2_Implementing Business Process Re-Engineering

Strategy Planning Activity Based Costing (ABC) Business Contingency Planning S A PChange Management BPR ISO9000 Business Process ImprovementWorkflow Implementation ERP EFQM Financial Modelling TQM System IntegrationActivity Based Costing (ABC) Business Contingency Planning ERP Strategy PlanningBusiness Process Improvement ISO9000 Change Management BPRSAP E F Q M Financial Modelling TQM System Integration Workflow ImplementationStrategy Planning Activity Based Costing (ABC) Business Contingency Planning S A PChange Management BPR ISO9000 Business Process ImprovementWorkflow Implementation ERP EFQM Financial Modelling TQM System IntegrationActivity Based Costing (ABC) Business Contingency Planning ERP Strategy PlanningBusiness Process Improvement ISO9000 Change Management BPRSAP E F Q M Financial Modelling TQM System Integration Workflow Implementation Strategy Planning Activity Based Costing (ABC) Business Contingency Planning S A PChange Management BPR ISO9000 Business Process ImprovementWorkflow Implementation ERP EFQM Financial Modelling TQM System IntegrationActivity Based Costing (ABC) Business Contingency Planning ERP Strategy PlanningBusiness Process Improvement ISO9000 Change Management BPRSAP E F Q M Financial Modelling TQM System Integration Workflow Implementation Strategy Planning Activity Based Costing (ABC) Business Contingency Planning S A PChange Management BPR ISO9000 Business Process ImprovementWorkflow Implementation ERP EFQM Financial Modelling TQM System IntegrationActivity Based Costing (ABC) Business Contingency Planning ERP Strategy PlanningBusiness Process Improvement ISO9000 Change Management BPRSAP E F Q M Financial Modelling TQM System Integration Workflow ImplementationStrategy Planning Activity Based Costing (ABC) Business Contingency Planning S A PChange Management BPR ISO9000 Business Process ImprovementWorkflow Implementation ERP EFQM Financial Modelling TQM System IntegrationActivity Based Costing (ABC) Business Contingency Planning ERP Strategy PlanningBusiness Process Improvement ISO9000 Change Management BPRSAP E F Q M Financial Modelling TQM System Integration Workflow Implementation Strategy Planning Activity Based Costing (ABC) Business Contingency Planning S A PChange Management BPR ISO9000 Business Process ImprovementWorkflow Implementation ERP EFQM Financial Modelling TQM System IntegrationActivity Based Costing (ABC) Business Contingency Planning ERP Strategy PlanningBusiness Process Improvement ISO9000 Change Management BPRSAP E F Q M Financial Modelling TQM System Integration Workflow ImplementationStrategy Planning Activity Based Costing (ABC) Business Contingency Planning S A PChange Management BPR ISO9000 Business Process Improvement

I M P L E M E N T I N G

B u s i n e s sP ro c e s s

R e - e n g i n e e r i n g

A balancedapproach

Advancedperformance

Flexibility

Contents

1.0 Introduction 1

1.1 Methodology versus Intuition 1

1.2 What Does a Methodology Offer ? 2

1.3 Problems with Methodologies 3

1.4 A Framework for Implementation 4

2.0 Identifying Processes for Redesign 5

3.0 Process Visualisation 8

4.0 Understanding Existing Processes 14

5.0 Redesigning New Processes 16

6.0 The Structure of Re-engineering Teams 19

6.1 The Re-engineers 20

6.2 The Insiders 21

6.3 The Champion 21

6.4 The Public Relations Person 21

7.0 Conclusion 21

Tables

Table 1: Two Re-engineering Frameworks 5

Table 2: Common Symptoms of Process Distress 6

Table 3: Davenport’s Method for Selecting Processes for Redesign 6

Table 4: Davenport’s Method for Process Visualisation 9

Table 5: Davenport’s Method for Understanding the Existing Process 15

Table 6: Process Methods Overview 16

Table 7: Davenport’s Method for Redesigning the New Process 17

Table 8: Level of Process Design 17

Figures

Figure 1: Business Vision, Strategy and Process Visualisation

Hierarchy 9

Figure 2: The Visioning Process 12

Copyright© CASEwise 1999

Implementing Business Process Re-engineering

NOTE: REVERSE OFCONTENTS IS BLANK

ImplementingBusiness Process Re-engineeringR.F. Pearman

1.0 Introduction

Creating the new enterprise involves considerable change in virtually everything to do withpeople’s working lives. Rather than fixing the old, we set out to create the new. There isa fundamental transformation occuring in business - in terms of its structure, processes,people, and technology - as described in the first part of this series of white papers; "TheTheory of Business Process Re-engineering".

The primary objective of this white paper (part 2) is to examine how to go about re-engineering business processes. Research in this area reveals that papers that actually dealwith radical redesign are more difficult to find than papers that merely encourage the useof BPR. It is far easier to be converted to a new religion than to practise it1.

This white paper begins with a discussion of the two opposing views that currently exist,i.e. whether re-engineering should be conducted from a methodical or an intuitive viewpoint. We highlight the fact that it is difficult to assess the value of either approach becausethere are numerous examples relating to the success of both techniques. Therefore, wediscuss only two approaches, one proposed by Davenport (1993)2 and the other fromHammer and Champy (1993)3, which contrast the differences between methodology andintuition.

From these two approaches, we identify four steps that are of paramount importance inthe re-engineering effort. We describe each step and compare the two practitioners'approaches.

A brief discussion on the structure of re-engineering teams follows. This supports theanalysis conducted in the third in this series of white papers, “Tools for Business Process Re-engineering”, which identifies how the project team can use the CASEwise CorporateModeler software to support a re-engineering project.

1.1 Methodology versus Intuition

A number of approaches have been developed for business re-engineering. The mosthyped by far is that proposed by Michael Hammer and James Champy in their book, Re-engineering the Corporation. They focus on defining the “hard” aspects of re-engineering(i.e. process and enabling technology). The virtue of their book is its brevity, readability, andclarity. The book explains the "nuts and bolts" of the re-engineering process and illustratesthem with case studies.

