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Business Process

Reengineering

By:- Neel Kamal



Introduction

• In today’s ever-changing world, the only thing that doesn’tchange is ‘change’ itself In a world increasingly driven !ythe three "s: "ustomer, "om#etition and "hange,

• com#anies are on the loo$out for new solutions for their

!usiness #ro!lems%&' Recently, some of the moresuccessful !usiness cor#orations in the world seem tohave hit u#on an incredi!le solution: Business ProcessReengineering (BPR).

•

(ome of the recent headlines in the #o#ular #ress read,“Wal-Mart reduces restocking time from six weeks

• to thirty-six hours.”” Hewlett Packard’s assembly time forserer com!uters touches new low- four minutes.”

• "he reason behind these success stories# $usinessProcess Reengineering)



What is reengineering?

• “Reengineering is the fundamentalrethinking and radical redesign of

business processes to achievedramatic im!roements in critical%contem!orary measures of !erformance

such as cost% &uality% serice and s#eed*• BPR advocates that enter#rises go !ac$

to the !asics and ree+amine their veryroots It doesn’t !elieve in small

im#rovements Rather it aims at totalreinvention

• BPR focuses on #rocesses and not on

tas$s, o!s or #eo#le



What to reengineer? :

• . !usiness #rocess is a series of

ste#s designed to #roduce a #roductor a service It includes all theactivities that deliver #articularresults for a given "ustomer/e+ternal

or internal0*

• 1al$ing a!out the im#ortance of#rocesses ust as com#anies have

organi2ation charts, they should alsohave what are called !rocess ma!sto gie a !icture of how work 'ows

through the com!any.



3hy Reengineer4

• 5istorical ‘reality’ for organi2ations: – 5igh level of demand: organi2ations are

order ta$ers

–

6anagement /and I1)0 focus 7 e8ciency andcontrol of o#erations

• 6odern ‘reality’ since 9;s: – 5y#er-com#etiveness

–

<lo!ali2ation – =ery demanding customers

– 6anagement and I1 focus: Innovation,res#onsiveness>s#eed, ?uality and service



@ord 6otor "om#any

• .ccounts Paya!le function

• A;; #eo#le

• 6ost wor$ on mista$es !etween

Purchase

Orders

Receiving

Documents Invoices



@ord /cont0



@ord /cont0



BPR Princi#les

• rgani2e around outcomes, not tas$s

• 5ave those who use the out#ut of the #rocess #erformthe #rocess

• (u!sume information-#rocessing wor$ into the real

wor$ that #roduces the information• 1reat geogra#hically dis#ersed resources as though

they were centrali2ed

• Cin$ #arallel activities instead of integrating their

results• Put decision #oints where the wor$ is #erformed and

!uild controls into the #rocess

• "a#ture information once and at the source



Process of BPR



• (ctiity )*# Pre!are for +eengineering:

• “,f you fail to !lan% you !lan to fail”. Planning andPreparation are vital factors for any activity or

event to !e successful, and reengineering is noe+ce#tion Before attem#ting reengineering, the?uestion ‘Is BPR necessary4’ should !e as$ed4

• 1here should !e a signiDcant need for the #rocess to

!e reengineered• . cross-functional team is esta!lished with a game

#lan for the #rocess of reengineering

• .nother im#ortant factor to !e considered is to

understand the e+#ectations of your customers andwhere your e+isting #rocess falls short of meetingthose re?uirements

• 5aving identiDed the customer driven o!ectives,

the mission or vision statement is formulated



-Process

• Before the reengineering team can #roceed toredesign the #rocess, they should understand

the e+isting #rocess• 1he im#ortant as#ect of BPR /what ma$es BPR,

BPR0 is that the im#rovement should #rovide

dramatic results• . large manufacturer s#ent si+ million dollars

over a #eriod of one year in a !id to develo# a#arts-trac$ing system and was all set to go

online nly then did he reali2e that he hadtotally overloo$ed a small #iece of information7 ‘the mode of transmission of information!etween the scheduling staE and the sho# Foor

was through a #hone call’



-Process

• 1he main o!ective of this #hase is toidentify disconnects /anything that #revents

the #rocess from achieving desired resultsand in #articular information transfer!etween organi2ations or #eo#le0 and value

adding #rocesses• 1his is initiated !y Drst creation and

documentation of .ctivity and Processmodels

• 1hen, the amount of time that each activityta$es and the cost that each activity re?uiresin terms of resources is calculated through

simulation and activity !ased costing/.B"0



(ctiity )/# 0esign "o-$e !rocess

• 1he o!ective of this #hase is to #roduce oneor more alternatives to the current situation,

which satisfy the strategic goals of theenter#rise

• 1he Drst ste# in this #hase is !enchmar$ing

Benchmar$ing is the com#aring of !oth the#erformance of the organi2ation’s #rocessesand the way those #rocesses are conductedwith those relevant #eer organi2ations to

o!tain ideas for im#rovement*

• 5aving identiDed the #otential im#rovementswe #erform simulation and .B" to analy2e

factors li$e the time and cost involved



(ctiity )/# 0esign "o-$e !rocess

• 1he several 1o-Be models that are Dnallyarrived at are validated By #erforming

1rade oE .nalysis the !est #ossi!le 1o-Bescenarios are selected for im#lementation

