization 17
    18. 18. IT in IntegrationFunctional Area Information TechnologiesMarketing Multimedia, Internet, databaseDistribution Online Inventory and shipment controls, Internet, Database, Barcodig, satellite positioningAccounting Computerized Data collection, shared Database, Spread SheetsDesign & Engineering CADPurchasing Internet, Database, ERPProduction CAM, Database, Scheduling, barcoding, ERP, EDIMaintenance Expert Systems, Scheduling Rengineering the Organization 18
    19. 19. Benefits of IT Cost reduction Time elimination Error minimization Facilitating Integration Enhancing decision Making Rengineering the Organization 19
    20. 20. Positive Preconditions for BPR Senior Management Commitment The organization has to believe in the change; The whole organization must be involved in the change; Realistic Expectations Theoretical and practical training is required to create new professionalism Sound Management Practices People Participating Sufficient Budget Rengineering the Organization 20
    21. 21. Negative Preconditions for BPR Unsound Financial Condition Too Many Projects Under Way Fear and Lack of Optimism Rengineering the Organization 21
    22. 22. Outcome of the Reengineering Business domain Redefinition Redefinition role and responsibility Information system Implementation Processes innovation Elimination of obsolete processes Training for achievement motivation Rengineering the Organization 22
    23. 23. BPR Project Problems 70% of the BPR projects fail Biggest obstacles that reengineering faces are (i) Lack of sustained management commitment and leadership (ii) Unrealistic scope and expectations (iii) Resistance to Change. Other problems:  the danger of another inefficient system  discontinues in the leadership  lack of communication  selecting wrong IT vendors  lack of awareness of the lead times associated with IT Rengineering the Organization 23
    24. 24. Conclusion BPR must be seen as a strategic, cross-functional activity that needs to be integrated with other aspects of management The key requirement is that managers understand in detail the current business processes before starting on a BPR project. The application of IT can provide major improvements in the performance of business systems, and while considered a major part of the reengineering activity, must be integrated with the needs of customer in mind. Rengineering the Organization 24
    25. 25. THANKS & QUESTIONS Rengineering the Organization 25