1Lorenz, C., (1993),“Management: Uphill Struggleto Become ‘Horizontal’”, Financial Times.

2Davenport, T., (1993), “ProcessInnovation: Re-engineeringWork Through Information Technology”, Harvard Business School Press.

3Hammer, M., Champy, J.,(1993) “Re-engineering the Corporation: A manifesto forBusiness Revolution”, NicholasBrealey Publishing.



Another book that provides a useful insight into the re-engineering effort is ProcessInnovation (Davenport, 1993). This book does a better but less readable job of relating allthe soft and hard elements of re-engineering to each other.

The primary difference between the two is "methodology" versus "intuition". Some BPRpractitioners rely on a more intuitive approach, rejecting analysis in favour of what they seeas a "higher level understanding". People in this camp believe that over-attention tocurrent practices is an obstacle to breakthrough thinking4. They believe in starting with aclean slate and rely on their imagination and experience. For instance, James Champystates that re-engineering is "contextual" - i.e. it is a function of how an enterprisebehaves, of its belief systems, of its position in the marketplace, and of the character of itspeople. Therefore, it is absolutely impossible to have a structured approach.

However, the methodologists, such as Davenport, argue that sitting down with a blankpiece of paper with no guidance on how to begin is dismaying. They observe that peoplewho use intuitive approaches, although frequently becoming enthusiastic proponents ofBPR, still end up not knowing how to do it.

Roy Thompson, Principal consultant with CASEwise with many years experience of practicalBPR projects in major corporations, states

BPR is itself a process, its steps can be easily described. However, the techniques employed at each step of a project

are highly context sensitive which makes a BPR initiative appear intuitive.

The main distinction between the two approaches is that intuitive tells you “where to go”while methodological approaches tells you “what to do to get there”. The latter can befurther decomposed into prescriptive and descriptive. Descriptive simply tells you what todo while prescriptive tells you how to do it.

1.2 What Does a Methodology Offer ?

Olle et al (1991)5 define an information systems methodology as “a methodical approachto information systems planning, analysis, design, construction and evolution”, andcharacterise different methodologies primarily by their “steps” and “components” (ordeliverables). The key idea of a methodology is that it has some level of universality; it canbe applied or adapted to a variety of business domains4.

Simison (1994)6 observes that using a methodology is appealing for a number of reasons.Specifically, it:

• Introduces a minimum level of discipline into the task - the alternative to this issummarised in the classic example where a project team starts coding from the outsetgiving insufficient attention to analysis and design.

• Entails less effort and intellectual input than an intuitive approach.

4Klien, M.M., (1994),

“Re-engineering Methodologies and Tools: A Prescription for EnhancingSuccess”, InformationSystems Management Journal.

5Olle, T.W., Hagelstein, J.,

McDonald, I.G., Rolland, C., Sol,H.G., Van Assche, F.J.M.,Verrijn-Stuart, A.A, (1991),“Information SystemsMethodologies - A Frameworkfor Understanding”, 2ndedition, Addision Wesley.

6Simison, G. C., (1994), “ AMethodology for BusinessProcess Re-engineering?”, IFIPTransactions.



“”

• Provides a means of codifying experience and ideas in a form which can be evaluatedand tested.

• Facilitates planning and monitoring. In particular, the use of the same methodology from project to project allows metrics to be developed so that productivity can be compared and projects monitored.

• Establishes clear definitions for each step and the deliverables. This enables users to contract out individual tasks with confidence that there will be common understanding of what the contractor is required to produce and what inputs will be provided.

• Allows a standard set of skills to be identified and developed. There are obvious benefits in skills acquired on one project to be identified and developed for futureprojects.

• Is a prerequisite for the use of Computer-Aided Software Engineering (CASE) tools.

1.3 Problems with Methodologies

Apart from listing the advantages of the methodological approach, Simison (1994) observesthat the IT profession has been less enthusiastic and successful in its adoption of themethodologies than might have been expected. This is consistent with the view of Hammerand Champy (1993)3. Furthermore, he states that the advantages outlined in the precedingsection have been generally well recognised at the management level, but implementationhas been poor. The reasons for this are as follows:

• Most methodologies do not reflect “best practice”. Some of the more advocated methodologies are based on the view of how systems should be developed rather thansuccessful practical experience.

• Common methodologies for information systems conflict with practice in the assumption that developers will work from “first principles”, treating each business situation as if it were unique in all respects. Developers frequently draw on past experience and assume a level of business knowledge that allows a specification to bedrafted which is often incomplete.

• There is a danger that we incorporate in a methodology only those tasks that are readilyincorporated. This can leave those that are not amenable to methodological treatmentoutside and at risk of being ignored.

• The use of detailed methodologies stifles creativity. The problem is not so much that methodologies do not support creativity, but that they fail to recognise and supportdesign, of which creativity is an important aspect. BPR is recognised as a design process, requiring creativity, innovation and radical thinking. The risks to creativity of attempting to prescribe and use a methodology for BPR include:

3Hammer, M., Champy, J.,

(1993) “Re-engineering theCorporation: A manifesto forBusiness Revolution”, NicholasBrealey Publishing.



• Stifling creativity by attempting to break creative tasks down into smaller stages thus imposing rules that are not essential to meeting the overall objective.

• Focusing on peripheral tasks such as documentation of the current system because theyare more easily dealt with prescriptively than major design tasks.

• Encouraging BPR practitioners to focus on “compliance” with the methodology, whichcan be achieved with deliverables of a given quality and form, rather than optimising deliverables beyond the level required by the methodology.

In this white paper, both approaches are discussed providing an unbiased view as to whichapproach should be taken when embarking on re-engineering. Furthermore, there aredifficulties associated with assessing the relative value and efficacy of intuitive andmethodological approaches to BPR as most of the reported case studies were of necessityintuitive, because no methodologies existed at the time the projects were done. In fact, theprojects were recognised as BPR only after completion. At the time, they wereconceptualised as something else. Michael Hammer who named re - e n g i n e e r i n g ,recognised that some companies were obtaining extraord i n a ry bre a k - t h roughs inperformance improvement, and he identified the common elements in the “re-engineered”solutions.