(ctiity )1#,m!lement +eengineered

Process#• 1he im#lementation stage is wherereengineering eEorts meet the most resistance

and hence it is !y far the most di8cult one• 1he ?uestion that confronts us would !e,’ IfBPR #romises such !reath ta$ing results thenwhy wasn’t it ado#ted much earlier4’

y



y #Process#

•re?uirements for the construction of the 1o-

Be com#onents can !e added and the resultorgani2ed into a 3or$ Brea$down (tructure/3B(0• 1he !eneDt here is that we can now deDne

the causal and time se?uential relationshi#s!etween the activities #lanned•Gsing #rototy#ing and simulation techni?ues,

the transition #lan is validated and it’s #ilotversions are designed and demonstrated• 1raining #rograms for the wor$ers areinitiated and the #lan is e+ecuted in full scale



(ctiity )2# ,m!roe Process 3ontinuously#

• . #rocess cannot !e reengineered overnight• very vital #art in the success of everyreengineering eEort lies in im#roving thereengineered #rocess continuously• 1wo things have to !e monitored 7 the #rogress of

action and the results• 1he #rogress of action is measured !y seeing howmuch more informed the #eo#le feel, how muchmore commitment the management shows and how

well the change teams are acce#ted in the !roader#ers#ective of the organi2ation•.s for monitoring the results, the monitoring shouldinclude such measures as em#loyee attitudes,

customer #erce#tions, su##lier res#onsiveness etc



• H; ste#s, A de#artments, 9 #ersons

• Issuance a##lication #rocessing cycle time: & hoursminimumJ average days

• only 9 minutes in actually #rocessing the a##lication

Le#artment .(te# 9

Le#artment.

(te#

Le#artment M(te# 9

Issuance.##lication

IssuancePolicy

New Cife Insurance Policy .##lication Process at6utual BeneDts Cife Before Reengineering

(ource: .da#ted from +ethinking the 3or!orate Work!lace# 3ase Manager at

Mutual $ene4t 5ife, 5arvard Business (chool case -&-;9A, 99

6utual BeneDts Cife Before Reengineering

1he New Cife Insurance Policy .##lication Process



1he New Cife Insurance Policy .##lication Process5andled !y "ase 6anagers

"ase 6anager

GnderwriterPhysician

6ainframe

C.N(erver

P"

3or$station

• a##lication #rocessing cycle time: & hoursminimumJ -A days average

• .##lication handling ca#acity dou!le

• "ut 9;; Deld o8ce #ositions



Mna!ling I1 to "onsider• "lient>server technology•

<rou#ware and colla!oration technologies• 6o!ile com#uting /wireless C.N, #en-!ased com#uting,

<P(, iPhone0• Lata ca#turing technology /scanner>!arcode

reader>R@IL0•

1ele#hony: Integration of com#uter and tele#honesystemsJ =oIPJ GniDed communications• 3e! services and (ervice-riented .rchitecture /(.0• Imaging technology, wor$ Fow management systems,

Business Process 6anagement /BP60•

Lecision su##ort systems, Lata warehouse, Businessintelligence, Lata mining, Ligital dash!oard• MRP, "R6, ("6• Mlectronic Lata Interchange /MLI0, Mlectronic "ommerce,

333, and Internet



I1 Mna!ling MEects

Limensions O 1y#e M+am#les I1 Mna!ling MEects

rder from a su##lier

Levelo# a new #roduct

.##rove a !an$ loan

6anufacture a #roduct

Pre#are a #ro#osal

@ill a customer order

Levelo# a !udget

Cower transaction costsMliminate intermediaries

3or$ across geogra#hy<reater concurrency

Integrate role and tas$

Increase outcome Fe+i!ility"ontrol #rocess

Routini2e com#le+ decision

Reduce time and costsIncrease out#ut ?uality

Im#rove analysis

Increase #artici#ation.da#ted from: Laven#ort, 1 5 and (hort, M, Q1he New Industrial Mngineering: Information 1echnology and Business ProcessRedesign,Q 6loan Management +eiew, (ummer 9;, # 9

rgani2ation Mntity•

Interorgani2ational

• Interfunctional

• Inter#ersonal

!ects• Physical

• Informational

.ctivities• #erational

• 6anagerial



1he Reengineering Liamond

BusinessProcesses

O @unctions

BusinessProcesses

O @unctions

6anagementO

6easurement(ystems

6anagementO

6easurement(ystems

o!s , ($ills, Organi2ational

(tructures

o!s , ($ills, Organi2ational

(tructures

=alues and

Beliefs

=alues andBeliefs

Mnlighten

Mntail Lemand

@oster

"ulture

"ustomersO

Info 1ech

"om#etitors

6ar$ets

"ustomers O(u##liers



Conclusion:

• .n intense customer focus, su#erior#rocess design and a strong andmotivated leadershi# are vital

ingredients to the reci#e for thesuccess of any !usiness cor#orationReengineering is the $ey that every

organi2ation should #ossess to attainthese #rere?uisites to success