OSM652
Office Business Process

BUSINESS PROCESS
BUSINESS PROCESS
REENGINEERING
REENGINEERING
CONCEPTS
CONCEPTS
1
Objectives
Objectives
At the end of the course, you will be able to:
At the end of the course, you will be able to:
a. Def...
What is Business Process
What is Business Process
Reengineering or Redesign?
Reengineering or Redesign?
Reengineering busi...
This definition contains four key
words:
•

FUNDAMENTAL
Fundamental implies that everything – every assumption,
every reas...
This definition contains four key
words:
•

•

DRAMATIC
Do not use business process redesign to obtain marginal
improvemen...
BUSINESS REENGINEERING
DIMENSIONS
1. The Physical/Technical
Dimensions
a) Process Structure
b) Technical Structure
c) Orga...
Dimensions of Business
Reengineering
Physical
Technical Layer

Infrastructure
Layer

Process
Structure

Technology
Structu...
1. PHYSICAL/TECHNICAL
DIMENSIONS
• Most visible, most
concrete
• Process, technology
and organization
structures

– Provid...
a) Process Structure (cont)
• Consist of business process,
their outcomes
(products/services) and the
policies, practices ...
a) Process Structure
• If processes originate by design,
reengineering would be unnecessary

– Maintained to meet evolving...
b) Technology Structure
• Consists of the automated
communication, networking and
computer systems, data,
applications, an...
c) Organization Structure
• Defines who performs,
manages, and is accountable
for each business process
• Includes job str...
2. INFRASTRUCTURE
DIMENSIONS
• Reward, measurement and management
• Support the physical/technical operational
dimensions
...
a) Reward Structure
• Regulate behavior
• Formal, informal, and financial or
recognition based
• Often disconnection of th...
b) Measurement Systems
• The feedback processes that provide
information on process performance
• However, there are too m...
c) Management Methods
• Consists of the practices and techniques
used to supervise, develop, and support the
people who pe...
3. VALUE DIMENSIONS
• Least visible, most difficult to change
• Organizational culture, political power and
individual bel...
a) Organizational Culture
• Consists of the unspoken,
collective rules and beliefs
of the organization
• Organization’s la...
b) Political Power
• Individual can manipulate
and shape the actions and
behaviors of others
• Originate from formal
autho...
c) Individual Belief
Systems
• Attitudes and mental models that
individual apply to themselves, those they
work with, and ...
WHEN IS THE REENGINEERING
THE ANSWER?
•

Focus on changing customer relationship
and repositioning the organization in the...
Situations in which reengineering benefit the
organization:
4. Bring customers into the information channels
5. Decrease r...
WARNING SIGNS OF TROUBLE
FOR REENGINEERING.
1. The explosion of chaos and bureaucracy
2. Thinking of customers
3. Automati...
WARNING SIGNS
1.The explosion of chaos and
bureaucracy

 work processes were not designed – they
evolved out of the chaos...
WARNING SIGNS
3. Automation of existing bureaucracy





Computerization reinforced bureaucracy rather than
breaking t...
WARNING SIGNS
5. Elusiveness of accountability






Most organizations are structured by function (eg. Sales,
manufac...
DIAGNOSIS OF PROCESSES OF
SUSPECT PRODUCTS AND
SERVICES
Possible findings
1.0

Lack of a “big picture” concept and poor co...
The necessity for change

CREATING THE BUSINESS CASE

The alternative to change

28
1. The Necessary for Change
• Translate “what everyone already knows”
into facts and numbers (quantitative data)
– revenue...
2. Alternative to Change
• If not change, what will
happen
– show change effect using
hard and soft data of the
future, if...
Commitments:
•

Once the facts are on
the table:
1. Frame the project
2. Create vision, values and
goals
3. Build detailed...
CRITICAL SUCCESS FACTORS
FOR BR PROJECTS.
1. business focus – a focus on all dimensions
• Success depends on integrating a...
CRITICAL SUCCESS FACTORS FOR BR
PROJECTS
4. Partnership participation
• BR is accomplished only as a result of efforts by
...
CRITICAL SUCCESS FACTORS
• BR begins the process of
transforming a dysfunctional
organization into a learning,
productive,...
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652 topic 1 bpr concepts