A second difficulty exists in assessing the effectiveness of different BPR methodologies. Thisis because every consulting firm can provide references and examples of successful projectsusing their preferred methods. In addition, it is estimated more than half of the firmsengaged in re-engineering projects do so without significant help from re-engineeringconsultants. It is often hard to define how successful some BPR efforts are, because thesought-after improvement goals are usually never quantified. Hence, conclusions are basedon the project manager's understanding and insight into practical BPR and are supportedby a number of arguments.

1.4 A Framework for Implementation

The subsequent sections examine a number of implementation frameworks, focusingprimarily on those proposed by the well-known BPR practitioners, Hammer and Champy(1993) and Davenport (1993). Table 1. highlights the work of these practitioners.

The reasons for focusing on these approaches are twofold. Firstly, they provide contrastingwork that shows the differences between the intuitive and methodological approaches.Secondly, these consultants have been highly commended for their work in the area ofbusiness process re-engineering.

The objective of the discussion and subsequent comparison is to provide the reader with amore complete understanding of practical business re-engineering and ultimately to assessthe role and value of modelling and simulation in a BPR initiative.



Table 1: Two Re-engineering Frameworks

It is possible to identify a common set of steps that are essential in the re-engineeringprocess. These points have been identified through a review of literature covering theimplementation of radical redesign. They are as follows:

• Identify Processes for Redesign• Develop Process Visualisations• Understand the Existing Processes• Redesign New Processes

2.0 Identifying Processes for Redesign

The re-engineering effort must begin with a survey of the process landscape to identifyprocesses that are candidates for redesign. Both the overall listing of processes and thefocus on those requiring immediate redesign initiatives are crucial to the success of the re-engineering effort. The selection process should aim to establish the boundaries of theprocesses that are to be addressed, this enables the enterprise to focus on those most inneed of radical change.

The approach taken by Hammer and Champy suggests that an enterprise uses three criteriato help them choose the processes that they should focus their attention on. They are:Importance, Feasibility, and Dysfunction. Importance expresses how crucial a process is tothe enterprise, i.e. those processes that have the greatest impact on the enterprise'scustomers. Feasibility looks at whether a process can be re-engineered from technological,cultural or other concerns. Dysfunction looks at which processes are in the deepest trouble.



Hammer and Champy primarily focus on dysfunction, listing the common symptoms ofprocesses in distress and their related diseases. Table 2 below summarises this.

Hammer & Champy (1993) Re-engineering the Corporation

Table 2: Common Symptoms of Process Distress

Having identified a common set of dysfunctions within enterprises, Hammer and Champystress that symptoms do not always point organisational physicians to the correctdiagnosis3. Sometimes the symptoms can be seriously misleading because the evidencethat a process is not working exists, but appears somewhere other than the obvious places.So, while data may indicate that something is broken, it may not indicate accurately whichprocess is not working well.

The three criteria outlined above must be used alongside the necessary business judgementto help make the right choices. They also emphasise the relation of the process to thestrategic direction of the company, i.e. does the process have a high impact on customersatisfaction? Hammer and Champy do not provide specific walk-through steps that, whenimplemented, will identify the necessary processes. However, they do provide a set of ideasfor how to tackle the problem, e.g. where to go, which is a primary characteristic of theintuitive approach.

For the purpose of identifying those processes for redesign, Davenport (1993)2 provides amore structured approach, which is slightly different to that of Hammer and Champy’s.Instead of just offering ways of assessing processes, he describes ways in which theprocesses can be scoped and suggests how to actually identify the need in those processes.

His key activities used for identifying processes for redesign are shown in Table 3.

Table 3: Davenport’s Method for Selecting Processes for Redesign

3Hammer, M., Champy, J.,

(1993) “Re-engineering the Corporation: A manifesto forBusiness Revolution”, NicholasBrealey Publishing.

2Davenport, T., (1993), “Process

Innovation: Re-engineeringWork Through InformationTechnology”, Harvard Business School Press.



The first step involves enumerating the major processes within the scope of study. This hasbeen considered a difficult task due to the lack of a widely accepted set of processes, oreven a method for determining the processes. In an enterprise, business planners havedescribed their enterprise as having anything up to 140 or more processes. Davenportrecommends representing the enterprise as having 10-20 processes, which he says is atrade off between managing process interdependence and ensuring that process scope ismanageable. The fewer and broader the processes, the greater the possibility of innovationthrough process integration, and the greater the problems of understanding and changingthe process. Processes can be enumerated using classification schemes described in thewhite paper “The Theory of BPR” where processes, depending on their characteristics, aredivided into core processes, support processes and so on.

Secondly, using Davenport’s framework, one must determine the process boundaries.Similar to enumerating processes, scoping processes is more like an art than a science.Butler Cox7 suggests the use of a task force, or alternatively, a management workshop.Davenport recommends a set of questions as follows:

• When should the process owner’s concern with the process begin and end?

• When should process customer’s involvement begin and end?

• Where do sub-processes begin and end?

• Is the process fully embedded within another process?

• Are the performance benefits likely to result from combining the process with other processes or sub-processes?

Answers to these questions should provide the team with enough information to makevalued judgements as to the process boundaries. Davenport further suggests that processmanagement is best viewed as an iterative activity in which subsequent redesign in oneprocess gives rise to a need to re-innovate, or at least modify others, e.g. redesigning aprocess will effect the boundaries of other processes.

The third step involves assessing the strategic relevance of the processes that have beenidentified and their boundaries determined. This allows the team to target the process inquestion. Davenport identifies four criteria to aid process selection. These are:

• The processes centrality to the execution of the enterprise’s strategy. For instance, if anenterprise business strategy focuses on improving relationships with customers, the order management process would be a probable choice.

• The processes health, i.e. those processes that are consistently problematic.

