Business Process Reengineering Presentation Outline General Introduction Business Process Reengineering BPR Symbols Understand and be able to implement a BPR Strategy Understand the main challenges in implementing a BPR Strategy Conclusion: Summary Spectrum of Change Automation Rationalization of procedures Reengineering Paradigm shift Automation refers to computerizing processes to speed up the existing tasks. improves efficiency and effectiveness. Rationalization of Procedures refers to streamlining of standard operating procedures, eliminating obvious bottlenecks, so that automation makes operating procedures more efficient. improves efficiency and effectiveness. Business Process Reengineering refers to radical redesign of business processes. Aims at eliminating repetitive, paper-intensive, bureaucratic tasks reducing costs significantly improving product/service quality. Paradigm Shift refers to a more radical form of change where the nature of business and the nature of the organization is questioned. improves strategic standing of the organization. 3 Business Process Reengineering Reengineering is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance such as cost, quality, service, and speed. 4 Key Words Fundamental Why do we do what we do? Ignore what is and concentrate on what should be. Radical Business reinvention vs. business improvement 5 Key Words Dramatic Reengineering should be brought in when a need exits for heavy blasting. Companies in deep trouble. Companies that see trouble coming. Companies that are in peak condition. Business Process a collection of activities that takes one or more kinds of inputs and creates an output that is of value to a customer. BPR & The Organization BPR is Not? BPR may sometimes be mistaken for the following five tools: 1. Automation is an automatic, as opposed to human, operation or control of a process, equipment or a system; or the techniques and equipment used to achieve this. Automation is most often applied to computer (or at least electronic) control of a manufacturing process. 2. Downsizing is the reduction of expenditures in order to become financial stable. Those expenditures could include but are not limited to: the total number of employees at a company, retirements, or spin-off companies. BPR is Not? 3. Outsourcing involves paying another company to provide the services a company might otherwise have employed its own staff to perform. Outsourcing is readily seen in the software development sector. 4. Continuous improvement emphasizes small and measurable refinements to an organization's current processes and systems. Continuous improvements origins were derived from total quality management (TQM) and Six Sigma. 16 Reengineering & Continuous Improvement--Similarities ReengineeringContinuous Improvement Similarities Basis of analysisProcess Performance measurementRigorous Organizational changeSignificant Behavioral changeSignificant Time investmentSubstantial 17 Reengineering & Continuous Improvement--Differences ReengineeringContinuous Improvement Differences Level of changeRadicalIncremental Starting pointClean slateExisting process ParticipationTop-downBottom-up Typical scopeBroad, cross-functionalNarrow, within functions RiskHighModerate Primary enablerInformation technologyStatistical control Type of changeCultural and structuralCultural What is a Process? A specific ordering of work activities across time and space, with a beginning, an end, and clearly identified inputs and outputs: a structure for action. What is a Business Process? A group of logically related tasks that use the firm's resources to provide customer- oriented results in support of the organization's objectives Why Reengineer? Customers Demanding Sophistication Changing Needs Competition Local Global Change is the only constant Quote; No matter how hard individuals work, they cannot overcome a flawed process design, much less the burden of no design at all. MICHAEL HAMMER Key Characteristics Systems Philosophy Global Perspective on Business Processes Radical Improvement Integrated Change People Centered Focus on End-Customers Process-Based Customer Demands expect us to know everything to make the right decisions to do it right now to do it with less resources to make no mistakes expect to be fully informed Why Reengineer? Competition Local Global Change Technology Customer Preferences Business Process Reengineering WHY ? Integrate people, technology, & organizational culture To Respond to rapidly changing technical & business environment and customers needs to achieve Big performance gains Finding a BPR Compelling Need The most difficult thing for a company to do is to find a compelling need during good times. It was easy for Xerox to see the compelling need when its core photocopying business being taken over by competitors from across the world, or for Ford Motor Corporation to see the compelling need when its cars sales started dropping due to poor quality among other reasons. Such compelling need is often called a burning platform. But do we need to get to that level before we change. There must be another way!. The way to