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Business Process Re-engineering
- 1. Global Management Solutions Business Process Re-engineering
- 2. Learning outcome today Business Process Re-engineering Definition, need and scope
- 3. Definition Businessprocess reengineering (BPR) is the analysis and redesign of workflow within an organization Business process reengineering transforms an organization in ways that directly affect performance. It is an approach for redesigning the way work is done to better support the organization's mission and vision.
- 4. Contd… BPRaimed to help organizations fundamentally rethink how they do their work in order to improve customer service, cut operational costs, and become world-class competitors. It leverages technology and empowers people. Top management commitment is required for BPR
- 5. Business process re-engineering- Objective Aims at: - eliminating repetitive, paper-intensive, bureaucratic tasks -reducing costs significantly -improving product/service quality.
- 6. BPR is Not? BPR may sometimes be mistaken for the following tools: 1. Automation 2. Downsizing 3. Outsourcing 4. Continuous improvement
- 7. 17 Reengineering &Continuous Improvement-- Differences Reengineering Continuous Improvement Differences Level of change Radical Incremental Starting point Clean slate Existing process Participation Top-down Bottom-up Typical scope Broad, cross-functional Narrow, within functions Risk High Moderate Primary enabler Information technology Statistical control
- 8. What is aBusiness Process? A business process is an activity or set of activities that will accomplish a specific organizational goal. E.g.: Procurement, product development, customer service and sales. The business process is divided into a no. of tasks, which often fall under different department.
- 9. Why Reengineer? Customers Demanding Changing Needs Competition Local Global
- 10. Issues- BPR Following issues are considered the biggest obstacles in the success of reengineering projects: 1) Lack of sustained management commitment and leadership 2) Unrealistic scope and expectations 3) Resistance to change 4) Not helping people think in terms of business processes. 5) Neglecting to align measures and rewards
- 11. Aspects of BPR Revolutionizing the way they were doing business Radically redesigning or reengineering key business activities Exploiting IT to redesign the process
- 12. Development Methodology for BPR 1- Develop vision and objectives 2- Identify process for redesign 3- Understand and measure existing process 4- Identify IT levels 5- Pilot trial new process 6- Develop supply solution 7- Make new process operational 8- On going continuous improvement
- 13. Hierarchy of BusinessProcesses Raw material purchasing Accounts receivable Facility Planning Specify requirement s Select vendor Issue Purchase order Make payment Secure approval Verify need Obtain estimate Verify budget Justify request Business processes Sub process es Tas ks
- 14. Categorization of BPRwork Activities Value adding activities : Refers to work or activity for which the customer is willing to pay Non-value adding activities: Refers to business activities that create no value for customers but are required in order to get the value adding done. for example: reporting, checking, controlling etc. Waste: Refers to the work that neither adds nor enables value either to the customer or to the organization.
- 15. Advantages BPRdirectly addresses non-value adding activities in the form of administrative overheads. BPR directly addresses business processes which are customer centric and non function centric BPR offers four R’s to the organization, namely: - Revitalize - Restructure - Reposition - Renew
- 16. Implementation Cost Its is moderate to High at the initial stage Then low once it is implemented Initial expenses mainly go towards data collection and analysis activities. The second major cost is towards consultant’s fees, expenses relating to IT and related issues.
- 17. Implementation Time Generally long Typically, it may take 12-18 months for large companies 60-80% of the time is taken to rationalize the processes. The actual re-engineering takes just 20-40% of the time.
- 18. Impact on Organization Impact of BPR is quite high in terms of : - Profitability - Customer Service - Reduction in inventory - Reduction in administrative overheads BPR drastically improves the competitive positioning of the company
- 19.