• The processes qualification, i.e. where the primary goal is to gauge the cultural and political climate of a target process.

• The processes manageability and scope.

7Butler Cox, (1991), “The Role

of Information Technology inTransforming the Business”,Research Report 79.



Davenport writes that enterprises he has studied spent several years travelling the processre-engineering path, in the course of which most changed the number of processes thatthey defined, as well as the boundaries of individual processes and the relative priorities ascandidates for innovation.

The preceding section has principally focused on describing the two high-levelapproaches in terms of selecting processes for redesign. Davenport believes more in astructured approach, while Hammer and Champy take a more “soft” approach, relyingmainly on the team’s insight and wisdom.

3.0 Process Visualisation

Achieving success in a re-engineering project requires a powerful vision of what the futureshould be like. An effective vision is powerful because it can guide and motivate the BPRteam and the enterprise at large. A compelling vision must be clearly defined and theneffectively communicated.

The right BPR vision is difficult to create. It must strike a balance between platitude and alaundry list, between providing too few and too many Goals8. In addition, a vision requiressignificant time, energy, and creative thought.

Process visualisation is implicitly related to the business strategy and the business vision.This is illustrated in Figure 1. which shows exactly how the three aspects are related. Thebusiness vision and business strategy set the process context for the development of theprocess visualisation.

A business vision is a statement of the enterprise’s values and beliefs, its goals, and itsoverall business philosophy. It is essential for providing a high level sense of direction andstatement of principle and acts as a useful input to the process visualisation. However, youcannot use a business vision as a substitute for a process vision because it is too nebulousand imprecise to guide the re-engineering effort. A business vision does not provide thetangible direction that is required to focus, motivate, and inspire in the way that processvisualisation does.

8Barrett, J.L., (1994), “Process

Visualisation, Getting theVision Right is Key”, Information Systems Management.



8

Figure 1: Business Vision, Strategy and Process Visualisation Hierarchy

Business strategy is essentially about understanding an enterprise’s markets, customers andcapabilities; identifying potential market capabilities; identifying potential marketopportunities and then allocating resources to take advantage of these opportunities toimprove the financial performance of the enterprise. The difference between businessstrategy and process visualisation is that the former indicates to the enterprise what it mustdo, while the latter tells how to do those things right. Business strategy is important whendetermining which processes the BPR team should focus upon.

In order for process visualisation to be successful, it must not violate the tenets set forth bythe enterprise’s business vision and it must align with and support the enterprise’s businessstrategy9. Each element business vision, business strategy and process visualisation areinterdependent, yet each must remain separate and distinct.

Davenport believes that in order to create an effective process visualisation the followingsteps should be undertaken. They are illustrated below in Table 4.

Table 4: Davenport’s Method for Process Visualisation

Step 1: Access business strategy for process directionThe first step, assessing existing business strategy, is concerned with the implementation ofstrategy as a means to guide and inspire process redesign. Davenport lists seven criteria thathe believes an enterprise’s strategy should conform to. It should:

9Edwards, C., Peppard, J.W,

(1993), “Business Process Re-design: Hype Hope orHypocrisy”, Journal ofInformation Technology.



• Be at least partially non-financial.• Have components that are measurable.• Focus an enterprise on specific aspects of the business where re-engineering can be

usefully applied.• Be distinctive to an industry and company.• Be inspirational.• Be for the long-term.• Employ a method that broadly focuses and addresses key tools for change.

Satisfying these criteria will increase the enterprise's chances of success in the search forprocess redesign. However, care must be taken not to overemphasise any of theserequirements - strategy provides only an internal perspective in creating a processvisualisation.

Step 2: Consult process customers for process objectivesSecondly, customer inputs into process visualisation facilitates an understanding of thecustomer’s perception of the process. Asking customers what they require of processesserves multiple purposes. In the context of creating visions, the customer perspectivefurnishes both ideas and objectives for process performance. Seeking customer input alsodemonstrates a desire for a close relationship, although this input must be actually factoredinto process designs to fully achieve this objective. Finally, new processes may require thatcustomers change their own behaviour for the process to be fully effective. Seeking inputat an early stage starts building customer commitment to the changes and lets customersbegin their own process transition.

Davenport (1993) suggests that a focus group to facilitate customer contact is the best wayto deal with the individual. He concludes that customer feedback should be iterative,taking place throughout a re-engineering initiative so that customers can react to moreconcrete process designs as they are developed.

Step 3: Benchmark for process performanceDavenport believes that the third step, process benchmarking, is an effective tool fordetermining process objectives and identifying innovative process attributes. It enablescompanies to look outside for alternative ways of designing processes and to break with aninwardly focused mindset. He claims that experience has revealed that the mostappropriate benchmarks are “best practice” or “innovation” and he selects companies onthe basis of the performance of a particular process without regard to the industry.Furthermore, he argues that benchmarking can identify realistic performance objectivesand targets for companies to match or surpass, and this information can be used duringinnovation brainstorming workshops to fuel the redesign process.

However, this is a purely methodological approach. Most people in the intuitive campmaintain that rules of thumb together with general information about what has been donein other companies is more useful than formal benchmarking4. The reason why re-engineers, armed with benchmarking data, are so dangerous is that as soon as the stimulusof re-engineering becomes discrepancies in benchmarking data, all the firms in the industrystart converging to a point of no difference and thus no profit.

4Klien, M.M., (1994), “Re-engineeringMethodologies and Tools: A Prescription for EnhancingSuccess”, Information Systems Management Journal.



The distinction between qualification and differentiation criteria help explain the danger,i.e. qualification criteria are attributes every firm must have to enter a market, whiledifferentiation criteria give a firm an edge.

Step 4: Formulate process performance objectivesThe fourth step in Davenport's approach involves formulating the process objectives. Theprocess objective is a statement that details the overall process goal, the specific type ofimprovement desired, the numeric target for the innovation, and the time frame in whichthe objectives are to be achieved. The process objective is created by questions, posed toboth the vision team and the key stakeholders, such as “what business objective is theprocess supposed to accomplish?” The objectives should be derived from strategy and mustbe quantifiable.

