Professional Documents
Culture Documents
Learning Objectives of the unit : Explain the role of Business Process Reengineering (BPR) within the organization Understand the origins and key characteristics of BPR ERP & BPR, Work Flow Management. FIVE STAGE AS IS / TO BE ANALYSIS.
What is BPR ?
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. (Hammer & Champy, 1993)
The Need for BPR Customers (know what they want and are willing to pay for it) Competition (Continuous increase will result in changes to price, quality, selective service, and delivery) Change (continues to occur in people & culture, organizational structures, policies & procedures, and technology)
BPR is Not? Automation Downsizing Outsourcing Process improvement projects / activities Continuous Improvement Activity Reorganizing
Process Simplification
Process Reengineering
Incremental Change Process-Led Assume Attitudes & Behaviors Management-Led Various Simultaneous Projects
Radical Transformation Vision-Led Change Attitudes & Behaviors Director-Led Limited Number of Initiatives
Continuous Improvement
Process Reengineering
Incremental Change People Focus Low Investment Improve Existing Work Unit Driven
Radical Transformation People & Technology Focus High Investment Rebuild Champion Driven
T Q M and Reengineering
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What is a Process? A specific ordering of work activities across time and space, with a beginning, an end, and clearly identified inputs and outputs: a structure for action. (Davenport, 1993)
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What is a Business Process??? A collection of activities that take one or more inputs and turn that into a product that adds value to a customer A group of logically related tasks that use the firm's resources to provide customer-oriented results in support of the organization's objectives
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Why Organizations Dont Reengineer? Complacency Political Resistance New Developments Fear of Unknown and Failure
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Key Characteristics Systems Philosophy Global Perspective on Business Processes Radical Improvement Integrated Change People Centred Focus on End-Customers Process-Based
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Key Characteristics Several jobs are combined into one Employees are empowered to make decisions Steps in business process: natural order Process may have multiple versions Work is performed where it makes the most sense
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Key Characteristics Controls, checks, other non-value-added work is minimized Reconciliation is minimized - minimize external contact points Hybrid centralized / decentralized operation is used A single point of contact is provided for the customer
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Systems Perspective
Feedback
Inputs
Transformation
Outputs
Environment
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Customer-Led
BPR Initiatives must meet the needs of the customer
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Stepped Approach
Process improvements will not happen over night they need to be gradually introduced Also assists the acceptance by staff of the change
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Balanced Improvements
Process improvements must be realistic
Enterprise integration
Departments are consolidated Several jobs are combined into one job \
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People-Centred Business Understanding Empowerment & Participation Organizational Culture Worker empowerment
There is both horizontal and vertical reorganization Handoffs are eliminated There are fewer rules and less coordination is required
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Focus on End-Customers Process improvements must relate to the needs of the organization and be relevant to the endcustomers to which they are designed to serve
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Re-engineering
Redesign of processes (Fundamental change in business processes) From mass production to mass customization (Mass production of the same products --- Mass production of different products) Cycle time reduction (Change in the time it takes to complete a process from start to end; time can provide competitive advantage Restructuring organizations (May need to restructure the entire organization to reap the benefits of BPR)
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BPR Symbols
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A Document
A Decision
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End
Representing a Relation
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A Database File
Representing a Relation
Continuation
Off-Page Connector
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OK?
Yes
End
If one side of the decision has no further processes defined this symbol has to be used
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Purchase Order
Off- Page Connector is used to continue a process at the next page or to let the process to flow over at the previous to the next page. If more than one is needed use A, B, C, D
Posting of Bonus
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Sub-Process Delivery
BC 4.04
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Version Management For different versions of a business process or data flow some mandatory information must be on the flowchart.
