Bpr 02 Principles

Business Process Re-engineering02 – Principles & Dimensions

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Dimensions & Characteristics

Fundamental changes to process, technology andhuman factors to achieve dramatic improvementsin key measures

The dimensions & characteristics:

• Balanced attention to processes, people andtechnology

• 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

Business Processes

Values and Beliefs

Management andMeasurement

Systems

Jobs and Structure

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The business operation diamond

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The Impact of BPRThe business operation diamond in context

Business Processes

Values and Beliefs

Management andMeasurement

Systems

Jobs and Structure INFRASTRUCTURE

Customer needs

Competitor actions Technological and environmental factors

Assessment ofcapabilities

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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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• The objective is to address competitiveness and market-dominance

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

Radical Change

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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

Best practices - the foundation for success

Change and risk management

Competitiveness

BPR

Process focus Radical change Dramatic improvement

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

Why re-engineer ?

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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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• 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

Reasons to improve processes

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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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• 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

BPR is different

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• 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

Typical benefits BPR produces

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• 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

Value-chain analysis

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Value-chain analysis

PROFIT

PROFIT

Firm Infrastructure

Human Resource Management

Technological Development

Procurement

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Human Resource Management

TechnologicalDevelopment

Procurement

Inbound Logistics

Operations Outbound LogisticsMarketing & Sales

Service

FinancialPolicy

Accounting RegulatoryCompliance

Legal CommunityAffairs

Flight/ Route andYield Analysis

Training

Pilot TrainingPilot Safety

Baggage Handling Training

Agent Training InflightTraining

Computer Reservation System/ Inflight System/ FlightScheduling System/ Yield Management System

Product DevelopmentMarket Research

Baggage Tracking System

Information Technology Communications

• Route selection• Passenger service system• Yield management system (pricing)• Fuel• Flight scheduling • Crew scheduling• Facilities planning• Aircraft acquisition

• Ticket counter operations• Gate operations• Aircraft operations• Onboard services• Baggage handling• Ticket office

• Baggage system• Flight connections• Rental car and Hotel reservation system

• Promotion• Advertising• Advantage programmes• Travel agent programmes• Group sales

• Lost baggage services• Complaint follow - up

Value-chain analysis