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Business Process Reengineering


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Before getting into business process reengineering, it is important that you first understand the basics of business process development. Once you understand the difference between a “good” and a “bad” business process, you will be able to recognize business process in your organization that may need to be rethought!

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Business Process Reengineering

  1. 1. What is Business Process Reengineering?
  2. 2. • A business process is: • a set of work activities that are carried out by employees to achieve business objectives • integral to maintaining sustainable growth because it allows a company to operate consistently from one location to another as it expands What is a business process?
  3. 3. Example: Coffee shop with franchise locations • When a franchise location is established, the franchise owner must adhere to strict guidelines in relation to: • Appearance, Branding, Recipes, etc. • These guidelines are business processes which allow for customers to have a consistent experience from one location to another What is a business process?
  4. 4. A “good” business process must have three elements: 1. Purposeful Goals 2. Quantifiable and Controllable Elements 3. Consistent Outcomes What defines a “good” business process?
  5. 5. • Business processes must take into account the needs of the company, the employees, and the customer • Example: Coffee Shop • a business process that the company may create would be the process by which employees make coffee • a specific measure of coffee grounds must be used in order to produce the coffee 1. Purposeful Goals
  6. 6. • The goals of this process include: • Corporate goal: minimize the amount of waste produced during the brewing process thus increasing the profit margin of a cup of coffee • Employee goal: teachable process that allows employees to make the coffee correctly • Customer goal: ensure a consistent customer experience in terms of the coffee’s taste 1. Purposeful Goals
  7. 7. • While establishing a business process, companies should make the process as specific as possible • Example: Coffee Shop • Good: Add x tablespoons of coffee grounds to the coffee machine and brew for x minutes to make x amount of coffee. • Bad: Add coffee grounds to the coffee machine and brew the coffee. 2. Quantifiable and Controllable
  8. 8. • The “bad” process does not specify the: • exact amount of coffee grounds • length of brewing time • amount of resulting coffee • When these amounts are specified, the process is both quantifiable and controllable making it a “good” business process 2. Quantifiable and Controllable
  9. 9. • While developing a business process, a company must test it to ensure that the outcome is consistent each time the process is completed • Example: Coffee Shop • the outcome of the coffee making process is freshly brewed coffee • the coffee should look and taste the same each time it is brewed in order for it to meet this criterion 3. Consistent Outcomes
  10. 10. • Business process reengineering: • the redesign of core business processes to improve employee productivity and product/service quality • The goal is to make a business more efficient for all stakeholders involved • Stakeholders: the company, the customers, and the employees What is business process reengineering?
  11. 11. • A couple of examples of changes that the internal stakeholders must be willing to make are: • Shifting the emphasis from managing activities to delivering results • Getting rid of overly complex processes in favor of simpler ones • Streamlining the organizational hierarchy • Developing new processes that will help the company work towards the future rather than simply carrying on with what has always been done What is business process reengineering?
  12. 12. • Companies should engage in business process reengineering in order to increase their efficiency and consistency • When a company has efficient business processes, it reduces its expenses because less resources (materials or time) are wasted during the production process Why engage in business process reengineering?
  13. 13. • Consistent business processes allow companies to create a more reliable product/service which will likely lead to increase customer loyalty • Loyal customers make repeat purchases which increases revenue • With revenue up and expenses down, the company’s profitability increases Why engage in business process reengineering?
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