Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Business Process Reengineering (BPR) by Operational Excellence Consulting

9,747 views

Published on

Business Process Reengineering (BPR) is the fundamental rethinking and radical redesign of business processes enabled by information technology to achieve dramatic improvements in business performance. BPR may be the answer to organizations who are expecting results over and beyond what continuous improvement techniques can offer. Companies that have successfully reengineered are Ford, Bell Atlantic, Mutual Benefit Insurance and Xerox among others.

LEARNING OBJECTIVES:

By the end of the program, you will:
1. Be equipped with the principles and concepts of business process reengineering
2. Be familiar with the characteristics of reengineered processes
3. Have learned a structured approach to reengineer processes for maximum productivity
4. Have gained knowledge on the impacts of BPR and guidelines for change management

CONTENTS:

1. Introduction
2. Process management
3. Overview of BPR
4. Organizing for BPR
5. Process Diagnosis
6. Process Redesign
7. Process Implementation
8. Impact of BPR
9. Guidelines for Change Management
10. Pitfalls to Avoid

Published in: Business

Business Process Reengineering (BPR) by Operational Excellence Consulting

  1. 1. © Operational Excellence Consulting. All rights reserved. Business Process Reengineering (BPR) © Operational Excellence Consulting. All rights reserved.
  2. 2. © Operational Excellence Consulting. All rights reserved. 2 Learning Objectives By the end of the program, you will: 1. Be equipped with the principles and concepts of business process reengineering 2. Be familiar with the characteristics of reengineered processes 3. Have learned a structured approach to reengineer processes for maximum productivity 4. Have gained knowledge on the impacts of BPR and guidelines for change management Copyrights of all the pictures used in this presentation are held by their respective owners.
  3. 3. © Operational Excellence Consulting. All rights reserved. 3 Contents 1. Introduction 2. Process management 3. Overview of BPR 4. Organizing for BPR 5. Process Diagnosis 6. Process Redesign 7. Process Implementation 8. Impact of BPR 9. Guidelines for Change Management 10.Pitfalls to Avoid NOTE: This is a PARTIAL PREVIEW. To download the complete presentation, please visit: http://www.oeconsulting.com.sg
  4. 4. © Operational Excellence Consulting. All rights reserved. 4 The Case for BPR • Constant need to satisfy and delight customers • Increasing competition • Increasing momentum of change • Techniques lag behind technology • Problem of the stovepipe • Fragmented, piecemeal systems • Integration • To deliver superior financial results
  5. 5. © Operational Excellence Consulting. All rights reserved. 5 Impetus for Reengineering: Improving Competitiveness Making our processes more EFFECTIVE Making our processes more ADAPTABLE Making our processes more EFFICIENT Improving Competitiveness
  6. 6. © Operational Excellence Consulting. All rights reserved. 6 BPR Achieves Dramatic Improvement Examples of Success Stories: 1. Ford reduced its account payable headcount by 75%. 2. Bell Atlantic cut the cycle time for installing carrier services for customer from 15 days to 3 days. 3. IBM Credit Company reduced loan application turn around time from 6 days to 4 hours while loan applications increased by 100 times. 4. Mutual Benefit Life improved underwriting efficiency by 40%. 5. Xerox redesigned its order fulfillment process and improved service levels by 75-97% and cycle times by 70% with inventory savings of $500 million.
  7. 7. © Operational Excellence Consulting. All rights reserved. What is BPR? “BPR is the FUNDAMENTAL rethinking and RADICAL redesign of business PROCESSES enabled by information technology to achieve DRAMTIC improvements in business performance.” - Hammer & Champy, 1993
  8. 8. © Operational Excellence Consulting. All rights reserved. 8 What BPR Is NOT • Another idea imported from Japan • Automation or implementing an IT system • Incremental improvement or a quick repair job • Outsourcing • Downsizing • A bottom-up small group activity • Transforming every aspect of your organization
  9. 9. © Operational Excellence Consulting. All rights reserved. 9 Aims of BPR  Reducing costs significantly  Eliminating repetitive, paper-intensive, bureaucratic tasks  Improving product/service quality
  10. 10. © Operational Excellence Consulting. All rights reserved. 10 Differences between BPR & Continuous Improvement Factors BPR Continuous Improvement Degree of change Radical Incremental, continuous Goal Dramatic improvement Small, cumulative enhancement Characteristics of change Abrupt change Gradual, constant change Organizational impact High Low Relative risk High Low Implementation Directive, top down Empowered, bottom up Philosophy Scrap and rebuild Maintain and improve Senior management involvement Intensive throughout Up-front Enablers IT, organizational design Total Quality Management Potential use of IT Very high Incidental (short)
  11. 11. © Operational Excellence Consulting. All rights reserved. 11 Principles of BPR • Organize around outcomes, not tasks. • Have those who use the output of the process perform the process. • Subsume information-processing work into the real work that produces the information. • Treat geographically dispersed resources as though they were centralized. • Link parallel activities instead of integrating their results. • Put decision points where the work is performed and build controls into the process. • Capture information once and at the source.
