The document discusses Business Process Reengineering (BPR). It defines BPR as the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical measures like cost, quality, service and speed. The document outlines that BPR advocates going back to basics and reexamining processes rather than making small incremental improvements. It also discusses that BPR focuses on processes rather than tasks, jobs or people. The document provides examples of successful BPR case studies and discusses the key principles and steps to conducting a successful BPR project.

1. Business Process Re-Engineering
1
Module 1

2. Introduction
 In today’s ever-changing world, the only thing that doesn’t
change is ‘change’ itself. In a world increasingly driven by
the three Cs: Customer, Competition and Change,
 Companies are on the lookout for new solutions for their
business problems. Recently, some of the more successful
business corporations in the world seem to have hit upon an
incredible solution: Business Process Reengineering
(BPR).
 Some of the recent headlines in the popular press read,
“Wal-Mart reduces restocking time from six weeks
 to thirty-six hours.”” Hewlett Packard’s assembly time for
server computers touches new low- four minutes.”
 The reason behind these success stories: Business Process
Reengineering!

3.  “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.”
 BPR advocates that enterprises go back to the basics
and reexamine their very roots. It doesn’t believe in
small improvements. Rather it aims at total
reinvention.
 BPR focuses on processes and not on tasks, jobs or
people.
What is reengineering?

4. Reengineering is not …….
 Automation of existing ineffective processes
 Sophisticated computerization of obsolete
processes
 Playing with organization structures
 Downsizing – doing less with less

5. Effectiveness Vs Automation
 Automation : use technology to automate the “AS
IS” process to make it happen faster - often wrongly
perceived as eGovernment.
 Effectiveness: To improve service and satisfy
customer needs, while lowering costs.

6. Automation & BPR
 Automation is using technological tools to perform
OLD processes, in a NEW way.
 Like putting OLD Wine in a NEW bottle.
 BPR is about Innovation
 Making NEW Wine and putting it in a NEW bottle

7. BPR & Quality Initiatives
 Quality Initiatives attempt continuous improvement
 Six Sigma
 TQM (Total Quality Management)
 BPR attempts a radical redesign or transformation
 Big Bang approach
 Quantum Leap

9. What is BPR?
 Business Process Reengineering (BPR)
means not just change—but dramatic
change and dramatic improvements.
9

10. Keyword – Business process
 “A business process is a series of steps designed to
produce a product or a service. It includes all the
activities that deliver particular results for a given
Customer(external or internal)”.
 Talking about the importance of processes just as
companies have organization charts, they should also
have what are called process maps to give a picture of
how work flows through the company.

11. What is a Business Process
(BP)?
 BP is a collection of activities that takes one or more
kinds of input and creates an output that is of value to
customers
 Examples of BP, in the context of e-Government, are:
 Issuance of a Driving License or Passport
 Registration of a Company
 Audit of a Tax Return
 Release of a Grant

12.  Understanding the fundamental operations
of business is the first step prior to
reengineering.
 Business people must ask the most basic questions about
their companies and how they operate: Why do we do what
we do?
 And why do we do it the way we do?
 Asking these basic questions lead people to understand the
fundamental operations and to think why the old rules and
assumptions exist.
 Often, these rules and assumptions are inappropriate and
obsolete.
12
Keyword: Fundamental

13. Keyword: Radical Redesign
 Radical redesign means disregarding all existing
structures and procedures, and inventing completely
new ways of accomplishing work.
 Reengineering is about business reinvention, begins
with no assumptions and takes nothing for granted.
13

14. Keyword: Dramatic
 Reengineering is not about making marginal
improvements or modification but about achieving
dramatic improvements in performance.
 There are three kinds of companies that undertake
reengineering in general.
 First are companies that find themselves in deep trouble.
They have no choice.
 Second are companies that foresee themselves in trouble
because of changing economic environment.
 Third are companies that are in the peak conditions. They see
reengineering as a chance to further their lead over their
competitors.
14

15. Keyword: Processes
 Process is the most important concept in
reengineering.
 In classic business structure, organizations are divided
into departments, and process is separated into
simplest tasks distributing across the departments.
 The preceding order-fulfilment example shows that
the fragmented tasks - receiving the order form,
picking the goods from the warehouses and so forth -
are delayed by the artificial departmental boundaries.
 This type of task-based thinking needs to shift to
process-based thinking in order to gain efficiency.
15

16. Why Reengineer?
 Historical ‘reality’ for organizations:
 High level of demand: organizations are order takers
 Management (and IT!) focus – efficiency and control of
operations
 Modern ‘reality’ since 1990s:
 Hyper-competiveness
 Globalization
 Very demanding customers
 Management and IT focus: Innovation,
responsiveness/speed, quality and service.

