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  1. 1. Business Process Reengineeringand Information Technology
  2. 2. Objectives The impact of IT The reengineering of work IT and Business Process Redesign
  3. 3. The role of information technology Information technology (IT) has historically played an important role in the reengineering concept.[10] It is considered by some as a major enabler for new forms of working and collaborating within an organization and across organizational borders[ Early BPR literature [11] identified several so called disruptive technologies that were supposed to challenge traditional wisdom about how work should be performed. Shared databases, making information available at many places Expert systems, allowing generalists to perform specialist tasks Telecommunication networks, allowing organizations to be centralized and decentralized at the same time Decision-support tools, allowing decision-making to be a part of everybodys job Wireless data communication and portable computers, allowing field personnel to work office independent Interactive videodisk, to get in immediate contact with potential buyers Automatic identification and tracking, allowing things to tell where they are, instead of requiring to be found High performance computing, allowing on-the-fly planning and revisioning
  4. 4.  Business process reengineering (BPR) is the analysis and redesign of workflow within and between enterp 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.rises. 
  5. 5.  Business process re-engineering is a business management strategy, originally pioneered in the early 1990s, focusing on the analysis and design of workflows and processes within an organization. BPR aimed to help organizations fundamentally rethink how they do their work in order to dramatically improve customer service, cut operational costs, and become world-class competitors. [1] In the mid-1990s, as many as 60% of the Fortune 500 companies claimed to either have initiated reengineering efforts, or to have plans to do so. Business process re-engineering is also known as business process redesign, business transformation, or business process change management.
  6. 6. The Impact of IT To improve efficiency To improve effectiveness To facilitate transformation
  7. 7. The Impact of IT On individual Efficiency Task Word processing mechanization Spreadsheet Effectiveness Work Using database to improvement generate sales letters Transformation Role expansion Doing what if analysis for investment client
  8. 8. The Impact of IT On individual Efficiency Task Word processing mechanization Spreadsheet Effectiveness Work Using database to improvement generate sales letters Transformation Role expansion Doing what if analysis for investment client
  9. 9. The Impact of IT On functional unit Efficiency Process Order entry, credit automation checking Effectiveness Functional CAD, CAM enhancement Transformation Functional CD ROM disks for redefinition business research
  10. 10. The Impact of IT On the organization Efficiency Boundary Linking customers extension and suppliers Effectiveness Service Online enhancement diagnostics databases Transformation Product videoconferencing innovation
  11. 11. Reengineering of Work Historically, organizations have become hierarchies of complex functions over time.  The division of labor  Command and control structure  Nature of post-world war II market What has changed?? BPR changes processes not functions , geographies, department or tasks. It is not reorganizing or downsizing.
  12. 12. Reengineering of Work Customers have power over suppliers Competition has changed TechnologyREASONS FOR RE-ENGINEERING :-. HIGH dEmANd , EFFIcIENcy ANd cONtROl.INNOvAtION , SpEEd , SERvIcE & quAlIty.
  13. 13. Reengineering of Work (examples)Wal-Mart’s inventory managementprocess Wal- Mart lets Proctar & Gamble know how much stock it moves from its distribution centers into its stores. P&G inturn tells Wal-Mart how much it needs to order P&G can anticipate the demand and schedule its production Wal-Mart offloads its inventory mgmt. to vendor and receive inventory into its stores even before it pays P&G
  14. 14. Reengineering of Work (examples)Ford’s accounts payable systemTraditional process Reengineered process Multiple deptts.  We pay when we rec. the goods receivingpurchasing vendor ase order purchasing Purch Purc hase s orde od Co rcha r vendor go Pu py s e c. do of receiving c. ice Re o ord inv ent er m Accounts payable pay Database Acc. payable
  15. 15. Reengineering of Work (examples)Ford’s accounts payable system  Technology is an important part of the new process.  The shared purchasing/ rec./accounts payable database integrates the three functions to accomplish the overall business process, order procurement, successfully
  16. 16. Reengineering Principles  Organize around outcomes and not around tasks  Assigning a person or a team to accomplish a task, rather than using assembly line approach  Have those who use the output of the process actually perform the process
  17. 17. Reengineering Principles  Have those who use the output of the process actually perform the process  Why does a marketing manager have to be a customer of the purchasing deptt?
  18. 18. Reengineering Principles  Treat geographically dispersed units as if they are centralized  Greatest inefficiencies occur because decentralized divisions maintain their own information systems
  19. 19. Reengineering Principles Link parallel activities during the process rather than at the end Capture information once at the source  At mutual benefit life, the same information was entered into as many as five different databases. When the process was reengineered, integrated databases were designed.
  20. 20. Roles in BusinessReengineeringSponsor Sees the big picture Provides the resourcesSteering committee Oversees the reengineering projectDesign teams Knowledgeable operating managers, creativeChampion Middle manager with leadership role Direct line to sponsorImplementation team Focuses on implementation Open to change, motivate others
  21. 21. Steps in Business ProcessRedesign (case Mutual Benefit Life) Develop business vision and process objectives  To reduce time and cost of underwriting an insurance policy in order to provide timely and competitive service to its customers Identify processes to be redesigned  Underwriting an insurance policy. The current process involves 40 steps, more than 100 people, 12 functional areas and 80 separate jobs
  22. 22. Steps in Business ProcessRedesign (case Mutual Benefit Life) Understand and measure existing processes  Management established a goal of improving productivity by 40 percent Identify IT levers  Created a new role, the case manager, to perform and coordinate all underwriting tasks centrally. This decision making process was made possible by work station based computer system capable of pulling data from all over the
  23. 23. Steps in Business ProcessRedesign (case Mutual Benefit Life) Design and build a prototype of the process  In the prototyping process the company made some organizational changes. After a brief start up period, the firm learned that some underwriting cases needed two additional roles: specialists like lawyers and clerical assistance.With the new roles and redesigned processes, senior managers believed the firm will reach the 40% productivity improvement goal
  24. 24. Management challenges inBusiness Process Redesign ?
  25. 25. THANK YOU!!Reference Book: MIS by Mary Summer and Robert