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Business Process Reengineering Complete

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Business Process, Anna University Syllabus, MCA

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Business Process Reengineering Complete

  1. 1. Business Process<br />Unit – III<br />MCA I Year<br />Business Process Reengineering<br />1<br />Roy Antony Arnold G<br />Lecturer / CSE<br />Infant Jesus College of Engineering<br />Tuticorin, Tamilnadu, India<br />
  2. 2. 2<br />
  3. 3. What is a Business Process?<br />“A business process is a collection of activities which together produce something of value to a customer”<br /> – e.g. Customer Order Entry<br />3<br />
  4. 4. Definition<br />Reengineering is 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.<br />4<br />
  5. 5. 5<br />What to reengineer?<br />BPR changes processes, and <br />not <br />functions, departments, geographies or tasks.<br />
  6. 6. What it is not?<br />Reengineering is not reorganizing. <br />Modifying how an organization is structured and redesigning an organization’s business processes are two different things.<br />An organizational structure should be designed so that it best supports redesigned business processes.<br />Reengineering is not downsizing either.<br />Downsizing focuses on the reduction of workforce to achieve short-term cost savings. <br />Reengineering, on the other hand, focuses on rethinking from the ground up, finding more efficient ways of working including eliminating work that is unnecessary.<br />6<br />
  7. 7. New Era<br />Old Era<br />High Competition<br />High Demand<br />Innovation<br />Speed<br />Service &Quality<br />Efficiency<br />Control<br />Reasons for Reengineering<br />7<br />
  8. 8. Examples<br />8<br />
  9. 9. Examples<br />9<br />
  10. 10. Benefits of Reengineering<br />The rewards of reengineering are many including:<br />empowering employees;<br />eliminating waste, unnecessary management overhead, and obsolete or inefficient processes;<br />producing often significant reductions in cost and cycle times;<br />enabling revolutionary improvements in many business processes as measured by quality and customer service; and<br />helping top organizations stay on top and low-achievers to become effective competitors.<br />10<br />
  11. 11. Business Process Reengineering<br /><ul><li>Imperative for Survival
  12. 12. Methodology
  13. 13. Steps</li></ul>11<br />
  14. 14. Reengineering – survival study<br />Introduction:<br />The number of firms is increased to close – because of <br /> a) Inefficiency<br /> b) too Inward Looking <br /> c) inflexibility <br />12<br />
  15. 15. - continued<br />Similar changes occurred in developed and developing nations also and still facing a similar challenge.<br />Example:<br />Ford Motor Company faced business extinction at one time and found the paths to renewed success and inspires others.<br />Business Reengineering–<br /> Process thro’ which the continuous success and survival is indicated (by Americans).<br />Term is invented by Michael Hammer.<br />13<br />
  16. 16. Reengineering Imperative in USA<br />The business climate made reengineering necessary in the United States.<br />US gave great industrial philosophers like Adam Smith and Henry Ford. But at one time their business was also in trouble. <br />This situation arises because of three main reasons. They are,<br />a) The Assembly line model of production, where customer waited in line for delivery <br />b) Competition within the country is very low.<br />c) Global competition was largely non-existent.<br />To recover from this situation, FORD changed from their ProductionSupremacy to Supplier primacy, when the Model T Ford released in the market. <br />Henry Ford said “I will give the customer any color of car he wants – so long as it’s black.”<br />14<br />
  17. 17. -continued<br />Japanese organizations entered into America (after War)<br /> Japanese were too smart, they move small market into world markets with extraordinary quality and manufacturing philosophy. They cut out unnecessary waste such as,<br />Safety stock Inventories<br />Multiple suppliers<br />External Inspection<br />High Quality<br />Low cost in regular basis<br />15<br />
  18. 18. JAPANESE PARADIGM<br />US adopted the Japanese paradigm because of :<br />They recognized that economy of scale is not as important as economy of time. So, the entire approach was to be flexible and respond quickly to changing customer needs.<br />They opted for flexibility and multi- skilling techniques in work culture and this created the ability to respond. i.e. discard old and narrow focused to new innovations in work.<br />Customer’s response become the primary objective rather than the growth alone.<br />16<br />
  19. 19. Reengineering scenario in Europe<br />In Europe,<br /><ul><li>Quiet Transformations are taking place vitally.</li></ul>For example,(eg1):<br />-Lubricants division of a large oil company has cut its order delivery time to 40% ( from 6weeks to 19 days).<br />- Eliminated $200 millions in inventory and doubled its profits.<br />- It aims in overall reduction in operating expenses to 35%.<br />For example (eg2:) :<br /> In Rover car company,<br /> - aims to fulfill 90% of customer orders.<br /> - He used around nine key business processes.<br /> - New product introduction<br /> - Only European car-maker to reverse the falling output and sales trends during first five months of 1993.<br />17<br />
  20. 20. Imperative in India<br /> The first country realized the value of destruction and destroyer.<br />Quality competitions by<br />ISO 9000 and TQM<br />Computerization of processes<br />Many reasons for lacking:<br />Blaming technology by system professionals<br />Users blame technology and system professionals<br />Top management blames both users and system professionals.<br />Consultants blame all others. <br />18<br />
  21. 21. Global environment is pulling Indian organizations into <br /> - Customer orientation<br /> - quick response time<br /> - quality imperatives<br /> - cost minimization<br />Conclusion:<br /> - environmental pull<br /> - technology push<br /> - Economic liberalization<br />19<br />
  22. 22. Cant do redefine their mission and objectives<br /> clinically reassess the key business processes<br /> achieve improvements in process efficiency and effectiveness thro’ BPR.<br />Examples:<br /> - HP, Pepsi abroad, Federal Express<br />20<br />
  23. 23. Instances of RE in Indian Org<br /> In year 1997,<br />Major BPR in customer ordering , services functions<br />Manufacturing and marketing<br />Organizing market research once in six months to know customer feedback on their products and general view on market needs<br /><ul><li> Performance levels of 3 major process:</li></ul> - Customer orders<br /> - Customer service<br /> - Customer feedback<br /><ul><li> Three points of customers: </li></ul> - Sales executive<br /> - Installation technician<br /> - Market Researcher<br />21<br />
  24. 24. Instances in RE in India<br />Leasing and financing company<br />Manufacturing company<br />News paper publishers<br />22<br />

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