17. Problem Statement
The Problem is that
we are governing in the 21st century
with Processes and Organizations
designed in the 19th Century
to work well in the 20th Century!
We need entirely different
PROCESSES & ORGANIZATIONS
for Governance in the 21st Century

18. Problem restated…
 All processes are simple & efficient when originally
designed
 User-friendly
 Deploying contemporary tools & techniques
 Processes become complex & inefficient with passage of
time
 with addition of sub-processes to handle exceptions
 with changes in environment and
 with increase in customer expectations
 with increase in volumes
We need to
Reinvent
the
processes

19. Ford Motor Company Accounts Payable function
 500 people
 Most work on mistakes between
Purchase
Orders
Receiving
Documents
Invoices

20. Ford (cont)

21. Ford (cont)

22. Symptoms of Poor Governance
 Air of Mystification about procedures
 Long Queues at delivery points
 Multiple Visits to Government Offices
 Pillar-to-Post
 Outcome is in Suspense
 OK or NOT OK !
 Gatekeepers at every turn
 Poor Quality of Service
 Service is a Mercy - not a Right
 Too many Intermediaries, Shortcuts

23. 5 Symptoms of Poor Processes
1. Extensive information exchange, data redundancy
and re-keying
2. Huge inventory, buffers and other assets
3. Too many Controls and Checks
4. Rework, Iteration & Duplication of work
5. Complexity, Exceptions & Special cases

24. 12 Attributes of
Customer-friendly Services
1. Simple
2. Need-based
3. Certainty
4. Speed
5. Convenience
 Place
 Time
 Channel
6. Equitable
7. Responsive
8. Customer-centric
9. Quality of Service
10.Cost-effective
11.Accessible
12.Assisted

25. 3 Goals of BPR
1. Customer Friendliness
 Meeting customer requirements closely
 Providing convenience
2. Effectiveness
 Outcome-based approach
 Gaining loyalty of customers
 Image and branding
3. Efficiency
 Cost
 Time
 Effort

26. Characteristics of BPR
 Process Centered
 Redesign governed
 Radical
 Dramatic
 Customer Oriented
26

28. 7 Basic Principles of BPR
1. Organize around outcomes, not tasks.
2. Identify all the processes in an organization and
prioritize them in order of redesign urgency.
3. Integrate information processing work into the real
work that produces the information.
4. Treat geographically dispersed resources as though
they were centralized.
5. Link parallel activities in the workflow instead of just
integrating their results.
6. Put the decision point where the work is performed,
and build control into the process.
7. Capture information once and at the source.

30. A 4-Pronged Approach to Transformation
Transformation
• Eliminate
• Simplify
• Automate
• Base on Trust
• Integrate
• Join Up
• Legislate
Transforming Process
•
•Multiple Channels
• 24x7
• Access
• Common Service Centres
• Mobile
• Self-Service
• Licensed Intermediaries
Transforming Channels
• Enterprise Architecture
• Standards
• Unified Databases
• Unified Networks
• SOA
• Portals
Using Technology
•
•Training
• Change Management
• CRM skills
• Consultation
• Empowerment
• Education
• Awareness
Transforming People

31. 4 Steps in BPR
1. Understanding the Current Processes
 ‘AS IS’ study – mapping current processes
 Analysis of Root Causes for Inefficiencies
 Identifications of Problems, Issues
2. Inventing a NEW Process (‘TO BE’ Process)
 Survey of Best Practices
 Consultation of Stakeholders
3. Constructing the NEW Process
 Bringing in new Laws and Rules
 Adopting Disruptive Technologies
4. Selling the NEW way of functioning
 Change Management
 Communication Strategy