establish a compelling need, in the words of Jack Welch, ex CEO of General Electric, is for the leader to change before you have to. One way to make a case for a compelling need in good times is to continuously benchmark your efforts against the best Organizations in all areas regardless the nature of the industry and competition. Why Organizations Dont Reengineer? Complacency Political Resistance New Developments Fear of Unknown and Failure Performance BPR seeks improvements of Cost Quality Service Speed BPR Symbols Business Process Flowchart Symbols An Activity A Document A Decision Data (input as outputs) Business Process Flowchart Symbols A Predefined Process The Start of a Process The End of a Process Representing a Relation Start End Business Process Flowchart Symbols Continuation of the process at the same page at an equal symbol with the same number. Used when a relation arrow crosses another relation arrow Off-Page Connector - Process will continue on the next page Integration Relation - A relation to another module is identified and described Data Flowchart Symbols An Activity A Document A Decision Flat Data File (input as outputs) Data Flowchart Symbols Manual Data Item A Database File Representing a Relation Continuation Off-Page Connector Rules For Data Symbols Start End Generate Purchase Order OK? Yes No Symbol used to identify the start of a business process Activities must be described as a verb Decisions have only two possibilities (Yes & No) Crossing lines are not allowed If one side of the decision has no further processes defined this symbol has to be used Rules For Data Symbols Purchase Order Posting of Bonus I A Continuation symbol within the same number must be present twice on the same page Name the document Off- Page Connector is used to continue a process at the next page or to let the process to flow over at the previous to the next page. If more than one is needed use A, B, C, D Name the data Rules For Data Symbols Sub-Process Delivery BC 4.04 Predefined Processes always have a relation to level and stream by a number in the line below a sub-process description A predefined process must be described in a different flowchart. To make the relation clear between the predefined process and the belonging flowchart a unique alpha numeric number should be assigned to this predefined process. Version Management For different versions of a business process or data flow some mandatory information must be on the flowchart. Name of the business process Unique number of the business process Revision number Date of last change Author Page number with total pages Map Existing Processes The objective is to redesign any process in the organization This requires developing a deep understanding of the current status for processes in the organization in order to: Provide basis for developing the services / processes framework Set the change boundary Accompanied by a similar understanding of the organization strategy, goals, objectives, structure, challenges, legal and social frameworks and all other related aspects that might affect the redesign. Business Process redesign methodology in four stages Activities: Interview process owners Interview experts and stakeholders if needed Map and document process steps and key performance parameters Understand underlying performance drivers Process steps Rules and regulations IT support Legal environment Deliverables: Parameters for each process Process flows at workplace level For process documentation; its advised to use international standard format such as Business Process Modeling Notation (BPMN) or unify a standard notation and work according to it in developing the flowcharts. Map existing processes Description - process Description process step Description - role Description IT application Description data collection Company Employee Company HR Officer Labour Office Employee Bank Branch Officer Work Permit process flow Request Work Permit Save employee data on disk Upload data at Labour Office Computer Department Pay WP fee Receive payment and return receipt WP Fee Receive payment receipt WP Payment receipt Check Employe e data Receive physical WP Physical WP Issue physical WP Data OK Correct empl. data Data incorrect Final state: - Company employee has a physical Work Permit in his hand. Initial state: -Company employee has acquired an entry visa at MoFA or embassy, and requests a Work Permit at the Labour Office. To-Be ISO / TS 16949:2002 Highlights MarketingDesignManufacturingPackagingShipping Realization Process Document Control Business Processes Customer Satisfaction Quality Planning Quality Objectives Management Review Corrective & Preventive Action Data Control Internal Auditing Support Processes PurchasingShippingTrainingSafety Compliance Maintenance Process Map Example MOPs SOPs COPs Input Customer Requirements Output Customer Satisfaction Turtle Diagram Example Requirements Process Training Knowledge Skills (With whom?) Equipment / Installations (With what?) Key Factors (How many?) Instructions Procedures Methods (How?) Input What Should We Receive? Output What Should We Deliver? Implementing