Powerpoint slides

Business ProcessBusiness Process ManagementManagement

Business ProcessBusiness ProcessRe-engineeringRe-engineering

Business ProcessBusiness ProcessAnalysisAnalysis

Business Process Business Process . . .. . .

Traditional OrganisationTraditional Organisation and and Functional ManagementFunctional Management

Traditional Organisation Chart

Source: D Williamson, Introduction to Management Accounting

• People work in functional areas: production people in the Production department(s), marketing people in Marketing, ICT (Information and Computer Technology) in ICT, etc.

Traditional Organisation Traditional Organisation and Functional Managementand Functional Management

Traditional Organisation Chart (cont’d)

Chart shows:

• a set of co-ordinated functional specialisms

• division of labour

Traditional view identifies where people belong

• But is it flexible?

• Can it adapt/react quickly to change?

• Is only collaboration via Purchasing and Sales?

Business ProcessBusiness Process ManagementManagement

BPRC NEWSLETTER 1, November 1995 (with my emphasis):

The combined effects of developments in information technology and internationalisation of markets have led researchers and managers to a view that new practices and organisational structures are becoming necessary in a mature industrial age …bringing about fusion rather than division of labour, and a view of industry as a set of seamless internal and external relationships

BPRC NEWSLETTER 1, continued (with my amendments):

aimed at delivering sustained customer satisfaction[,] rather than as a set of coordinated functional specialisms.

The Business Process approach to resource management is emerging as [a] major innovative mechanism[,] enabling the organisation to adapt to the new competitive environment.

Business ProcessBusiness Process ManagementManagement

BPRC NEWSLETTER 1 (with amendments), continued:

Business Process Management is [also] not restricted to the manufacturing sector.

The ESRC Business Processes Resource Centre, Warwick Manufacturing Group, International Manufacturing Centre, University of Warwick:

Business ProcessBusiness Process ManagementManagement

Business ProcessBusiness Process Management 2

What is it?• Recent innovations in managing businesses by

American and some UK companies.

• Global marketplace changes and so firms respond.

• Constantly introduce innovations in both technologies, for processing and producing goods and services, and in developing products, plus in cycles in manufacturing.

Professor Arunachalam and Dr. Subrahmanian, Carnegie Mellon University, Pittsburgh

Business ProcessBusiness Process Management 3

What is it?• Are too many business innovations in US today!

• But business has identified cost, quality and time as demands in the market

• So, we are looking at significant innovations used to improve business processes.

• and to help US businesses meet these demandsProfessor Arunachalam and Dr. Subrahmanian, Carnegie Mellon University, Pittsburgh

Business Process Re-engineering

• Process Re-engineering (BPR) increasingly used to describe efforts to improve Business processes.

• Are different implementation models and methods because re-engineering is often interpreted in many ways.

• Re-engineering examples range from a firm re-engineering a production process to completely restructuring its entire organisation.

Professor Arunachalam and Dr. Subrahmanian, Carnegie Mellon University, Pittsburgh

Business Process Re-engineering 2

• From ‘local’ BPR, analytical models have been developed to optimise existing processes, through using simpler procedures and using IT.

• An industry of consultants has grown up, plus tools for mapping process and simulation tools.

• Organisations’ established structures and processes have been totally replaced by new structures and flexible processes.

Professor Arunachalam and Dr. Subrahmanian, Carnegie Mellon University, Pittsburgh

Business Process Re-engineering 3

• This may include using cross-functional teams, retraining workers, and managing innovation, as integral parts of firms’ business processes,

• much more than just designing, manufacturing, and servicing products.

• It means re-engineering people: the way they learn their jobs, the way they work and the way they collaborate with their workmates.

Professor Arunachalam and Dr. Subrahmanian, Carnegie Mellon University, Pittsburgh

Business Process Re-engineering 4

• Workers often have to learn new trades and learn new practices at work, take on new work ethics which go beyond their narrow specialisations.

• Successful innovations in industry in the past used division of labour but almost removed human ingenuity and innovation from the workplace.

• View of the workforce in making changes to the organisation has also changed with BPR.

Professor Arunachalam and Dr. Subrahmanian, Carnegie Mellon University, Pittsburgh

Business Process Re-engineering 5

• Production is now more efficient, streamlined and flexible, due to new technologies in manufacturing and process.