32. BPR Methodology
Improved
Process
Core Processes
Without Issues
Core Processes
With Issues
Improveme
nt
Plan
Goals, Roles
Boundaries
Implementation
Plan
Strategy
Continuous Improvement
Reengineering - Breakthrough

34. Challenges in a BPR Exercise
1. Identifying Customer Needs & Performance Problems
in the current Processes
2. Reassessing the Strategic Goals of the Organization
3. Defining the opportunities for Re-engineering
4. Managing the BPR initiative
5. Controlling Risks
6. Maximizing the Benefits
7. Managing Organizational Changes
8. Implementing the re-engineered Processes

35. 9 Changes occasioned by BPR
1. Work Units change
 from functional departments to process teams
2. Jobs change
 from simple tasks to multi-dimensional work
3. People’s roles change
 from controlled to empowered
4. Job preparation changes
 from training to education
5. Measures of Performance & compensation change
 from activity to results
6. Criteria for career advancement change
 from performance to ability
7. Values change
 from protective to productive
8. Organizational Structures change
 from hierarchical to flat
9. Executives change
 from scorekeepers to leaders

36. Critical Success Factors in BPR
1. Clear Vision for Transformation
2. Top management commitment
3. Identification of Core Processes for BPR
4. Ambitious BPR team
5. Knowledge of Reengineering techniques
6. Engaging external consultants
7. Tolerance of “genuine failures"
8. Change Management

37. Critical Failure Factors in BPR
1. Trying to Fix a process instead of Changing it
2. Lack of focus on Business-critical Processes
3. Lack of holistic approach
4. Willingness to settle for minor results
5. Quitting too early
6. Limiting the scope of BPR by existing constraints
7. Dominance of existing corporate culture
8. Adopting bottom-up approach
9. Poor leadership
10. Trying to avoid making anyone unhappy
11. Dragging the BPR exercise too long.

38. Hammer & James -BPR
Principles
 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.

39. Process of BPR

40.  Activity #1: Prepare for Reengineering:
 “If you fail to plan, you plan to fail”. Planning and
Preparation are vital factors for any activity or event
to be successful, and reengineering is no exception. Before
attempting reengineering, the question ‘Is BPR necessary?’
should be asked?
 There should be a significant need for the process to be
reengineered.
 A cross-functional team is established with a game plan for
the process of reengineering.
 Another important factor to be considered is to understand
the expectations of your customers and where your existing
process falls short of meeting those requirements.
 Having identified the customer driven objectives, the
mission or vision statement is formulated.

41. Activity #2: Map and Analyze As-Is Process
 Before the reengineering team can proceed to redesign the
process, they should understand the existing process.
 The important aspect of BPR (what makes BPR, BPR) is that
the improvement should provide dramatic results.
 A large manufacturer spent six million dollars over a period
of one year in a bid to develop a parts-tracking system and
was all set to go online. Only then did he realize that he had
totally overlooked a small piece of information – ‘the mode of
transmission of information between the scheduling staff
and the shop floor was through a phone call.’

42. Activity #2: Map and Analyze As-Is Process
 The main objective of this phase is to identify disconnects
(anything that prevents the process from achieving desired
results and in particular information transfer between
organizations or people) and value adding processes.
 This is initiated by first creation and documentation of
Activity and Process models.
 Then, the amount of time that each activity takes and the
cost that each activity requires in terms of resources is
calculated through simulation and activity based
costing(ABC).

43. Activity #3: Design To-Be process
 The objective of this phase is to produce one or more
alternatives to the current situation, which satisfy the
strategic goals of the enterprise.
 The first step in this phase is benchmarking. “Benchmarking
is the comparing of both the performance of the
organization’s processes and the way those processes are
conducted with those relevant peer organizations to obtain
ideas for improvement”
 Having identified the potential improvements we perform
simulation and ABC to analyze factors like the time and cost
involved.