  1. 1. OSM652 Office Business Process BUSINESS PROCESS BUSINESS PROCESS REENGINEERING REENGINEERING CONCEPTS CONCEPTS 1
  2. 2. Objectives Objectives At the end of the course, you will be able to: At the end of the course, you will be able to: a. Define business process redesign. a. Define business process redesign. b. Describe the nine dimensions of BR. b. Describe the nine dimensions of BR. c. Discuss the benefits of BPR. c. Discuss the benefits of BPR. d. Identify and describe the situations in which BPR becomes d. Identify and describe the situations in which BPR becomes necessary. necessary. e. Describe the warning signs of trouble that indicate the need e. Describe the warning signs of trouble that indicate the need for reengineering. for reengineering. f. Identify and describe the critical success factors for BR f. Identify and describe the critical success factors for BR projects. projects. 2
  3. 3. What is Business Process What is Business Process Reengineering or Redesign? Reengineering or Redesign? Reengineering business processes means tossing aside existing processes and starting over. Business Process Reengineering is defined as “the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance such as costs, quality and speed”. (Hammer and Champy, 1993) 3
  4. 4. This definition contains four key words: • FUNDAMENTAL Fundamental implies that everything – every assumption, every reason, every activity – is challenged by asking why it should be continued. The implication is that nothing should be accepted as sacred. Over time, practices that were once required become obsolete and need to be removed. • RADICAL Do not try to improve the existing situation, invent completely new ways of accomplishing work. 4
  5. 5. This definition contains four key words: • • DRAMATIC Do not use business process redesign to obtain marginal improvements, aim at order-of-magnitude improvements (ten times). If the marginal gains – 5 to 10 percent – are the goal, then continuous improvement is a more appropriate path than reengineering. PROCESS Focus on the business processes instead of organizational structures. 5
  6. 6. BUSINESS REENGINEERING DIMENSIONS 1. The Physical/Technical Dimensions a) Process Structure b) Technical Structure c) Organization Structure 2. The Infrastructure Dimensions a) Reward Structure b) Measurement Systems c) Management Methods 3. The Value Dimensions a) Organizational Culture b) Political Power c) Individual Belief Systems 6
  7. 7. Dimensions of Business Reengineering Physical Technical Layer Infrastructure Layer Process Structure Technology Structure Organizational Structure Reward Structure Measurement Systems Management Methods Political Power Individual Belief Systems Organizational Value Layer Culture 7
  8. 8. 1. PHYSICAL/TECHNICAL DIMENSIONS • Most visible, most concrete • Process, technology and organization structures – Provides organization’s operational foundation • Mistakenly focused because can easily see and do. 8
  9. 9. a) Process Structure (cont) • Consist of business process, their outcomes (products/services) and the policies, practices and procedures (considerable control/rigidity or flexible and grouped or decomposed into smaller parts) • Defines what, when and how work is performed • Triggered by internal events, timing cycles, or external stimuli • To produce a “quality” outcome in a timely, predictable manner 9
  10. 10. a) Process Structure • If processes originate by design, reengineering would be unnecessary – Maintained to meet evolving business needs • However, most are informal and spontaneous processes – They are not changed as business needs change – Negative impact – work duplication, whole process unorganized, undocumented, inconsistently applied and personality dependent – These processes would need reengineering 10
  11. 11. b) Technology Structure • Consists of the automated communication, networking and computer systems, data, applications, and related technologies – support process structure • Fast and cheap, eliminate timeconsuming and error-producing data entry • Application of technology depends on the competent integration of technology • People depend on technology to solve business problems – People then blame the technology - 11
  12. 12. c) Organization Structure • Defines who performs, manages, and is accountable for each business process • Includes job structure, reporting and work-group relationships, accountabilities, job content, and skill/knowledge requirements • If process and organization’ structure are out of alignment – gaps in accountability 12
  13. 13. 2. INFRASTRUCTURE DIMENSIONS • Reward, measurement and management • Support the physical/technical operational dimensions – If physical/technical change, infrastructure must change • Use reinforcement, provide new skills, managerial support, adequate incentives and feedback 13
  14. 14. a) Reward Structure • Regulate behavior • Formal, informal, and financial or recognition based • Often disconnection of the desired behaviors and behaviors that are actually rewarded, changing reward structures, policies and practices 14
  15. 15. b) Measurement Systems • The feedback processes that provide information on process performance • However, there are too much of information and incomplete information • Should uncover the need for change, reduce the randomness and unpredictability of process performance • Should be made available directly and simultaneously to process performers and managers 15
  16. 16. c) Management Methods • Consists of the practices and techniques used to supervise, develop, and support the people who perform the business process • Strongly affect business process performance (management support, empowerment, employee involvement) • Most neglected because outside of the project scope 16
  17. 17. 3. VALUE DIMENSIONS • Least visible, most difficult to change • Organizational culture, political power and individual belief systems • Leadership and improvement philosophies must emerge – Initial implementation fails if these dimensions left out • Hard to reduce the natural resistance and reaction to change 17