Examples of process objectives are:

• Double customer service satisfaction levels in two years

• Reduce processing costs for customer orders by 60% over three years

Step 5: Develop specific process attributesThe final step in Davenport’s method entails developing process attributes. Processattributes simply constitute a vision of a process operation in a future state. They are highlydescriptive and non-quantitative, they address high-level process characteristics and specificenablers. Process attributes are frequently considered as principles of process operation,behaving as simple statements describing an enterprise’s philosophy and intent, regardingprocess operations and can be an effective means of engaging senior management indiscussions about visions for new processes.

Examples of process attributes are:

• Link order management systems world-wide, but keep them local

• Create automated sales assistant tools for product information and pricing

• Offer direct shipments from manufacturing to customers

The process objectives and attributes described above are usually determined from an arrayof activities, e.g. corporate strategy, overviews of IT and people and so on. This isaccomplished during visioning sessions at the beginning of a specific process initiative.



Figure 2: The Visioning Process

A popular theme within re-engineering projects is to incorporate this visioning process intoa series of workshops. Figure 2. illustrates how these visioning sessions explore increasinglevels of detail about the vision at each step.

The earlier stages of the visioning process are dictated by the creation of objectives andattributes. Once formulated, the workshops address the critical factors for the successfulimplementation of the vision and any barriers that might stand in the way.

Hammer and Champy do not provide a concise definition of their process visualisationtechniques. This stems from their reasoning that re-engineering is contextual and no settechnique can be used all of the time. However, aspects of vision are reflected in theirbeliefs that the re-engineering team should focus on customers to determine what thecustomer’s real requirements are, i.e. what do they say they want and what do they reallyneed, and are the two different? Also, what problems do they have and what processesdo they perform with the output? Since the eventual goal of redesigning a process is tocreate one that better meets customer needs and it is critical that the team trulyunderstands these needs3. In answering these questions and meeting these demands theteam has effectively created their vision; a vision of what the future should be like.

Furthermore, they believe that this should be done not by asking the customers what thoseneeds are, but by understanding the customers' underlying goals and problems. Thisunderstanding cannot be acquired by asking the customers what they want because theywill tend to answer from their own unexpanded mindset.

Hammer and Champy decided that a better way to acquire information about whatcustomers do is to watch them do it. This will give team members an insight as to what isimportant and what is not. From this the team can determine ways in which the processcan better serve the customer. The goal is to understand the "what" and the "why", notthe "how", of the process. Hence, an effective process visualisation will result.

3Hammer, M., Champy, J.,(1993) “Re-engineering theCorporation: A manifesto forBusiness Revolution”, NicholasBrealey Publishing.



They also consider the use of process benchmarking as a means for looking at companiesthat are doing something well and learning how to do it in order to emulate them.However, they also point out that benchmarking can restrict the re-engineering team’sthinking to what is already being done in its own industry sector. If the team is going tobenchmark, it should do so from the best in the world, not just the best in its industry.

Barrett (1994)8 also provides a method for developing a process visualisation. The approachembraces the concepts described above and stresses the following:

• Maximising the collective creativity of the BPR team.

• Reaching a point where team members enthusiastically embrace their concept of the future and then actively campaign on its behalf to the rest of the enterprise.

• Establishing a learning laboratory to test and refine the team's proposed process visualisation in a controlled environment.

He divides the development methodology into a number of stages. Firstly, the incubationstage is where BPR teams work through a structured set of knowledge-building activitiesprior to embarking on process visualisation. This enables the team to achieve an effectiveprocess visualisation. The right people must be selected - i.e. those possessing suitablequalities - and the team should examine the business process targeted for re-engineeringas it currently operates. The objective here is to identify the key leverage points of theprocess and then focus on these for significant performance improvement. In addition tothe points highlighted above, BPR teams should analyse various examples of best practicefor the particular business process.

Secondly, the targeted brainstorming phase is when the BPR team actually construct, overtime, the process visualisation by creating both the narrative description and the graphicaldepiction of the future process. This is done through a series of targeted brainstormingsessions. Note that the narrative simply contains explanations as to why we must changeand what we must do. Barrett outlines a number of techniques to facilitate the kind ofbreakthrough thinking that successful process visualisation requires. They include the year2010 approach, where the BPR team visualises what the targeted process will be like in theyear 2010 and the ideal service approach, where the BPR team describe what would bedifferent if customers were thought of as partners.

The final phase is when the team has a sense of having accomplished a resounding victory.This is known, according to Barrett, as the “eureka” phase. Here all the preparation andwork of the previous two phases comes together to form a process visualisation that theteam deeply believes in.

8Barrett, J.L., (1994), “ProcessVisualisation, Getting the Vision Right is Key”,Information SystemsManagement.



4.0 Understanding Existing Processes

In the re-engineering effort there is disagreement surrounding the role of the existingprocess. For instance, Hammer and Champy claim that the process should be understood,but not in any great detail. Whereas, Davenport argues that time must be taken tounderstand and document the existing process. Before discussing the reasons for thedifference, it is necessary to discuss each of the practitioners' views in detail.

Hammer and Champy believe that before a re-engineering team can proceed to redesign,it must know something about the existing process, i.e. what it does, how well it performsand the critical issues that govern its performance. The level of understanding is the crucialpoint here. They believe that because the team’s goal is not to improve the existing process,it does not need to analyse and document the process to expose all of its details. Theirobservations suggest that the most frequently committed errors in re-engineering is thatthe re-engineering team try to analyse a process in agonising detail rather than attempt tojust understand it. Rather, the team members require a high-level view that is just enoughto generate the intuition and insight necessary to create a totally new and superior design.

Although Hammer and Champy stress that detailed process analysis of a conventional sortis useful to help persuade others in the enterprise that re-engineering is necessary, the taskis part of change management and re-engineering teams need to look for knowledge andinsight. They say that the best place for the team to start to understand an existing processis usually at the customer end. This is because the eventual goal of redesigning a processis to create a new one that better meets customer needs. Once the team establishes whatprocess the customer might need the next step is to figure out what the current processprovides.