44. Activity #3: Design To-Be process
 The several To-Be models that are finally arrived at are
validated. By performing Trade off Analysis the best possible
To-Be scenarios are selected for implementation.
Activity #4:Implement Reengineered
Process:
•The implementation stage is where
reengineering efforts meet the most
resistance and hence it is by far the most
difficult one.
•The question that confronts us would be,’
If BPR promises such breath taking results
then why wasn’t it adopted much earlier?’

45. Activity #4:Implement Reengineered
Process:
•requirements for the construction of the To-
Be components can be added and the result
organized into a Work Breakdown Structure
(WBS).
•The benefit here is that we can now define
the causal and time sequential relationships
between the activities planned.
•Using prototyping and simulation techniques,
the transition plan is validated and it’s pilot
versions are designed and demonstrated.
• Training programs for the workers are
initiated and the plan is executed in full scale.

46. Activity #5: Improve Process Continuously:
• A process cannot be reengineered overnight.
• very vital part in the success of every
reengineering effort lies in improving the
reengineered process continuously.
• Two things have to be monitored – the progress
of action and the results.
• The progress of action is measured by seeing how
much more informed the people feel, how much
more commitment the management shows and
how well the change teams are accepted in the
broader perspective of the organization.
•As for monitoring the results, the monitoring
should include such measures as employee
attitudes, customer perceptions, supplier
responsiveness etc

47.  30 steps, 5 departments, 19 persons
 Issuance application processing cycle time: 24 hours minimum;
average 22 days
 only 17 minutes in actually processing the application
Department A
Step 1
Department
A
Step 2
Department E
Step 19
. . .
.Issuance
Application
Issuance
Policy
New Life Insurance Policy Application Process at
Mutual Benefits Life Before Reengineering*
*Source: Adapted from Rethinking the Corporate Workplace: Case Manager
at Mutual Benefit Life, Harvard Business School case 9-492-015, 1991.
Mutual Benefits Life Before Reengineering*

48. The New Life Insurance Policy Application Process
Handled by Case Managers
Case Manager
Underwriter
Physician
Mainframe
LAN
Server
PC
Workstation
 application processing cycle time: 4 hours
minimum; 2-5 days average
 Application handling capacity double
 Cut 100 field office positions

49. Enabling IT to Consider
 Client/server technology
 Groupware and collaboration technologies
 Mobile computing (wireless LAN, pen-based computing, GPS,
iPhone)
 Data capturing technology (scanner/barcode reader/RFID)
 Telephony: Integration of computer and telephone systems; VoIP;
Unified communications
 Web services and Service-Oriented Architecture (SOA)
 Imaging technology, work flow management systems, Business
Process Management (BPM)
 Decision support systems, Data warehouse, Business intelligence,
Data mining, Digital dashboard
 ERP, CRM, SCM
 Electronic Data Interchange (EDI), Electronic Commerce, WWW,
and Internet

50. IT Enabling Effects
Dimensions & Type Examples IT Enabling Effects
Order from a supplier
Develop a new product
Approve a bank loan
Manufacture a product
Prepare a proposal
Fill a customer order
Develop a budget
Lower transaction costs
Eliminate intermediaries
Work across geography
Greater concurrency
Integrate role and task
Increase outcome flexibility
Control process
Routinize complex decision
Reduce time and costs
Increase output quality
Improve analysis
Increase participationAdapted from: Davenport, T. H. and Short, J. E., "The New Industrial Engineering: Information Technology and Business
Process Redesign," Sloan Management Review, Summer 1990, p. 17.
Organization Entity
• Interorganization
al
• Interfunctional
• Interpersonal
Objects
• Physical
• Informational
Activities
• Operational
• Managerial

51. The Reengineering Diamond
Business
Processes
& Functions
Management
&
Measurement
Systems
Jobs , Skills, &
Organizational
Structures
Values and
Beliefs
Enlighten
Entail Demand
Foster
Culture
Customers
&
Info. Tech.
Competitors
Markets
Customers &
Suppliers

52. Conclusion:
 An intense customer focus, superior process design
and a strong and motivated leadership are vital
ingredients to the recipe for the success of any
business corporation. Reengineering is the key that
every organization should possess to attain these
prerequisites to success.