What is Reengineering? Some common descriptions about what it is andwhat it is not. throwing aside old systems and starting over not tinkering with what already exists not a patchwork fix means asking “if I were re-creating thisorganization today, given what I know and given thecurrent technology, what would it look like?” going back to the beginning and inventing a betterway of doing work
Definition of ReengineeringThe FUNDAMENTAL rethinking andRADICAL redesign of businessPROCESSES to achieve DRAMATICimprovements in critical, contemporarymeasures of performance, such as cost,quality, service and speed.
Radical means root radical redesign: disregard all existingstructures and procedures and come up(invent) new ways of accomplishing work reengineering is not business improvement not business enhancement not business modification
Dramatic ―blowing up the old and replacing it with somethingnew‖ not marginal or incremental improvements achieving large and significant improvement is theobjective in reengineering redecoration verses demolition and reconstruction
Processes a process is a group of activities or tasks thatuses one or more kinds of input and creates anoutput that is of value to the customer. Eg. registration process passport issuing process book check-out process at the library
What BPR is not ? automation (more efficient way of doing the wrongthings!!!) Restructuring Downsizing Reorganizing de-layering or flattening an organization total quality management or quality improvement(although both TQM and BPR share common themes)
BPR is not TQM Total Quality Management Business Process Reengineering TQM BPRDegree of Change Incremental RadicalStarting point Existing process Clean SlateFrequency of change Continuous One TimeTime required Short Medium to LongInception/Participation Top Down/Bottom Up Top DownRisks Moderate HighType of Change Cultural Cultural & Structural
The case of IBM Credit Corp. finances hardware, sofware, and services that IBMsells; profitable businessprocessing requests for financing 5-step procedure; all done by different individualsor groups. the end of the process—a quote letter sent to theIBM field salespersontook 6 days (average); sometimes as long as 2weeksmany times business was lost due to longturnaround time
Applying BPR installed a control desk to answer salespersons’s questions added more time to the process brainstorming session by two managers actual work took only ninety minutes; the remainder of seven days was due to travel from one department to the other replaced specialists with generalists; one person – dealstructurer – processed the entire application old system was based on certain assumptions about the nature of the work – every bid request is unique developed a new computerized system to support the dealstructurers the system was fine for most situations deal structurers could get help from a pool of real specialists, if needed
Results of reengineering turnaround time: 7 days --à 4 hours a slight decrease in number of people increase in number of deals handled: 10000 % 90 % decrease in turnaround time a very high increase in productivity dramatic, radical, process – true BPR!!!
Fundamental why do we do what we do? why do we do it the way we do? helps get rid of tacit rules and assumptions whichmay be obsolete or erroneous. ignore what is and concentrate on what should be. start with no assumptions; no givens.