Business Process Re-engineering

02 – Principles & Dimensions

 Dimensions & Characteristics

Fundamental changes to process, technology and

human factors to achieve dramatic improvements
in key measures

The dimensions & characteristics:

• Balanced attention to processes, people and

technology
• Cross functional, process based perspective
• Judged by measurable results achieved

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 Process: The Basic Concept

• What is a process?
- “a collection of business activities that creates value for a
customer
- a transformation of inputs(s) into output(s): a state of
change
• Re-engineer processes, not functions or organisations
• Some typical processes:
- concept to prototype : develop product
- target to customer order : acquire customer
- customer order to pay : fulfill order
- purchase request to payment : procure materials
- enquiry to resolution : service
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 Process viewpoint

• Identification and mapping

- identify, name and relate the processes to each other
• Ownership
- assigning owners for all processes
• Measurement
- establishing and communicating end-to-end customer
driven process measures and measurement mechanisms

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 Process viewpoint

• Management
- evaluate process performance against customer needs
and competitive benchmarks
• Awareness
- creating appreciation of the organisation’s processes and
customers
- develop a process-oriented mindset

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 The Business operation
The business operation diamond
e Business Processes en
in
e rm ab
t le
de

Jobs and Structure Values and Beliefs

re
q ui r Management and
e t er
Measurement s
fo
Systems

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 The Impact of BPR
The business operation diamond in context
Competitor actions Technological and
Customer needs environmental factors

Assessment of
capabilities

Business Processes

Jobs and Structure INFRASTRUCTURE Values and Beliefs

Management and
Measurement
Systems
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 Elements of BPR

• Process focus
• Radical change
• Dramatic improvement

BPR is about competitiveness.

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 Process Focus

• A set of linked activities that adds value to the process to

create an effective output
• Focus should be on core business processes that
addresses the external customer and supplier

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 Radical Change

• The objective is to address competitiveness and market-

dominance
• Radical change provides a new way of building core
competencies and good investment management

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 Dramatic improvement

• To achieve major improvement in the core process

• Planning, procedures and resources are required
• Measure, control and manage the process

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 BPR Model

Competitiveness

BPR

Process focus Radical change Dramatic improvement

Change and risk management

Best practices - the foundation for success

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 Why re-engineer ?

• Downsizing / Rightsizing
• Customer satisfaction
• Quality improvement goals
• Functional performance improvement
• Reduce costs
• Increase speed (of service)
• Overcome a competitive threat
• Change of organisational structure

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 Process Improvement Possibilities

• Eliminate duplicate activities

• Combine related activities
• Eliminate multiple reviews and approvals
• Eliminate inspections
• Simplify processes
• Reduce batch size
• Outsource inefficient activities
• Centralise or decentralise functions / activities

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 Reasons to improve processes

• Invisible
– Managers delegate their knowledge
– Process performance is not measured
• Inconsistent
– Jobs, measures and infrastructure are not aligned
with the current process
• Ignored
– Processes often unmanaged and rarely updated
• Ill conceived
– Processes and policies are developed piecemeal and
informally rather than designed as a whole

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 BPR is different

• High ambition
– Improvements in key performance measures, such as
cost, quality, service or speed
• Process focus
– A customer-oriented viewpoint. No organisational
boundaries

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 BPR is different

• Creative rule-breaking
– Finding assumptions about normal business practice
and customers’ needs
• Information technology to enable the above
– IT enables new ways of working through substitution
and automation

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 Typical benefits BPR produces

• Improve customer service

• Reduce cycle time
• Improve quality
• Reduce costs
• Increase market share
• Reduce product development time
• Increase sales

Think of specific examples for various processes

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 Value-chain analysis

• Developed by Michael Porter :

– To classify, understand and analyse an organisation’s
value-added processes to achieve competitive
advantage
– To analyse how to improve cost structure
(productivity) and add value (differentiation)
– Applicable to any industry
– Processes classifed into 5 Primary activities and 4
Support activities

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 Value-chain analysis

Firm Infrastructure

Human Resource Management PR

O
FI
Technological Development T

Procurement

Marketing and Sales

Outbound Logistics
Inbound Logistics

Service
Operations

I T
F
R O
P

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 Value-chain analysis
Financial Regulatory Community
Accounting Legal
Policy Compliance Affairs

Flight/ Route and Baggage Human Resource

Pilot Training Management
Yield Analysis Handling Agent Training Inflight
Pilot Safety
Training Training Training
Technological
Development
Computer Reservation System/ Inflight System/ Flight Product DevelopmentBaggage Tracking
Scheduling System/ Yield Management System Market Research System
Procurement
Information Technology Communications

• Route selection • Ticket counter • Baggage system • Promotion • Lost baggage services
• Passenger operations • Flight connections• Advertising • Complaint follow - up
service system • Gate operations • Rental car and • Advantage
• Yield • Aircraft operations Hotel reservation programmes
management • Onboard services system • Travel agent
system (pricing) • Baggage handling programmes
• Fuel • Ticket office • Group sales
• Flight scheduling
• Crew
scheduling
• Facilities
planning
• Aircraft
acquisition
Inbound Logistics Operations Outbound Logistics Marketing & Sales Service
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