business process reengineering.pptx

1. Business Process Reengineering

2. Business Process Reengineering
• Process
a collection of activities
that takes one or more
kinds of inputs and
creates an output that
is of value to a
customer.
• Business Process
a group of logically
related tasks using the
firm's resources to
provide customer-
oriented results to
support organisation's
objectives.

3. Definition of Process
• A process is simply a structured, measured set of activities
designed to produce a specific output for a particular
customers or market.
-- Thomas Davenport
• Characteristics:
– A specific sequencing of work activities across time and place
– A beginning and an end
– Clearly defined inputs and outputs
– Customer-focus
– How the work is done
– Process ownership
– Measurable and meaningful performance

4. Processes Are Often Cross Functional Areas
“Manage the white space on the organization chart!”
Marketing
& Sales
Purchase Production Distribution Accounting
CEO
Supplier
Customer/
Markets
Needs
Value-added
Products/
Services to
Customers
"We cannot improve or measure the performance of a hierarchical
structure. But, we can increase output quality and customer
satisfaction, as well as reduce the cost and cycle time of a process to
improve it."

5. What is Business Process Reengineering?
• An organizational change method used to redesign an
organization to drive improved efficiency, effectiveness, and
economy.
• Organizational change tools may include:
– Activity based costing analysis
– Baselining and benchmarking studies
– Business case analysis
– Functionality assessment
– Industrial engineering techniques
– Organization analysis
– Productivity assessment
– Workforce analysis
– Others, as needed (e.g., human capital tools)

6. Business Process Reengineering Definition
• BPR first introduced in 1990 in a Harvard Business Review
article by Michael Hammer:
– Reengineering Work: Don't Automate, Obliterate.
• Hammer/Champy
– Reengineering the Corporation (1993)
• Provided this definition:
– “Reengineering is 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.”

7. Business Process Reengineering
• “Reengineering is 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.”

8. Key Words
• Fundamental
– Why do we do what we do?
– Ignore what is and concentrate on what should be.
– Need to understand why an organization does what it does – question
all of the rules and assumptions that exist
• Radical
– Business reinvention vs. business improvement
– 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.

9. Key Words
• Dramatic
– Reengineering should be brought in “when a need exits for
heavy blasting.”
• Companies in deep trouble.
• Companies that see trouble coming.
• Companies that are in peak condition.
– Not looking for marginal or incremental improvements or
modification
– Goal is dramatic improvements in performance.

10. Key Words
• Business Process
– a collection of activities that takes one or more
kinds of inputs and creates an output that is of
value to a customer.
– Focus on the way the organization adds value –
through cross-functional business processes
– Move away from function view; task based
thinking

11. GOAL OF REENGINEERING
Reengineering is typically chartered in response
to a breakthrough goal for rapid, dramatic
improvement in process performance.
Continuous improvement activities
peak; time to reengineer process
Breakthrough
Improvement
Continuous improvement
refines the breakthrough

12. The 3 R’s in Reengineering
• Rethink
• Redesign
• Retool

13. Competitive Forces Model
Threat of new
market
entrants
Bargaining
power of
suppliers
Bargaining
power of
customers
Threat of
substitute
products &
services
The firm
Intra-
industry
competitors

14. Why BPR Is Necessary
• The Virtual Organization: Three C’s Driving Change
– Customers take charge.
• Mass market v. a “market of one”
• Backward integration
• Informed consumers
• Demanding
• Sophistication
• Changing Needs
– Competition intensifies.
• More and different kinds
• Local
• Global
• Big is not better
• Technology changes the nature of competition.

15. Customer Demands
• expect us to know everything
• to make the right decisions
• to do it right now
• to do it with less resources
• to make no mistakes
• expect to be fully informed

16. Ethical and social issues
• Legal issues
• Privacy issues
• Ethical issues

17. Accountability and Liability Issues
• Who can be held accountable for mistake
committed by computer system?