Bpr

Business Process Reengineering and Information Technology

Objectives The impact of IT The reengineering of work IT and Business Process Redesign

The role of information technology

Information technology (IT) has historically played an important role in the reengineering concept.[10] It is considered by some as a major enabler for new forms of working and collaborating within an organization and across organizational borders[

Early BPR literature [11] identified several so called disruptive technologies that were supposed to challenge traditional wisdom about how work should be performed.

Shared databases, making information available at many places Expert systems, allowing generalists to perform specialist tasks Telecommunication networks, allowing organizations to be centralized and

decentralized at the same time Decision-support tools, allowing decision-making to be a part of everybody's

job Wireless data communication and portable computers, allowing field

personnel to work office independent Interactive videodisk, to get in immediate contact with potential buyers Automatic identification and tracking, allowing things to tell where they are,

instead of requiring to be found High performance computing, allowing on-the-fly planning and revisioning

Business process reengineering (BPR) is the analysis and redesign of workflow within and between enterp

Organize around outcomes, not tasks.2. Identify all the processes in an organization and prioritize them in order of redesign urgency.3. Integrate information processing work into the real work that produces the information.4. Treat geographically dispersed resources as though they were centralized.5. Link parallel activities in the workflow instead of just integrating their results.6. Put the decision point where the work is performed, and build control into the process.7. Capture information once and at the source.rises. 

Business process re-engineering is a business management strategy, originally pioneered in the early 1990s, focusing on the analysis and design of workflows and processes within an organization. BPR aimed to help organizations fundamentally rethink how they do their work in order to dramatically improve customer service, cut operational costs, and become world-class competitors.[1] In the mid-1990s, as many as 60% of the Fortune 500 companies claimed to either have initiated reengineering efforts, or to have plans to do so.

Business process re-engineering is also known as business process redesign, business transformation, or business process change management.

The Impact of IT To improve efficiency To improve effectiveness To facilitate transformation

The Impact of IT On individual

Efficiency Task mechanization

Word processingSpreadsheet

Effectiveness Work improvement

Using database to generate sales letters

Transformation Role expansion Doing what if analysis for investment client

The Impact of IT On individual

Efficiency Task mechanization

Word processingSpreadsheet

Effectiveness Work improvement

Using database to generate sales letters

Transformation Role expansion Doing what if analysis for investment client

The Impact of IT On functional unit

Efficiency Process automation

Order entry, credit checking

Effectiveness Functional enhancement

CAD, CAM

Transformation Functional redefinition

CD ROM disks for business research

The Impact of IT On the organization

Efficiency Boundary extension

Linking customers and suppliers

Effectiveness Service enhancement

Online diagnostics databases

Transformation Product innovation

videoconferencing

Reengineering of Work

Historically, organizations have become hierarchies of complex functions over time. The division of labor Command and control structure Nature of post-world war II market

What has changed?? BPR changes processes not functions , geographies,

department or tasks. It is not reorganizing or downsizing.

Reengineering of Work Customers have power over suppliers Competition has changed Technology

REASONS FOR RE-ENGINEERING :-. High demand , efficiency and control.Innovation , speed , service & quality.

Wal- Mart lets Proctar & Gamble know how much stock it moves from its distribution centers into its stores.

P&G inturn tells Wal-Mart how much it needs to order

P&G can anticipate the demand and schedule its production

Wal-Mart offloads its inventory mgmt. to vendor and receive inventory into its stores even before it pays P&G

Reengineering of Work (examples) Wal-Mart’s inventory management process

Reengineering of Work (examples) Ford’s accounts payable system

Traditional process Multiple deptts.

Reengineered process We pay when we rec.

the goodspurchasing

receiving

Accounts payable

vendor

Purchase order

Copy of

Purchase order

Rec.

doc

.

invoice

purchasing

Database

receiving

vendor

Purchase order

Acc. payable

paym

ent

goods

Technology is an important part of the new process. The shared purchasing/ rec./accounts

payable database integrates the three functions to accomplish the overall business process, order procurement, successfully

Reengineering of Work (examples) Ford’s accounts payable system

Organize around outcomes and not around tasks Assigning a person or a team to

accomplish a task, rather than using assembly line approach

Have those who use the output of the process actually perform the process

Reengineering Principles

Have those who use the output of the process actually perform the process Why does a marketing manager have

to be a customer of the purchasing deptt?

Reengineering Principles

Treat geographically dispersed units as if they are centralized Greatest inefficiencies occur because

decentralized divisions maintain their own information systems

Reengineering Principles

Link parallel activities during the process rather than at the end

Capture information once at the source At mutual benefit life, the same

information was entered into as many as five different databases. When the process was reengineered, integrated databases were designed.

Reengineering Principles

Sponsor Sees the big picture Provides the resources

Steering committee Oversees the reengineering project

Design teams Knowledgeable operating managers, creative

Champion Middle manager with leadership roleDirect line to sponsor

Implementation team Focuses on implementationOpen to change, motivate others

Roles in Business Reengineering

Steps in Business Process Redesign (case Mutual Benefit Life) Develop business vision and process

objectives To reduce time and cost of underwriting an

insurance policy in order to provide timely and competitive service to its customers

Identify processes to be redesigned Underwriting an insurance policy. The current

process involves 40 steps, more than 100 people, 12 functional areas and 80 separate jobs

Steps in Business Process Redesign (case Mutual Benefit Life) Understand and measure existing

processes Management established a goal of improving

productivity by 40 percent Identify IT levers

Created a new role, the case manager, to perform and coordinate all underwriting tasks centrally. This decision making process was made possible by work station based computer system capable of pulling data from all over the company to support under writing decisions

Steps in Business Process Redesign (case Mutual Benefit Life) Design and build a prototype of the process

In the prototyping process the company made some organizational changes. After a brief start up period, the firm learned that some underwriting cases needed two additional roles: specialists like lawyers and clerical assistance.

With the new roles and redesigned processes, senior managers believed the firm will reach the 40% productivity improvement goal

Management challenges in Business Process Redesign

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THANK YOU!!

Reference Book: MIS by Mary Summer and Robert