Davenport’s studies contrast with this approach. He argues that not taking the time tounderstand an existing process leaves the re-engineering team unable to establish thebenefit of adopting the new process. He lists four reasons why it is important to documentexisting processes before proceeding with redesign.

• Understanding existing processes facilitates communication among participants in there-engineering initiative. Models and documentation of the current state allow for a common understanding between the team.

• Documentation provides the means to migrate to a new process. It is an essential inputto migration and implementation planning. It is useful for understanding the magnitude of anticipated change and the tasks required to move from the current process to a new process.

• Recognising problems in an existing process can help ensure that they are not repeatedin the new process.

• Understanding of the current process provides a measure of the value of the proposedredesign.



Davenport’s analysis on existing processes goes as far as to produce a list of key activities inunderstanding and improving existing processes. This is illustrated below in Table 5.

Table 5: Davenport’s Method for Understanding the Existing Process

The first step involves documenting the current process flow. He believes that describingthe process is central to the purpose of process communication and increases the likelihoodof process participants adopting a revolutionary process. The current process is then usedas a baseline comparison with the new process and thus should be assessed in terms of thesame criteria employed for the new design. The scope of the existing process should be thesame as that envisioned for the new process. Furthermore, the current process should bemeasured on the specific performance objectives and assessed for the relative levels ofprocess attributes as identified in the process vision. This narrowing of the assessment taskhelps reduce the time and effort required for the current process analysis. For example, ifthe visioning activities for a new process yield cycle-time reduction and output qualityimprovement as objectives, then these criteria should be the focus of current processmeasurement activities. If the process attributes in the new vision involve a single level ofapproval for customer transactions, the number of approvals required in the current processshould be known.

Edwards and Peppard (1993)9 believe that undertaking BPR demands an understanding notonly of the purpose of the process under review but also an understanding of the purposesand methods of each of the processes at higher levels of granularity. For example, toredesign a process within a function demands an understanding of that function, as wellas of the enterprise as a whole, the industry within which the enterprise competes, andsociety in general. They argue that to redesign a process without reference to these higherlevels of granularity can result in suboptimality9.

Davenport further believes that improving the existing processes is a natural follow-on todocumenting them. The documentation usually reveals long-standing problems such asbottlenecks, redundancies and unnecessary activities that have gone unrecognised. Manycompanies engaged in re-engineering are actually coupling short-term improvement andbreakthrough innovation, using the documented information. This has been classified as a“systematic approach” to re-engineering where perf o rmance improvements areimplemented in the short term, while re-engineering work proceeds in the medium andlong term.

9Edwards, C., Peppard, J.W,

(1993), “Business Process Re-design: Hype Hope orHypocrisy”, Journal of Information Technology.



Davenport summarises the traditional approaches to process improvement, Table 6 showsthe difference between traditional approaches and radical redesign and shows why noneof the techniques are capable of achieving radical improvement. Secondly, it identifies toolsand techniques that are applicable and useful in the process improvement stage of the re-engineering initiative.

Davenport (1993) Process Innovation: Re-engineering Work Through Information Technology

Table 6: Process Methods Overview 2

There are two major differences in the approach offered by Davenport and Hammer andChampy. The first difference is the stage at which understanding occurs. Hammer andChampy believe that this understanding of what the process represents should come beforeprocess visualisations are created. Hence, their reasons for believing that exposing all of theprocesses details will affect the design of the new process. However, Davenport argues thatthe existing process should be examined and documented following process visualisations.

Secondly, Davenport believes that process improvements in the short-term should precedere-engineering work in the medium and long term. However, Hammer and Champy believein making radical changes and that the new process should have no basis in the old.

5.0 Redesigning New Processes

The design phase largely revolves around a group of creative people that review theinformation collected in earlier phases of the initiative and synthesise it into a new process.There are many techniques for facilitating the review process, but the success or failure ofthe effort will be determined by the particular people who are gathered together. Anumber of these techniques are discussed in this section.

Davenport states that key process stakeholders usually want to feel that their interests arerepresented during this stage. This is in addition to the views of the main participants ofprocess identification and the visioning phases. The stakeholders that should be includedin the discussion are usually heads of key functions intersected by the process, key generalmanagers with operational responsibility for the process, suppliers and process customers,both internal and external.

2Davenport, T., (1993), “Process Innovation: Re-engineering Work ThroughInformation Technology”, Harvard Business School Press.



Davenport’s rendition of the redesign session is much more detailed than that of Hammerand Champy’s. Davenport’s analysis extends to discussing a migration strategy andimplementing new organisational structures and systems. Hammer and Champy specificallydiscuss only re-designing the process. Furthermore, Hammer and Champy provide a set ofdetailed examples which includes a great deal of information on how processes areredesigned and implemented. However, in this section we shall limit the discussion to theredesign session because other areas such as the new organisational structures are coveredin part one of this series of white papers “The Theory of Business Process Re-engineering".

Davenport (Table 7) lists his key activities in designing and prototyping a new process.

Table 7: Davenport’s Method for Redesigning the New Process

The first stage is to brainstorm the design alternatives. Design innovation is bestaccomplished in a series of workshops, and brainstorming is an effective means of surfacingcreative process designs. Brainstorming is any group facilitation technique or practice thatencourages participation from all group members, regardless of their roles and relationshipswithin the enterprise. Emphasis should be placed on creativity and idea generation and anon-judgmental atmosphere is essential. Davenport stresses that the objective of thissession is to develop creative but pragmatic new process designs, taking as input the earlierstages of his re-engineering approach.

Davenport emphasises that it is often useful to define the new process in an iterativefashion, with greater detail at each successive level. Table 8 below illustrates this.

Table 8: Level of Process Design



To begin with a high-level flow of the overall process should be created. At the next levelof detail, each sub-process can be described with roughly the same thoroughness as wasused in describing the general process in the first iteration. Finally, each major activityshould be described in terms of such factors as who performs it, the information neededto carry it out and so forth.