Name of the business process Unique number of the business process Revision number Date of last change Author Page number with total pages
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Initiation - Select The Processes Documenting the processes Understand The Current Process AS IS
Develop & Communicate Vision Of Improved TO BE Processes
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Crucial Tasks
Persuasive Case for Action WHY BPR ? Select the Processes to be Reengineered Sponsorship / budget established Appoint the Project Team to Lead the Reengineering Initiative committed (full time Core team with extended team for support). Develop Project scope, plan and milestones A communication plan information flow
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Select the Process Review Business Strategy and Customer Requirements Select Core Processes Understand Customer Needs Dont Assume Anything
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Appoint the Process Team Appoint BPR Champion Identify Process Owners Establish Executive Improvement Team Provide Training to Executive Team
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Capacity to view the organization as a whole Ability to focus on end-customers Ability to assume individual and collective responsibility Ability to challenge fundamental assumptions Courage to deliver and venture into unknown areas
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Michael E. Porter
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Primary activities
Inbound logistics Operations Outbound logistics Marketing and Sales Service Corporate infrastructure Human resources management Technology Development Procurement Materials receiving, storing, and distribution to manufacturing premises Transforming inputs into finished products. Storing and distributing products Promotions and sales force Service to maintain or enhance product value Support of entire value chain, e.g. general management planning, financing, accounting, legal services, government affairs, and QM Recruiting, hiring, training, and development Improving product and manufacturing process Purchasing input
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Support Processes
Inbound Logistics
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Primary Activities:
Inbound Logistics: Inbound activities to receive, store and distribute inputs to the product, such as material handling, inventory control, warehousing and contact with suppliers. Operations: Production activities to create the product such as machining, packaging, printing and testing. Outbound Logistics: Outbound activities to store and distribute the product to customers, including warehousing, order processing and vehicle scheduling. Marketing and Sales: Activities associated with providing a means by which buyers can purchase the product and be included to do so (advertising, selling, pricing, merchandising and promotion). Service: Activities for providing service or maintaining product value, including installation and training.
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Support Activities:
Procurement: Purchasing input. Technology Development: Not just machines and processes but also expertise, procedures and systems. Human Resource Management: Activities involved in recruiting, training and staff development. Infrastructure: General management, finance, planning and quality assurance. Infrastructure supports the whole value chain.
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In the value system supplier, firm, distributor, and buyer value chains overlap. The suppliers outbound logistics is the firms inbound logistics. The Distributors inbound logistics is the firms outbound logistics, etc.
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IT managers care about these models The models provide a map to help managers Find where they are Find where they should go
Goal
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Communicate with all employees so that they are aware of the vision of the future Always provide information on the progress of the BPR initiative - good and bad. Demonstrate assurance that the BPR initiative is both necessary and properly managed
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Promote individual development by indicating options that are available Indicate actions required and those responsible Tackle any actions that need resolution Direct communication to reinforce new patterns of desired behavior
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Identify Action Plan Develop an Action Plan Appoint Process Owners Simplify the Process to Reduce Process Time Remove any Bureaucracy that may hinder implementation
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Identify Action Plan Remove no-value-added activities Standardize Process and Automate Where Possible Up-grade Equipment Plan/schedule the changes Construct in-house metrics and targets Introduce and firmly establish a feedback system Audit, Audit, Audit
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IMPLEMENT Plan Qualify/certify the process Perform periodic qualification reviews Define and eliminate process problems Evaluate the change impact on the business and on customers Benchmark the process Provide advanced team training
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Focus
Business Processes Process Redesign Process Implementation Integration of all functions / across divisions Information flow accurate & on-time MIS reports for facilitating decision making/actions Used to automate transactional and laborious business processes.
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WORK FLOW MANAGEMENT SYSTEM IN ERP Work Flow (Routing) system in ERP is an automated organizational process facilitating communication of work content, coordination between departments / people and control of processes. WFM integrates : Technology Organization / divisions Methodology (processes) Collaboration of Business processes. Communication within / outside using SCM / CRM etc., Human interaction reqd. to meet customer requirements.
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1) determine measures of performance 2) install measures of performance 3) delineate entire existing process in all its gory detail 4) perform process value analysis and activity-based costing 5) benchmark processes by comparison with other processes
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Contd
6) design re-invented process 7) simulate re-invented process 8) prepare report with recommendations 9) install re-invented process 10) measure improvements
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BPR Challenges
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Continuous Evaluation Is reengineering truly transformational? Will reengineering improve customer relations? Has reengineering cut across the organization? Is information technology playing an integral role in the reengineering solution? Does it hurt?
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Common Problems Process Simplification is Common - True BPR is Not Desire to Change Not Strong Enough Starting Point is the Existing Process & Not a Blank Slate Commitment to Existing Processes Too Strong Quick Fix Approach
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Common Problems with BPR Process under review too big or too small Reliance on existing process too strong The Costs of the Change Seem Too Large BPR Isolated Activity not Aligned to the Business Objectives Allocation of Resources Poor Timing and Planning Keeping the Team and Organization on Target
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Managerial Issues
Ethical issues (BPR projects may lead to the need to lay-off, retrain, or transfer employees) BPR implementation (Few organization-wide BPR effort) Incremental improvement programs BPR tools (Often uses existing tools rather than creation of new tools) Role of IT (IT should be a supportive, not lead role in BPR projects) Failures (Big projects tend to increase failure rates)
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Summary Reengineering is a fundamental rethinking and redesign of business processes to achieve dramatic improvements BPR has emerged from key management traditions such as scientific management and systems thinking Rules and symbols play an integral part of all BPR initiatives