related to business management

1. Business Process
Enginering
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2. BUSINESS PROCESS ENGINEERING?
A business process is an activity or set of activities that
accomplish a specific organizational goal. Business
processes should have purposeful goals, be as specific as
possible and produce consistent outcomes.
Business process engineering is the analysis and design of the
current business processes and develop new methods to
optimize processes improve, efficiency, effectiveness,
productivity and operational costs.
EXAMPLES OF PROCESSES:
 Procurement
 Inventory management
 Human resource management
 Implementation of a training plan 2

3. WHAT IS A BUSINESS PROCESS
ENGINEERING?
 Business Process Engineering (BPE) facilitates:
1. Process Optimization: identifies inefficiencies and bottlenecks in workflows,
allowing organizations to streamline operations, reduce waste, and improve
productivity.
2. Automation: enables the automation of non-value-added tasks, freeing up
resources and allowing employees to focus on more strategic and value-adding
activities.
3. Improved Customer Service: can lead to faster response times, better quality
products or services, and enhanced customer satisfaction.
4. Cost Reduction: helps in identifying and eliminating unnecessary steps or
activities, leading to cost savings and improved financial performance.
5. Agility and Innovation: fosters a culture of continuous improvement and
innovation, enabling organizations to adapt quickly to changing market conditions
and customer needs.
Overall, BPE plays a pivotal role in driving organizational transformation and ensuring
long-term sustainability and success.
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4. Value chain and value creation
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5. EXPLANATION OF A BUSINESS PROCESS
“A TYPICAL FIRM”
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DISTRIBUTION
PURCHASING MANUFACTURING
STRIVE FOR VALUE CREATION
HOW WORK IS INTEGRATED ACROSS EACH CORE GROUP
EXAMPLE
ORDER
SHIPMENT
V
A
L
U
E
C
R
E
A
T
I
O
N
CREDIT
CHECKING
WAREHOUSE
OPERATIONS
PACKING
SHIPPING
ORDER TAKING
PROCESS
MATURATION

6. Engineering and reengineering
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7. Levels of Concern
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8. WORKING DEFINITION OF BPE
 BPE is a design, redesign and re-organization of
business activities that starts from questioning the
status quo.
 It seeks to fulfill specific objectives and can lead
to breakthrough improvement.
 It is often associated with significant cultural and
technological changes
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9. 5 ELEMENTS OF WORKING DEFINITION
A focus on the business processes
A questioning of the status quo
Identifying specific objectives
Breakthrough achievement
Significant cultural change
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10. ELEMTS OF THE WORKING DEFINITION
1. FOCUS ON BUSINESS PROCESSES
Focus of BPR is on the integration of processes
and closure of gaps within these sub-processes/
islands of activity.
As organizational complexity increases, operational groups
within the organization tend toward isolation, creating
separate domains, each with its own goals, this phenomena
is referred to as the “Stove Pipe Effect”
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11. ELEMENTS OF THE WORKING DEFINITION
1. FOCUS ON BUSINESS PROCESSES
A supplier of goods did the following item designations:
 Salesperson was required to identify the item numbers,
 This change succeeded in saving 40 hours per week
 Result for the Department:
 Time required to process each order dropped significantly.
 Errors reduced over time from 10 to 0 %
 Upper management was pleased with improved performance
 Announced reward for the Department
However….
 2 % customers started to receive wrong products
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ITEM NUMBER CLASSIFICATION
1001 Coat with 3 buttons
1002 Coat with 2 buttons
2001 Trousers
3001 T-Shirts

12. 2.QUESTIONING OF THE STATUS QUO
 People tend to do tomorrow what they did today because that is what
they did yesterday
 Today ’ s practices automatically become tomorrow ’ s unquestioned
truths and remain in effect forever
 This state is called “continuity of time sequence”
 With the passage of time, redundant work activities develop and add to
overheads
 Breaking away from historical precedent requires conscious effort and
the will to ask questions about what exists and why it exists
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13. 3.FOCUS ON SPECIFIC OBJECTIVES
 Specific objectives for undertaking BPR vary with each
organization and may be:
◦ Satisfying customer demand.
◦ Remaining competitive
◦ Quality improvement
◦ Enhancing speed of customer service
 Specific objective driven BPR projects must accomplish two
important objectives:
◦ Ensure that BPE and BPR effort remains focused
◦ Provide measurement benchmarks for the process
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14. 4.FOCUS ON BREAKTHROUGH RESULTS
 BPR targets significant improvements.
 These results often surpass expectations or conventional
norms and can have a transformative effect on individuals,
organizations, or industries.
 Business processes often contain some non value adding
activities driving up the cost of capital and minimizing flexibility and growth
 BPR aims to eliminate slacks which leads to value reduction
in the product or service.
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15. 4. FOCUS ON BREAKTHROUGH RESULTS
Example
 A tech startup launching a revolutionary product that disrupts
an entire industry and captures a significant market share.
 An organization implementing a new process or technology
that drastically reduces production costs and improves
operational efficiency.
 A research team making a groundbreaking discovery that
advances scientific knowledge and opens up new possibilities
for medical treatments.
 An educational institution implementing innovative teaching
methods that significantly improve student learning outcomes
and graduation rates.
 A nonprofit organization launching a successful fundraising
campaign that exceeds its targets and enables it to expand its
programs and reach more beneficiaries. 15