Davenport believes the next stage is to submit all of the design alternatives to feasibilityanalysis to evaluate their relative benefits, costs, risks and time frames. The new designmust be compared in terms of structure, technology and organisation to fully understandthe implications of each alternative.

Furthermore, Davenport believes that following the selection of the preferred redesignedprocess, a prototype to simulate and test its operation should be set up. This is an iterativestage in which the fit between new process, structure, information technology andorganisation is refined.

Hammer and Champy's approach to this brainstorming session is slightly different toDavenport’s. They propose a number of techniques for redesigning a specific process.Questions such as “imagine only a single person were available to perform all the tasksinvolved in building a product” how would they be likely to do it? What help would thatsingle worker need. How could technology lend a hand? Following through on answersto these questions can get the redesign session moving.

Another technique that is used by Hammer and Champy is that of identifying andannihilating assumptions. This technique was found to be useful in stimulating the re-engineering team's thinking and works on the basis that assumptions are deeply heldbeliefs that are built into almost every existing business process. An example of this is thatfield salespeople are not allowed to set the terms of a sale. This is because of theassumption that salespeople may put their own financial interests ahead of the company’sin order to earn commission. A re-engineering team should attempt to turn theseassumptions on their heads or, alternatively, throw them away and then see where thatleaves the process they are redesigning.

The final technique used by Hammer and Champy for stimulating creativity is to harnessthe disruptive power of Information Te c h n o l o g y. Conventional business pro c e s s e ssometimes reflect the limitations inherent in the pre-computer era because they weredesigned on that basis. If we try to improve these processes we will still be constrained bythe same limitations. The re-engineering teams can break out of this bind by starting withthe capabilities of modern Information Technology. Assess what it allows to be done andthen determine if it helps you to redesign the process.

Cougar et al (1994)10, suggest an approach to enhance the creativity of re-engineering,which in turn, observations suggest, will help generate cost effective ideas. They proposeda two-pronged approach:

• Improvement of the environment for creativity and innovation• Training in specific techniques for creativity generation and evaluation

10Cougar, J.D., Flynn, P. Hellyer,

D., (1994) “ Enhancing TheCreativity of Re-engineering:Techniques for Making IS MoreCreative”, InformationSystems Management.



They extend their analysis specifying that the program should consist of two phasesevolving specific activities. Phase one comprises and teaches a number of creativity,evaluation and implementation techniques. The workshop should contain both analyticaland intuitive creative generation and evaluation techniques, for example;analogies/metaphors and problem reversal. Participants should be involved in exercisesusing each of the techniques taught, in order for them to become familiar with their useand how to apply them to Information Systems Design.

In phase two there is reinforcement of the concepts and principles learnt in the workshop.This is done through monthly meetings for each department where the team can discusstheir experiences in the application of the techniques and test the degree to which theenvironment for creativity has been enhanced. Reinforcement can be facilitated by use ofstaff meetings where employees are asked to identify specific results of their creativeactivity.

The techniques outlined above have proven to enhance the climate for creativity in asystems development group in creating cost-effective ideas. Furthermore, employees thathave participated in creativity workshops stated that the program:

• Helped them to surface their creativity.

• Helped them to share ideas and be more open.

• Encouraged them to consider other approaches, not just continue to use established methods.

• Helped them develop intuitive approaches and not rely only on the analytical.

• Improved group interaction, developed rapport.

• Helped integrate creativity as part of the daily job

For re-engineering to succeed it must be creative. The above techniques offer the means.

The discussion above has attempted to review some of the techniques that can be used toenhance the generation of ideas from members of a re-engineering team. Once the teamhas determined process visions and understood existing processes to an appropriate levelof detail they can then create a redesigned process that achieves the defined objectives.

6.0 The Structure of Re-engineering Teams

Business re-engineering is typically tackled with work teams from across the enterprise. Theteam usually consists of a leader and representatives from the business units involved,Information Systems, Quality Assurance, Human Resources and other key departments.The leader usually is the “owner” of the process being addressed.



In general, the particular personnel who are chosen and the amount of authority they aregiven are critical factors in success of the re-engineering project. Furthermore, the re-engineering “core” team must start small and remain small. Therefore, a prudent approachis to find as few people with as many of the requisite cross-functional skills as you can. Fiveto seven people should comprise the core team; teams in excess of ten should be avoidedbecause ten people rarely agree on anything.

Because the re-engineering team must be cross-functional, a balance of outsiders andinsiders must be selected as full-time, dedicated team members. Outsiders are people whohave not been involved with the enterprise, while insiders are people who have had recentexperience as a member of the enterprise. The core team members must be complementedby two other individuals: a public relations person and a champion.

We should note that in addition to their skills, the way that the team members areperceived is important. How the affected enterprise will view each member of the team isa factor in team selection. The goal should be to select team members who have requisiteskills and will be able to gain acceptance from others in the current environment.

Because re-engineering projects are usually high-profile endeavours, the team members willbe judged constantly by the people within the enterprise. Therefore, the selection of teammembers must be done so as to avoid negative personal perceptions. The insiders must beindividuals respected by most people at all levels of the enterprise from which they came.

6.1 The Re-engineers

Re-engineers will be management level people, but they must not be responsible formanaging people during the re-engineering project. They need the time and the freedomto analyse and diagnose problems. Furthermore, an understanding of technology isparamount. Here the people must be technically competent. The more experience theyhave in information system integration, the better.

The skills described above can be classified as “hard”. These must be complemented by awide array of “soft” skills. For instance the re-engineer must be able to go to the factoryfloor and relate to the workers and then must be able to go to the boardroom and presentthe team’s findings in a way that the senior managers can understand. Moreover, these re-engineers must be “thick skinned” in order to defend their ideas and conclusions and behighly self-motivated.

Some of the re-engineers can be external consultants. Because the re-engineering disciplineis relatively new to many enterprises, augmenting the team with consultants will help tospeed things along and provide the needed experience.