  18. 18. a) Organizational Culture • Consists of the unspoken, collective rules and beliefs of the organization • Organization’s language, symbols, myths and rituals • The older the culture, the more embedded the beliefs and values and the more difficult change becomes 18
  19. 19. b) Political Power • Individual can manipulate and shape the actions and behaviors of others • Originate from formal authority (position held in the organization) or personal power (expertise, knowledge or connections) • Reengineering threats loss of power 19
  20. 20. c) Individual Belief Systems • Attitudes and mental models that individual apply to themselves, those they work with, and the work itself • Shape their attitudes toward others and their behavior on the job • Cultural characteristics – impatience, skepticism, openness, control, rigidity or flexibility 20 • Organization executives must demonstrate leadership
  21. 21. WHEN IS THE REENGINEERING THE ANSWER? • Focus on changing customer relationship and repositioning the organization in the marketplace • Situations in which reengineering benefit the organization: 1. Increase the organization’s ability to customize products and services 2. Increase customer satisfaction with products and services 3. Make it easy and pleasant for customers to do business with your organization 21
  22. 22. Situations in which reengineering benefit the organization: 4. Bring customers into the information channels 5. Decrease response time to customers, eliminate errors and complaints, reduce time cycle 6. Process more customer requests and higher volume from each customer, and deliver “value-driven” prices to customers 7. Improve the quality of work life and individual capabilities 8. Improve sharing and utilization of organization knowledge 22
  23. 23. WARNING SIGNS OF TROUBLE FOR REENGINEERING. 1. The explosion of chaos and bureaucracy 2. Thinking of customers 3. Automation of existing bureaucracy 4. Bottlenecks and disconnects in critical cross-functional processes 5. Elusiveness of accountability 6. Chaos of downsizing 7. The turmoil of integration and merger 23
  24. 24. WARNING SIGNS 1.The explosion of chaos and bureaucracy  work processes were not designed – they evolved out of the chaos of doing business  informal work patterns break under stress  develop a process and rule set to fix mistake  procedures habitualized  new untrained employees and veterans make mistakes unknowingly 2.Thinking of customers  based on assumptions that they know what is best for customers, inflexible, customer frustrated, only the “rules” count 24
  25. 25. WARNING SIGNS 3. Automation of existing bureaucracy     Computerization reinforced bureaucracy rather than breaking through it automation of existing manual procedures inexperience to computers more paper printouts 4. Bottlenecks and disconnects in critical cross-organizational work process     no relationship to other units, must time spent, duplication of work, systems in each department do not correspond with the other units 25
  26. 26. WARNING SIGNS 5. Elusiveness of accountability     Most organizations are structured by function (eg. Sales, manufacturing, etc) but essential business processes (eg. customer service and support) cut across the functions. This makes it difficult no accountability lost of responsiveness and timeliness incomplete, inaccurate, late 6. Chaos of downsizing    It leaves survivors demoralized the work environment inadequately staffed, and people with inadequate skills performing the work tasks can no longer be processed within their current configuration 7. The turmoil of integration and merger  work processes that often conflict and duplicate 26
  27. 27. DIAGNOSIS OF PROCESSES OF SUSPECT PRODUCTS AND SERVICES Possible findings 1.0 Lack of a “big picture” concept and poor communication. 2.0 Inattention to detail. 3.0 Designer arrogance and customer exclusion. 4.0 Focus on correction, not error prevention. 5.0 Measurement problems. 6.0 Focus only on external customers. 27
  28. 28. The necessity for change CREATING THE BUSINESS CASE The alternative to change 28
  29. 29. 1. The Necessary for Change • Translate “what everyone already knows” into facts and numbers (quantitative data) – revenues, customer complaints, direct and indirect processing costs, rates of absenteeism, volume of back orders, costs to correct errors and delays in deliveries. – evaluate strategic industry trends, the economy, customer preferences and buying patterns and other market research. 29
  30. 30. 2. Alternative to Change • If not change, what will happen – show change effect using hard and soft data of the future, if the organization doesn’t change. – use current data to project today’s bottom line into tomorrow 30
  31. 31. Commitments: • Once the facts are on the table: 1. Frame the project 2. Create vision, values and goals 3. Build detailed process redesign of the business operations 4. Plan the implementation 5. Conduct a proof of concept (if needed) 31
  32. 32. CRITICAL SUCCESS FACTORS FOR BR PROJECTS. 1. business focus – a focus on all dimensions • Success depends on integrating all three – process, technology and organization • plus supporting that integration with new infrastructure and values 2. A methodology and project approach • requires discipline and structure • methodology must be systematic and fact focused • must articulate how to secure funding, manage power struggles, and sell the new ideas 3. Time • BR takes time. Executives must be able to stick with the program 32
  33. 33. CRITICAL SUCCESS FACTORS FOR BR PROJECTS 4. Partnership participation • BR is accomplished only as a result of efforts by people from all over the organization • Requires flexible and trained teams 5. Visible, active leadership • This is the most important of all the critical success factors • Requires long-term commitment to BR – in terms of dollars, people and executive visibility 33
  34. 34. CRITICAL SUCCESS FACTORS • BR begins the process of transforming a dysfunctional organization into a learning, productive, quality-focused, customer driven. • BR must be customer driven. • Quality is defined in terms of added value, cost sensitivity, responsiveness, and functionality. • BR must enable people to handle more change successfully. 34

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