16. 5.FOCUS ON SIGNIFICANT CULTURAL CHANGE
 Radical business change has a radical impact on people
 Focus on as much social engineering as work engineering
 Changing the behavior of people to work according to the
requirements of system.
 Relying upon persuasion, deception, and manipulation to
achieve the goals.
 Involves eliminating, consolidating and altering work activities
 May lead to significant staff reductions, lay offs, early
retirement programs.
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17. 5.FOCUS ON SIGNIFICANT CULTURAL CHANGE
 Extent of cutbacks creates an environment of uncertainty making BPR an exercise
characterized by fear and anxiety among employees.
 Employer-employee contract now involves:
 Less job security
 Employee’s obligation to learn new skills
 Employer’s increased expectations of innovative work
 Simply doing more with less
 These days it has become essential for employees to adapt to new processes and learn
& update their skills regularly.
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18. Background
 Industrial revolution
 F. W. Taylor, Principles of Scientific Management, 1911
 New technologies have often led to new business processes. Computers and
software systems have provided a major source of new efficiencies
 Two recent developments in management theory deserve special attention.
Systems thinking, and the idea of a value chain.
 Michael Porter 1981
 Geary Rummler was the second major business process guru of the 1980s. Rummler
worked for years on employee training and motivation issues. Eventually, Rummler
and his colleagues established a specialized discipline that is usually termed
Human Performance Technology (HPT).
 Rummler focused upon managing processes as wholes.
 Later, in the 1990s, Hammer and Davenport lead many companies to change and
offered many examples about how changes lead to improved company
performance.
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19. Systems Approach
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20. Value creation and addition
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21. Rummler and Brache’ s Performance Matrix
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22. Rummler and Brache’ s Performance Matrix
 They define three levels of performance:
 (1) an organizational level,
 (2) a process level, and
 (3) a job or performer level.
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23. ROLE OF
INFORMATION TECHNOLOGY
IN
PROCESS ENGINEERING
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24. ROLE OF IT IN ENGINEERING
 Lies in its ability to enable the redesigned
process.
 IT can have the following impacts
1. AUTOMATIONAL: Eliminating human labor from a process and add or increase automation
2. INFORMATIONAL: Capturing process information for the purpose of understanding.
3. SEQUENTIAL: Changing process sequence or enabling parallel functioning
4. TRACKING: Closely monitoring process status and objects
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25. ROLE OF IT IN ENGINEERING
 Impacts
5. ANALYTICAL: Improving analysis of information and decision making.
6. GEOGRAPHICAL: Coordinating processes across distances.
7. INTELLECTUAL: Capturing and distributing intellectual assets like research works & theories
8. ELIMINATION OF MIDDLE LAYERS: Eliminating intermediaries from a process.
9. INTEGRATIVE: Coordinating between tasks and processes
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26. Critical Success Factors in BPE
 Strong executive leadership
 Clear understanding of organizational goals and mission
 Need to know the customer and what HE wants
 Effective project management
 Aiming for early project success
 “Communicate, communicate, communicate”
 Need to ensure that the people are not forgotten or ignored
 Setting specific goals and using objective data.
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27. POSSIBLE FAILURE POINTS
Some of the mistakes identified by analysts
have been:
1. UNCLEAR DEFINITIONS
2. UNREALISTIC EXPECTATIONS
3. INADEQUATE RESOURCES
4. TAKING TOO LONG
5. LACK OF SPONSORSHIP
6. WRONG SCOPE
7. LACK OF AN EFFECTIVE METHODOLOGY
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28. Capability Maturity Model (CMM).
 SEI resulted in a model of the stages that software organizations go through in
their understanding and management of processes.
 This model results in the guidelines for Improving the Software Process.
 CMM explains five stages that organizations go through as they move from an
immature to a mature understanding of business processes.
 These stages were defined using examples from software organizations, but
they apply equally to any large organization.
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