6.2 The Insiders

At least thirty per cent of the re-engineering team should comprise of employees who haverecently worked in the current environment. In dealing with the potential problems theremay be no quicker way to gain credibility than to have highly respected members of thecurrent enterprise involved in the effort.

6.3 The Champion

Within the context of leadership, a “champion” may be the most important “cog” in there-engineering team. This person will have the same traits as the re-engineer, i.e. drive,motivation, good interpersonal skills and so on. The champion is responsible for leadingthe re-engineering team, fighting political battles, removing obstacles and gatheringsupport from all levels of management.

6.4 The Public Relations Person

To complement the core team members it is necessary to have a PR person on the re-engineering team. This person should be dedicated to spreading a positive message aboutre-engineering and the benefits of the program in particular. The PR person must work tocreate positive associations with the project in people’s minds.

7.0 Conclusion

The white paper on “The Theory of Business Process Re-engineering” described thefundamental transformation that BPR produces, in terms of the enterprise's structure,processes, technology and people. This white paper on “Implementing Business ProcessRe-engineering” has focused on the practices that perform change, highlighting twoapproaches to business process re-engineering that currently exist.

Firstly, arguments surrounding the adoption of methodology in re-engineering were stated.For example, a methodology introduces a minimum set of disciplines into a task, but stiflescreativity, which is central to radical redesign. However, there is some debate about whatconstitutes a methodology. Strictly speaking, both practitioners propose a methodology,but one is more flexible than the other. In the view of the author, an Implementing methodis required to provide the re-engineering team with guidance in their increasingly difficulttask. Rather than revolve around tightly defined tasks, such as those prescribed byDavenport, tasks should be loosely defined (the “soft” approach). This facilitates creativityamongst the team; in other words, it is a more intuitive approach. Still, one must not losesight of the fact that both methods have proved extremely successful in their areas ofapplication.



The steps taken should fit into those described in this white paper. Firstly, processes forredesign must be selected. The approaches described to facilitate this stage areconceptually the same, where processes that are consistently problematic are paid mostattention. Also, these processes are assessed on their strategic relevance, or importanceand then reviewed to determine feasibility in terms of culture etc.

The second and third steps involve developing process visualisations and understandingexisting processes. This is the point at which the two approaches differ the most. The maindistinction between the two approaches is that the intuitives believe the process needs onlyto be understood on a high level of detail, from which effective visions can be drawn. Theybelieve the existing process should not be analysed in any great detail, since the newprocess should have no basis on the old. However, the methodologists believe that theexisting system should be well documented following the development of visions.Moreover, they argue the existing system should be improved in the short-term while re-engineering work continues in the medium and long-term.

The final step of a re-engineering initiative before the new process is implemented is theredesign session. As the two approaches indicate, this is usually accomplished throughintensive brainstorming sessions, applying a number of creativity techniques.

Finally, it is worth mentioning that it is extremely difficult to undertake radical redesign. Theapproaches that do exist all claim considerable success. However their ability to discusstheir successes is followed by a reluctance to discuss failures. This makes assessment of thevalue of these approaches extremely difficult.

In practice, the way re-engineering is conducted varies between the enterprises to which itis applied. One must view these approaches only as a guide to a re-engineering project.No two situations are identical.



NOTE: INSIDE BACKCOVER IS BLANK

Strategy Planning Activity Based Costing (ABC) Business Contingency Planning S A PChange Management BPR ISO9000 Business Process ImprovementWorkflow Implementation ERP EFQM Financial Modelling TQM System IntegrationActivity Based Costing (ABC) Business Contingency Planning ERP Strategy PlanningBusiness Process Improvement ISO9000 Change Management BPRSAP E F Q M Financial Modelling TQM System Integration Workflow ImplementationStrategy Planning Activity Based Costing (ABC) Business Contingency Planning S A PChange Management BPR ISO9000 Business Process ImprovementWorkflow Implementation ERP EFQM Financial Modelling TQM System IntegrationActivity Based Costing (ABC) Business Contingency Planning ERP Strategy PlanningBusiness Process Improvement ISO9000 Change Management BPRSAP E F Q M Financial Modelling TQM System Integration Workflow Implementation Strategy Planning Activity Based Costing (ABC) Business Contingency Planning S A PChange Management BPR ISO9000 Business Process ImprovementWorkflow Implementation ERP EFQM Financial Modelling TQM System IntegrationActivity Based Costing (ABC) Business Contingency Planning ERP Strategy PlanningBusiness Process Improvement ISO9000 Change Management BPRSAP E F Q M Financial Modelling TQM System Integration Workflow Implementation Strategy Planning Activity Based Costing (ABC) Business Contingency Planning S A PChange Management BPR ISO9000 Business Process ImprovementWorkflow Implementation ERP EFQM Financial Modelling TQM System IntegrationActivity Based Costing (ABC) Business Contingency Planning ERP Strategy PlanningBusiness Process Improvement ISO9000 Change Management BPRSAP E F Q M Financial Modelling TQM System Integration Workflow ImplementationStrategy Planning Activity Based Costing (ABC) Business Contingency Planning S A PChange Management BPR ISO9000 Business Process ImprovementWorkflow Implementation ERP EFQM Financial Modelling TQM System IntegrationActivity Based Costing (ABC) Business Contingency Planning ERP Strategy PlanningBusiness Process Improvement ISO9000 Change Management BPRSAP E F Q M Financial Modelling TQM System Integration Workflow Implementation Strategy Planning Activity Based Costing (ABC) Business Contingency Planning S A PChange Management BPR ISO9000 Business Process ImprovementWorkflow Implementation ERP EFQM Financial Modelling TQM System IntegrationActivity Based Costing (ABC) Business Contingency Planning ERP Strategy PlanningBusiness Process Improvement ISO9000 Change Management BPRSAP E F Q M Financial Modelling TQM System Integration Workflow ImplementationStrategy Planning Activity Based Costing (ABC) Business Contingency Planning S A PChange Management BPR ISO9000 Business Process Improvement

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