  12. 12. © Operational Excellence Consulting. All rights reserved. “85% of the reasons for failure to meet customer expectations are related to deficiencies in systems and processes… rather than the employee.” - Dr. W. Edwards Deming
  13. 13. © Operational Excellence Consulting. All rights reserved. 13 What is a Business Process? • A group of logically related tasks that use the organization’s resources to provide customer-oriented results in support of the organization’s objectives.
  14. 14. © Operational Excellence Consulting. All rights reserved. 14 Process Ownership • A person responsible for the process • Has scope of authority for managing the process Process Ownership Who What When How
  15. 15. © Operational Excellence Consulting. All rights reserved. 15 Key Concepts of BPR 1. Focus on the Customer 2. Focus on the Process 3. Use of IT as a Key Enabler 4. Breakthrough Objectives 5. Challenge Underlying Assumptions 6. Productive Resource Deployment
  16. 16. © Operational Excellence Consulting. All rights reserved. 16 2. Focus on Processes Value flows horizontally across functions to customers Functions are vertical and complex; Managers look up toward the top (the CEO) for direction All work is a process. Every process has requirements which must be met in order to satisfy customers. Customers
  17. 17. © Operational Excellence Consulting. All rights reserved. 17 Breakthrough Incremental Levelof Performance 4. Breakthrough Objectives
  18. 18. © Operational Excellence Consulting. All rights reserved. 18 Phases of BPR 1. Organize for BPR 2. Process Diagnosis 3. Process Redesign 4. Process Deployment •Implement process improvement plan •Measure results •Obtain customer feedback on process performance •Do it all over again •Benchmark the process •Develop solutions to close gaps •Get buy-in •Develop improvement plans •Determine customer requirements •Determine and document current process •Rate the process •Create business process map •Prioritize areas for improvement •Establish process ownership •Form BPR team •Initiate project
  19. 19. © Operational Excellence Consulting. All rights reserved. 19 1.1 Create Business Process Map • Construct inventory of organization’s processes • Identify core processes, support processes and sub- processes Core Process Sub-processes • Product development • Concept design • Prototyping • Detailed design Support Process Sub-processes • Training and development • Training needs analysis • Curriculum design • Training evaluation
  20. 20. © Operational Excellence Consulting. All rights reserved. 20 1.2 Prioritize Areas for Improvement • Identify which areas to reengineer • Assess effectiveness and efficiency of existing processes • Consideration  Importance  Opportunity  Feasibility
  21. 21. © Operational Excellence Consulting. All rights reserved. 21 Responsibilities of and Guidelines for Selecting Process Owners and Teams Process Owner Process Team Responsibilities  Select Process Team members  Identify owners of sub-processes  Monitor process performance  Resolve/Escalate process issues  Initiate process reviews  Allocate process-specific resources  Identify the impact of changing conditions on the process  Ensure business control compliance  Complete the process management steps  Defining and documenting requirements  Establishing measurements  Securing customer agreement  Implement process improvement Selection Guidelines  Accountable for process results  Authority to make decisions affecting the process  Thorough understanding of process  Represent all key participants  Involved in day-to-day process operations  Able to actively participate in improvement efforts
  22. 22. © Operational Excellence Consulting. All rights reserved. 22 2.1 Determine Customer Requirements • Methods and tools • Customer interviews are frequently used to gather information about specific requirements. When interviewing customers, keep in mind that:  Customers may have difficulty articulating their requirements  Customers don’t always tell you everything  What you hear may not be what the customer says  Customers can change their minds Surveys Customer Focus Groups Customer Interviews
  23. 23. © Operational Excellence Consulting. All rights reserved. 23 2.2 Determine & Document Current Process Guidelines for Selecting Measures Performance Characteristics Measures What to Measure Customer-Driven Accuracy  No. of errors  Errors as a percentage of output  Errors as a percentage of opportunities for error  Sales: Incorrect orders shipped  Operations: Defective units; No. of warranty claims  Service: Billing errors; No. of late orders; Complaints Timeliness  Process cycle time  Wait/delay time  Proposal turnaround time  Order processing time  Issue resolution time  Inquiry response time Responsiveness/ Accessibility  Depends on what is measured  Phone response  System downtime  Special requests met
  24. 24. © Operational Excellence Consulting. All rights reserved. 24 2.3 Rate the Process Process Rating Diagnosis Descriptions Best The process outputs are viewed by customers as substantially defect- free. Overall process performance is superior to comparable processes of competitors and other companies. Healthy Major process improvements have been made, with measurable results realized. Environmental change is assessed with process changes anticipated to meet customers’ future requirements. Stable The process is effective (meets the customer’s expectations) and efficient (least cost, time). No significant operational problems exist. Fair The process may have some operational problems, but the resulting weaknesses can be corrected in the near future. Critical The process is ineffective and/or inefficient. The process has major performance problems and require immediate corrective action.