a BPR Strategy The Cs related to Organization Re-engineering Projects The 3Cs of organization Re- engineering: The 4Cs of effective teams: - Customers - Competition - Change - Commitment - Cooperation - Communication - Contribution Key Steps Select The Process & Appoint Process Team Understand The Current Process Develop & Communicate Vision Of Improved Process Identify Action Plan Execute Plan 1.Select the Process & Appoint Process Team Two Crucial Tasks Select The Process to be Reengineered Appoint the Process Team to Lead the Reengineering Initiative Select the Process Review Business Strategy and Customer Requirements Select Core Processes Understand Customer Needs Dont Assume Anything Select the Process Select Correct Path for Change Remember Assumptions can Hide Failures Competition and Choice to Go Elsewhere Ask - Questionnaires, Meetings, Focus Groups Appoint the Process Team Appoint BPR Champion Identify Process Owners Establish Executive Improvement Team Provide Training to Executive Team Core Skills Required Capacity to view the organization as a whole Ability to focus on end-customers Ability to challenge fundamental assumptions Courage to deliver and venture into unknown areas Core Skills Required Ability to assume individual and collective responsibility Use of Consultants Used to generate internal capacity Appropriate when a implementation is needed quickly Ensure that adequate consultation is sought from staff so that the initiative is organization-led and not consultant-driven Control should never be handed over to the consultant 2.Understand the Current Process Develop a Process Overview Clearly define the process Mission Scope Boundaries Set business and customer measurements Understand customers expectations from the process (staff including process team) 2.Understand the Current Process Clearly Identify Improvement Opportunities Quality Rework Document the Process Cost Time Value Data 3.Understand the Current Process Carefully resolve any inconsistencies Existing -- New Process Ideal -- Realistic Process 3.Develop & Communicate Vision of Improved Process Communicate with all employees so that they are aware of the vision of the future Always provide information on the progress of the BPR initiative - good and bad. Demonstrate assurance that the BPR initiative is both necessary and properly managed 3.Develop & Communicate Vision of Improved Process Promote individual development by indicating options that are available Indicate actions required and those responsible Tackle any actions that need resolution Direct communication to reinforce new patterns of desired behavior 4.Identify Action Plan Remove no-value-added activities Standardize Process and Automate Where Possible Up-grade Equipment Plan/schedule the changes 5.Execute Plan Qualify/certify the process Perform periodic qualification reviews Define and eliminate process problems Evaluate the change impact on the business and on customers Benchmark the process Provide advanced team training Information Technology & BPR Benefits From IT Assists the Implementation of Business Processes Enables Product & Service Innovations Improve Operational Efficiency Coordinate Vendors & Customers in the Process Chain BPR Challenges Common Problems with BPR Process Simplification is Common - True BPR is Not Desire to Change Not Strong Enough Start Point the Existing Process Not a Blank Slate Commitment to Existing Processes Too Strong REMEMBER - If it isnt broke Common Problems with BPR Process under review too big or too small Reliance on existing process too strong The Costs of the Change Seem Too Large BPR Isolated Activity not Aligned to the Business Objectives Allocation of Resources Poor Timing and Planning Keeping the Team and Organization on Target How to Avoid BPR Failure To avoid failure of the BPR process it is recommended that: BPR must be accompanied by strategic planning, which addresses leveraging Information technology as a competitive tool. Place the customer at the centre of the reengineering effort, concentrate on reengineering fragmented processes that lead to delays or other negative impacts on customer service. BPR must be "owned" throughout the organization, not driven by a group of outside consultants. Case teams must be comprised of both managers as well as those who will actually do the work. How to Avoid BPR Failure The Information technology group should be an integral part of the reengineering team from the start. BPR must be sponsored by top executives, who are not about to leave or retire. BPR projects must have a timetable, ideally between three to six months, so that the organization is not in a state of "limbo". BPR must not ignore corporate culture and must emphasize constant communication and feedback. Summary Reengineering is a fundamental rethinking and redesign of business processes to achieve dramatic improvements BPR has emerged from key management traditions such as scientific management and systems thinking Rules and symbols play an integral part of all BPR initiatives Summary Dont assume anything - remember BPR is fundamental rethinking of business processes
