1. Business process reengineering is the fundamental rethinking and radical redesign of core business processes to achieve dramatic improvements in critical performance measures such as quality, cost, and cycle time. 2. It involves fundamentally rethinking processes, disregarding existing structures and procedures, and empowering employees as process teams to achieve end-to-end process alignment rather than departmental focus. 3. Successful reengineering at IBM Credit Corporation reduced credit application turnaround time from a typical 7 days to just 4 hours through radical process changes that streamlined roles and empowered a data structurer to complete applications end-to-end.

1. BUSINESS PROCESS
REENGINEERING

2. Definition of Reengineering
The fundamental rethinking and radical
redesign of core business processes to
achieve dramatic improvements in critical
performance measures such as quality,
cost, and cycle time.
- Hammer and Champy, Reengineering the Corporation, 1993

3. Underlying Features
Fundamental Rethinking
Radical Redesign
Core Business Processes
Dramatic Improvements

4. Key Words
Fundamental :
"Why do we do what we do?" and "Why do we do it the way we
do?" Reengineering ignores what Is and concentrates on what
should be.
Radical :
Disregarding all existing structures and procedures and inventing
completely new ways of accomplishing work
Dramatic :
Reengineering should be brought in “when a need exits for heavy
blasting.”
Process :
The most important key word, Collection of activities taking
multiple inputs to create an output that is of value to the customer

5. Model of
Business Process Reengineering
Fundamental rethinking of
business process
Radical redesign of business
processes
Dramatic & sustainable
improvements in performance

6. Characteristics
1. Business processes are simplified rather than being made more complex.
-Ends up dividing orgn into depts
-Puts together process teams
-Handle work logically
-Size of team depends upon the work
2. Job descriptions expand and become multi-dimensional - people perform
a broader range of tasks.
-Worker becomes part of team
-Full responsibility for the entire process
-Familiarity with each step in the process
-Work becomes multi-dimensional,more rewarding
-Closely related with end result

7. Characteristics
Contd……
3. People within the organization become empowered as opposed to being
controlled.
-Don’t want people who follow the rules
-Value employees who can set their own rules to achieve results.
-Employees are self-starters, self-disciplined and are motivated to achieve
-Focus on Satisfaction is given to customers (not to supervisors as in traditional case)
4. The emphasis within the organization moves away from the
individual and towards the team’s achievements.
-Removes the artificial boundaries put there by department structures
-A process team is formed which assumes total and complete ownership of the Process
-Responsibility and rewards for results need to be spread equitaly throughout the entire team

8. Characteristics
Contd……
5. The organizational structure is transformed from a hierarchy to a flatter
arrangement.
-Decisions are made on a consensus basis rather than by a manager
-Indirect effect of reducing a manager’s role.
-Organizational structure is less of an issue at reengineered companies
6. Professionals become the key focus points for the organization, not the
managers.
-Reengineering will always change the boundaries between different kinds of work
-The creation of value becomes the main focus point
-The people who creates value most effectively will become the center of focus
-Teams will do whatever is required to maximize the efficiency of professionals.
-People are working because they’re motivated to achieve

9. Characteristics
Contd……
7. The organization becomes aligned with the end-to-end process rather
than being focused on departments.
-Process team assumes responsibility for performing a job.
-Organization as a whole becomes focused on results rather than activity

10. The Keys To Reengineering Success
To succeed at reengineering, follow these guidelines:
1.
2.
3.
4.
5.
Always start with the customer and work backwards.
Move fast.
Tolerate risk.
Accept imperfections along the way.
Don’t stop too soon.

11. Themes of Successful Reengineering
1. A focus on processes rather than Organizational Boundaries.
2. The ambition to create breakthrough performance gains.
3. A willingness to break with old traditions and rules.
4. The creative use of new information technology.

12. Themes of Successful Reengineering
…..Contd.
IBM Credit Corporation
Case Study
IBM Credit finances the computers, software and services sold by IBM Corporation.
Before Reengineering :
 6 – 14 days to for processing an application
 Application move from credit dept. to pricing dept.
 From here an administrator wrote out an formal quote letter
What leeds to Reengineering :
 IBM realizes that actual processing time requires only 90 minutes. and
 Rest of time is spent by the Specialist for looking for pile of files

13. Themes of Successful Reengineering
…..Contd.
IBM Credit Corporation
Case Study …contd
Process:
 Four specialists changed to a Data Structurer
who processed the application from start to end using templates on a
new computer system
which provided all the data and tools each specialist commonly used.
 Asks the suppourt of Specialists for additional expertise by Data
Structurer in RARE CASES only
After Reengineering :
 Turnaround time was reduced from a typical 7-days to 4-hours.
 Achieve a hundred fold improvement in productivity without any
increase in staff members.
 Handle 100 times the number of credit applications handles before
reengineering was undertaken

14. Themes of Successful Reengineering
…..Cont.
IBM Credit Corporation
Case Study…..Contd
‘‘IBM Credit achieved a dramatic performance breakthrough by
making a radical change to the process as a whole. IBM Credit did not
ask,
"HOW DO WE IMPROVE THE CALCULATION OF A FINANCING QUOTE?"
or
“HOW DO WE ENHANCE CREDIT CHECKING?”
It asked instead,
‘HOW DO WE IMPROVE THE CREDIT ISSUANCE PROCESS?’ ’’
-- Michael Hammer & James Champy

15. Benefits
Increase Effectiveness.
Reduces cost.
Meaningful job for employees.
Improvement in organizational approach.
Growth of business

16. Why BPR…….?

17. Integrate people, technology, & organizational
culture to Respond to rapidly changing technical &
business environment and customer’s needs to
achieve
BIG PERFORMANCE GAINS

18. Thank You