  25. 25. © Operational Excellence Consulting. All rights reserved. 25 3.1 Benchmark the Process • Prior to Process Redesign, it is helpful to summarize the performance data from your Process Diagnosis. This will allow you to:  Review baseline performance against which future performance can be measured  Compare your process’s performance against the performance of benchmark organizations
  26. 26. © Operational Excellence Consulting. All rights reserved. 26 3.2 Develop Solutions Optimize the Process (Simplify, Integrate, Automate) Why? What? Where? When? Who? How? Eliminate Combine Rearrange Simplify QUESTION DEVELOP
  27. 27. © Operational Excellence Consulting. All rights reserved. 27 3.2 Develop Solutions Identify Enabling IT & Generate Alternative Process Redesigns Business Process Reengineering Information Technology Business-pulled Technology-driven How can business processes be transformed using IT? How can IT support business processes? Source: Thomas H. Davenport and James E. Short, “The New Industrial Engineering: Information technology and Business Process Redesign,” Sloan Management Review, Summer 1990, pp. 11-26.
  28. 28. © Operational Excellence Consulting. All rights reserved. 28 4.1 Implement Process Improvement Plan Pilot Your Solution • Once you have finished your Process Improvement Plan, the next step is to implement the planned changes in a pilot or test phase. During this step, it is important to:  Follow the implementation schedule  Keep track of milestones achieved  Make note of any implementation difficulties, so that these problems may be avoided in future efforts  Revise the solution to reflect the lessons learned • An integral part of the implementation plan involves monitoring the results of the improvement pilot.
  29. 29. © Operational Excellence Consulting. All rights reserved. 29 4.4 Do It All Over Again 1. Organize for BPR 2. Process Diagnosis 3. Process Redesign 4. Process Deployment Continuous Improvement
  30. 30. © Operational Excellence Consulting. All rights reserved. 30 What is the Impact on the Employee? Employees are asked to work harder, learn multiple skills and accept constant change if they want to retain their jobs and their market value. Employees will accept if:  Adequate training is provided  There are clear and agreed performance measures  Rewards are related to these measures
  31. 31. © Operational Excellence Consulting. All rights reserved. 31 What is the Impact on the Role of Management? In hierarchies, managers were needed to:  Supply difficult-to-find intelligence  Pass information up and down the hierarchy  Convey accumulated learning and culture of organization In a reengineered network-type organization:  Managers need to be retrained as “orchestra” leaders or as frontline employees  Reward systems need to reflect equal value of “work” as well as “management”  Job reductions are best planned well in advance  “Blockers” must be handled
  32. 32. © Operational Excellence Consulting. All rights reserved. 32 Understand Why People Fear Change Insecurity “What is happening and what will happen to my job?” Reengineering answers:  Segment the audience  Communicate clearly using 4 P’s of: Purpose, Process, Progress and Problems  Simply communicate using multiple channels and multiple voices  Be honest: this in itself may be an indication that profound change is taking place
  33. 33. © Operational Excellence Consulting. All rights reserved. 33 Prepare & Coach Change Project Leaders Source: Elisabeth Kubler-Ross The Change Curve Stage 1 2 3 4 State Status quo Disruption Exploration Rebuilding Reaction Shock, Denial Anger, Fear Acceptance Commitment Positive Negative Impact
  34. 34. © Operational Excellence Consulting. All rights reserved. 34 Plan Long Term for Real Cultural Change Today’s Change Champion might be followed by today’s (hidden) skeptic and tomorrow’s recruits
  35. 35. © Operational Excellence Consulting. All rights reserved. 35 The Top Ten Ways to Fail Reengineering 1. Don’t reengineer but say you are 2. Don’t focus on processes 3. Spend a lot of time analyzing the current situation 4. Proceed without strong executive leadership 5. Be timid in redesign 6. Go directly from conceptual design to implementation 7. Reengineer slowly 8. Place some aspects of the business off-limits 9. Adopt a conventional implementation style 10. Ignore the concerns of your people The Reengineering Revolution Michael Hammer, Steven A Stanton
  36. 36. © Operational Excellence Consulting. All rights reserved. About Operational Excellence Consulting
  37. 37. © Operational Excellence Consulting. All rights reserved. 37 About Operational Excellence Consulting • Operational Excellence Consulting is a management training and consulting firm that assists organizations in improving business performance and effectiveness. • The firm’s mission is to create business value for organizations through innovative operational excellence management training and consulting solutions. • OEC takes a unique “beyond the tools” approach to enable clients develop internal capabilities and cultural transformation to achieve sustainable world-class excellence and competitive advantage. For more information, please visit www.oeconsulting.com.sg
  38. 38. © Operational Excellence Consulting. All rights reserved. To download this presentation, please visit us at: www.oeconsulting.com.sg END OF PARTIAL PREVIEW

×