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Business Process Re-engineering 01 – History & Introduction
BPR - Evolution <ul><li>Organisations aim to increase productivity & quality service and to reduce cost  </li></ul><ul><li...
<ul><li>Business concepts of 1990 </li></ul><ul><li>Rework of TQM, continuous improvement </li></ul><ul><li>Survey results...
Business Process Davenport & Short’s definition ” a set of logically related tasks performed to achieve a defined business...
Business Process <ul><li>Generic Definition </li></ul><ul><li>“  a set of activities that transform a set of inputs into a...
Business Process <ul><li>What are Business processes? </li></ul><ul><li>sequences and combinations of business activities....
<ul><li>What are Knowledge-based processes? </li></ul><ul><li>Product development, research activities, advertisement, and...
Operational Processes <ul><li>What are Operational processes ? </li></ul><ul><li>Customer service, procurement, and manufa...
Business Process Components <ul><li>They have people / customers (internal or external) </li></ul><ul><li>They have inform...
<ul><li>Generic Customer </li></ul><ul><ul><li>Marketing & Sales </li></ul></ul><ul><ul><li>Product/Service Development </...
Business Process Examples <ul><li>Industry-specific Customer </li></ul><ul><ul><li>Loan processing  (Banking) </li></ul></...
Business Process Examples <ul><li>Generic Administration  </li></ul><ul><ul><li>Budgeting </li></ul></ul><ul><ul><li>Train...
<ul><li>Objectives </li></ul><ul><li>Process Streamlining </li></ul><ul><li>Flexibility & Responsiveness </li></ul><ul><li...
Forces reshaping businesses <ul><ul><ul><li>Previous Now </li></ul></ul></ul><ul><li>Competition : Local/regional National...
<ul><li>All things to all people? </li></ul><ul><li>Documenting procedures and processes to ISO standards? </li></ul><ul><...
Business Process Re-engineering <ul><li>Business Process Re-engineering is :  </li></ul><ul><li>“  the  fundamental rethin...
<ul><li>Business Process Re-design is :  </li></ul><ul><li>“  the analysis and design of workflows and processes within an...
Fundamental Rethinking <ul><li>Why do we do what we do? </li></ul><ul><li>Why do we do it the way we do?  </li></ul><ul><l...
<ul><li>It means getting to the root of things </li></ul><ul><li>It means starting all over again and isn’t about fixing t...
<ul><li>BPR is an integrated program of change which has a major impact on an organization for several reasons: </li></ul>...
BPR – Challenging current practices BPR: Challenge current practices + = + = Analyse process. Fix if broken Automate proce...
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Bpr 01 Introduction

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Business process reengineering