• Has resulted in achieving previously unachievable quality at unattainable speeds.

• Work-force now groups with competence across many areas of manufacturing, motivated by team-spirit, delegated power and vested authority; no longer just skilled individuals

Professor Arunachalam and Dr. Subrahmanian, Carnegie Mellon University, Pittsburgh

Business Process Re-engineering 6

• Retraining programmes now seen as crucial in companies’ success in implementing BPR.

• There are resources in bigger companies to re-engineer processes and re-train their workforces

• Ability of suppliers in the value chain to practice BPR also crucial for companies success with BPR.

• Individual firms are seen as being responsible to implement BPR and train suppliers’ workforces.

Professor Arunachalam and Dr. Subrahmanian, Carnegie Mellon University, Pittsburgh

Business Process Re-engineering 7

• However,the government in the US is helping restructure the processes of US businesses!!

• It is providing initiatives and inducements to firms to provide continuing education and retraining.

• It is actively and innovatively filling in gaps, especially in processing and manufacturing, that it sees in US companies.

• This is considered essential to keep American products globally competitive.

Professor Arunachalam and Dr. Subrahmanian, Carnegie Mellon University, Pittsburgh

Business Process Re-engineering 8

• Multi-agency programs have been introduced in defence, dual-use, and civilian sectors,

• providing short-term research programs in high value but high risk manufacturing technologies.

Professor Arunachalam and Dr. Subrahmanian, Carnegie Mellon University, Pittsburgh

Business Process Re-engineering 9

•Why?

• Japanese firms were successful in capturing a significant part of the US automobile market in the 70's and 80's.

• They could adapt to changes in economic conditions, without large unemployment changes

• This has led to a rethink of the nature of American industry’s business operations.

Professor Arunachalam and Dr. Subrahmanian, Carnegie Mellon University, Pittsburgh

Business Process Re-engineering 10

• Result: serious look at new business models and the car industry in Japan being scrutinised by US companies and business theorists.

• Studied Japanese process innovations, quality management and lean production technologies.

• Introduction of IT into Japanese firms’ work practices, with US innovations, preserved Japanese organisational and cultural advantages.

Professor Arunachalam and Dr. Subrahmanian, Carnegie Mellon University, Pittsburgh

Business Process Analysis 1

• Business Process Analysis is continually changing

• in both details of every process matter, but also in overall objectives of organisations.

• Technology is a force driving re-engineering.

• Economic and cultural practices also relevant.

• Tomorrow’s BPR methods and tools are the knowledge and experience gained by individual companies and business theorists.

Professor Arunachalam and Dr. Subrahmanian, Carnegie Mellon University, Pittsburgh

Business Process Analysis 1

• BPR is proving to be a powerful approach for organizations wanting to be competitive.

Professor Arunachalam and Dr. Subrahmanian, Carnegie Mellon University, Pittsburgh

Business Process Analysis - A Letter from America, A report to Engineering and Scocial Science Research Council, UK: Abstract

http://bprc.warwick.ac.uk/bprv1-1f.html

However:

• Reported failure rates of about 40 to 70 percent for BPR applications in achieving stated goals

• This could be due both to perceived differences in defining re-engineering and to the level where it is implemented.

• The coverage and scope of BPR in different firms may explain differences in firms using BPR successfully or unsuccessfully, rather than how they apply BPR tools and methods.

• Professor Arunachalam and Dr. Subrahmanian, Carnegie Mellon University, Pittsburgh

Any QuestionsQuestions ?

Powerpoint presentation adapted by M C Pratt, St Martin’s College, from:

1. BPRC NEWSLETTER 1, November 1995. The ESRC Business Processes Resource Centre, Warwick Manufacturing Group, International Manufacturing Centre, University of Warwick:

Web address: http://bprc.warwick.ac.uk/news1.html

2. Professor Arunachalam and Dr. Subrahmanian, Carnegie Mellon University, Pittsburgh, Business Process Analysis - A Letter from America, A report to Engineering and Scocial Science Research Council, UK

Web address: http://bprc.warwick.ac.uk/bprv1-1f.html

3. Managing Activities, Powerpoint presentation by A Mulengani, Northampton University College, 2001