Bpr 01 Introduction

Business Process Re-engineering01 – History & Introduction

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BPR - Evolution

• Organisations aim to increase productivity & quality service and to reduce cost

• Traditional organisation structure, customer services and business methods are out-dated

• Low barriers to entry, hence stiffer competition - locally & globally

• Current business are:– customer-focused and market driven – process-focused and team-oriented– Focused on speed & response time– focused on customer relationships

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• Business concepts of 1990• Rework of TQM, continuous improvement• Survey results shows that BPR was unsuccessful• BPR leaders - James Champy; Thomas Davenport • Deming and Juran discussed about BPR in TQM reports• BPR was introduced in 70’s to the manufacturing

environment

BPR - Origins

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Business Process

Davenport & Short’s definition

”a set of logically related tasks performed to achieve a defined business outcome . A structured, measured set of activities designed to produce a specified output for a particular customer or market. It implies a strong emphasis on how work is done within an organization”

- Davenport & Short, 1990

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Business Process

Generic Definition

“ a set of activities that transform a set of inputs into a set of outputs (goods or services) for another person or process using people and tools”

• “ a collection of business activities that creates value for the customer”

Inputs

Supplier Process CustomerOutputs

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Business Process

What are Business processes?• sequences and combinations of business activities. • management processes control and coordinate these

activities and ensure that business objectives are delivered.

• support processes, the name implies, provide infrastructural and other assistance to business processes.

Business Processes can be further differentiated into knowledge-based and operational processes.

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What are Knowledge-based processes?

• Product development, research activities, advertisement, and management consulting.

• These processes typically are of non-standard nature• They rely on the knowledge and creativity of the persons

involved.

Knowledge-based processes are not dominant in Business Reengineering projects.

- Davenport; Jarvenpaa; Beers, 1996

Knowledge-based Processes

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Operational Processes

What are Operational processes ?

• Customer service, procurement, and manufacturing. They are at the heart of most Business Reengineering efforts.

• They are classified by their relative stability, standardisation and repeatability.

Operational processes are further classified into key andsecondary processes. Key processes directly support themission and the strategies of the company.

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Business Process Components

• They have people / customers (internal or external)• They have information and decision made • They have channels to transmit information • They cross organizational boundaries, i.e., they occur

across or between organizational sub-units

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• Generic Customer– Marketing & Sales– Product/Service Development– Manufacturing– Distribution– Billing– Order Processing– Customer Service

Business Process Examples

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• Industry-specific Customer– Loan processing (Banking)– Claims (Insurance)– Grant allocation (Government)– Merchandise return (Retail)– Food order & preparation (Restaurant)– Baggage handling (Airlines)– Reservations (Airlines)

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• Generic Administration – Budgeting– Training– Human Resource– Facilities Management / Maintenance– Purchasing– IT– Finance / Accounts

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Objectives• Process Streamlining• Flexibility & Responsiveness• Global competitiveness• Corporate rightsizing

Drivers• Competition is Intense• Globalisation has become a norm• Change has become constant• Customers have become powerful

Objectives & Drivers of BPR

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Forces reshaping businesses

Previous Now

• Competition : Local/regional National/Global

• Markets: Mass Focused

• Operations: Controlled Flexible

• Focus: Performance Best service

• Performance: Short term Sustained

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• All things to all people?• Documenting procedures and processes to ISO

standards?• Systems implementation?• IS strategy deployment?

What is BPR ?

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Business Process Re-engineering

Business Process Re-engineering is :

“ the fundamental rethinking and radical design of entire business processes enabled by information technology to achieve dramatic improvements in business performance “

- Hammer & Champy

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Business Process Re-design is :

“ the analysis and design of workflows and processes within and between organizations “

Business Process Re-design

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Fundamental Rethinking

• Why do we do what we do?• Why do we do it the way we do? • Re-engineering first determines what a company must

do, then how to do it • It takes nothing for granted • It ignores what is and concentrates on what should be

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• It means getting to the root of things• It means starting all over again and isn’t about fixing

things• It is low in cost with problem at the design stage rather

than at the execution stage• It means enabling new or existing processes using IT

Radical Redesign

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• BPR is an integrated program of change which has a major impact on an organization for several reasons:– Sponsored by senior management– Driven from the top down. Begins and ends with

customer value– Applies to multiple business functions, departments

and locations– Involves cultural, organizational and role changes that

must be managed– Radical improvements will take place

BPR & Change

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BPR – Challenging current practices

BPR: Challenge current practices

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Analyse process.Fix if broken Automate process

Outdated processes reinforced - no radical

improvement

Understandcurrent situation and

future vision ofthe enterprise

Invent new ways of working & designnew process. Use IT

to enable change

Conventional: Automate existing process

Clearly definedprocesses integrated

to meet customer needs and add value

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