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Bpr 01 Introduction

  1. 1. Business Process Re-engineering 01 – History & Introduction
  2. 2. BPR - Evolution <ul><li>Organisations aim to increase productivity & quality service and to reduce cost </li></ul><ul><li>Traditional organisation structure, customer services and business methods are out-dated </li></ul><ul><li>Low barriers to entry, hence stiffer competition - locally & globally </li></ul><ul><li>Current business are: </li></ul><ul><ul><li>customer-focused and market driven </li></ul></ul><ul><ul><li>process-focused and team-oriented </li></ul></ul><ul><ul><li>Focused on speed & response time </li></ul></ul><ul><ul><li>focused on customer relationships </li></ul></ul>
  3. 3. <ul><li>Business concepts of 1990 </li></ul><ul><li>Rework of TQM, continuous improvement </li></ul><ul><li>Survey results shows that BPR was unsuccessful </li></ul><ul><li>BPR leaders - James Champy; Thomas Davenport </li></ul><ul><li>Deming and Juran discussed about BPR in TQM reports </li></ul><ul><li>BPR was introduced in 70’s to the manufacturing environment </li></ul>BPR - Origins
  4. 4. Business Process Davenport & Short’s definition ” a set of logically related tasks performed to achieve a defined business outcome . A structured, measured set of activities designed to produce a specified output for a particular customer or market. It implies a strong emphasis on how work is done within an organization” - Davenport & Short, 1990
  5. 5. Business Process <ul><li>Generic Definition </li></ul><ul><li>“ a set of activities that transform a set of inputs into a set of outputs (goods or services) for another person or process using people and tools” </li></ul><ul><li>“ a collection of business activities that creates value for the customer” </li></ul>Inputs Supplier Process Customer Outputs
  6. 6. Business Process <ul><li>What are Business processes? </li></ul><ul><li>sequences and combinations of business activities. </li></ul><ul><li>management processes control and coordinate these activities and ensure that business objectives are delivered. </li></ul><ul><li>support processes, the name implies, provide infrastructural and other assistance to business processes. </li></ul><ul><li>Business Processes can be further differentiated into knowledge-based and operational processes . </li></ul>
  7. 7. <ul><li>What are Knowledge-based processes? </li></ul><ul><li>Product development, research activities, advertisement, and management consulting. </li></ul><ul><li>These processes typically are of non-standard nature </li></ul><ul><li>They rely on the knowledge and creativity of the persons involved. </li></ul><ul><li>Knowledge-based processes are not dominant in </li></ul><ul><li>Business Reengineering projects. </li></ul><ul><li>- Davenport; Jarvenpaa; Beers, 1996 </li></ul>Knowledge-based Processes
  8. 8. Operational Processes <ul><li>What are Operational processes ? </li></ul><ul><li>Customer service, procurement, and manufacturing. They are at the heart of most Business Reengineering efforts. </li></ul><ul><li>They are classified by their relative stability, standardisation and repeatability. </li></ul><ul><li>Operational processes are further classified into key and </li></ul><ul><li>secondary processes. Key processes directly support the </li></ul><ul><li>mission and the strategies of the company. </li></ul>
  9. 9. Business Process Components <ul><li>They have people / customers (internal or external) </li></ul><ul><li>They have information and decision made </li></ul><ul><li>They have channels to transmit information </li></ul><ul><li>They cross organizational boundaries, i.e., they occur across or between organizational sub-units </li></ul>
  10. 10. <ul><li>Generic Customer </li></ul><ul><ul><li>Marketing & Sales </li></ul></ul><ul><ul><li>Product/Service Development </li></ul></ul><ul><ul><li>Manufacturing </li></ul></ul><ul><ul><li>Distribution </li></ul></ul><ul><ul><li>Billing </li></ul></ul><ul><ul><li>Order Processing </li></ul></ul><ul><ul><li>Customer Service </li></ul></ul>Business Process Examples
  11. 11. Business Process Examples <ul><li>Industry-specific Customer </li></ul><ul><ul><li>Loan processing (Banking) </li></ul></ul><ul><ul><li>Claims (Insurance) </li></ul></ul><ul><ul><li>Grant allocation (Government) </li></ul></ul><ul><ul><li>Merchandise return (Retail) </li></ul></ul><ul><ul><li>Food order & preparation (Restaurant) </li></ul></ul><ul><ul><li>Baggage handling (Airlines) </li></ul></ul><ul><ul><li>Reservations (Airlines) </li></ul></ul>
  12. 12. Business Process Examples <ul><li>Generic Administration </li></ul><ul><ul><li>Budgeting </li></ul></ul><ul><ul><li>Training </li></ul></ul><ul><ul><li>Human Resource </li></ul></ul><ul><ul><li>Facilities Management / Maintenance </li></ul></ul><ul><ul><li>Purchasing </li></ul></ul><ul><ul><li>IT </li></ul></ul><ul><ul><li>Finance / Accounts </li></ul></ul>
  13. 13. <ul><li>Objectives </li></ul><ul><li>Process Streamlining </li></ul><ul><li>Flexibility & Responsiveness </li></ul><ul><li>Global competitiveness </li></ul><ul><li>Corporate rightsizing </li></ul><ul><li>Drivers </li></ul><ul><li>Competition is Intense </li></ul><ul><li>Globalisation has become a norm </li></ul><ul><li>Change has become constant </li></ul><ul><li>Customers have become powerful </li></ul>Objectives & Drivers of BPR
  14. 14. Forces reshaping businesses <ul><ul><ul><li>Previous Now </li></ul></ul></ul><ul><li>Competition : Local/regional National/Global </li></ul><ul><li>Markets: Mass Focused </li></ul><ul><li>Operations: Controlled Flexible </li></ul><ul><li>Focus: Performance Best service </li></ul><ul><li>Performance: Short term Sustained </li></ul>
  15. 15. <ul><li>All things to all people? </li></ul><ul><li>Documenting procedures and processes to ISO standards? </li></ul><ul><li>Systems implementation? </li></ul><ul><li>IS strategy deployment? </li></ul>What is BPR ?
  16. 16. Business Process Re-engineering <ul><li>Business Process Re-engineering is : </li></ul><ul><li>“ the fundamental rethinking and radical design of entire business processes enabled by information technology to achieve dramatic improvements in business performance “ </li></ul><ul><li>- Hammer & Champy </li></ul>
  17. 17. <ul><li>Business Process Re-design is : </li></ul><ul><li>“ the analysis and design of workflows and processes within and between organizations “ </li></ul>Business Process Re-design
  18. 18. Fundamental Rethinking <ul><li>Why do we do what we do? </li></ul><ul><li>Why do we do it the way we do? </li></ul><ul><li>Re-engineering first determines what a company must do, then how to do it </li></ul><ul><li>It takes nothing for granted </li></ul><ul><li>It ignores what is and concentrates on what should be </li></ul>
  19. 19. <ul><li>It means getting to the root of things </li></ul><ul><li>It means starting all over again and isn’t about fixing things </li></ul><ul><li>It is low in cost with problem at the design stage rather than at the execution stage </li></ul><ul><li>It means enabling new or existing processes using IT </li></ul>Radical Redesign
  20. 20. <ul><li>BPR is an integrated program of change which has a major impact on an organization for several reasons: </li></ul><ul><ul><li>Sponsored by senior management </li></ul></ul><ul><ul><li>Driven from the top down. Begins and ends with customer value </li></ul></ul><ul><ul><li>Applies to multiple business functions, departments and locations </li></ul></ul><ul><ul><li>Involves cultural, organizational and role changes that must be managed </li></ul></ul><ul><ul><li>Radical improvements will take place </li></ul></ul>BPR & Change
  21. 21. BPR – Challenging current practices BPR: Challenge current practices + = + = Analyse process. Fix if broken Automate process Outdated processes reinforced - no radical improvement Understand current situation and future vision of the enterprise Invent new ways of working & design new process. Use IT to enable change Conventional: Automate existing process Clearly defined processes integrated to meet customer needs and add value
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