Reenginering organisaton

Reengineringthe Organization

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Agenda

Purpose of Reengineering What is Reengineering Many faces of Reengineering Definition of Reengineering Features of reengineering Process of Reengineering Role of IT Outcome of the Reengineering Conclusion

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Purpose of the Reengineering

Reengineering is tool to prepare the organization run effectively in the globally competitive environment

To maintain competitiveness , and value addition in our services and product for customer .

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What is Reengineering

Hammer and Champy state, “A business process” is a collection of activities that takes one or more kinds of input and creates an output that is of value to the customer

Business Process Reengineering represents a radical rethinking of company procedures and organizational structure aimed at obtaining substantial improvements in terms of costs, quality, service, drawing on the analysis of the value of the activities of the company.

Reengineering is significant changes tobasic business processes that yield 50-100% rates of improvement

“a methodological process that uses information technology to radically overhoul business process and thereby attain major business goals”

“the reconfiguration of the business using IT as a central lever”

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Many Faces of Reengineering

Business process reengineering (BPR) Business process improvement Core process redes Process innovation Business process transformation Breakpoint business process redesign Organisational reengineering Business process management Business scope redefinition Organisational change ecology Structured analysis and improvement

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Definition

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

-Michael Hammer and James Champy

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Features of Reengineering

Fundamental rethinking refers What the organization is doing and Why ?

Appropriate question may not be

How can we do it better?

but

Do we really need to do this at all?

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Radical Redisign refers not a modification but a reinvention

Radical change means asking ‘’What if we could disregard our existing organization and procedures and start with blank piece of paper?’’

What would the organization look like? What business processes would we use to

achieve the desired result ?

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Competitive environment demands that the change will take place , because in many cases it does result fewer people being needed due to implement new technology

Misconception arises of Downsizing or Rightsizing, people can be displaced and hurt in the process , it leads to effect the team spirit .

Achieving major goals or dramatic performance improvements

Business process as opposed to departments or functional areas

IT as a critical enabler Is typically initiated from the top down

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focus on processes questions the logic of existing designs New design of work should not be based on the

classical hierarchical arrangement or division of work but on end to end processes and creation of new values for the customer eg. Total customer satisfaction , meeting competition

is usually a one-shot attempt at achieving improvements

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Reengineering Process

Preparation – What the customer actually want from organization

Developing Strategy – Develop Strategic Processes, Analysis & Prioritization

Design an Organizational System- Create a Core team of People

Implementation – realization of technical and social plans

Role of IT

an initiator, a facilitator, or an enabler

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Role of IT - Initiator

Agent of change New requirements e.g. Internet

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Role of IT - Facilitator

Make work/workload easier e.g. Flow of Information

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Role of IT - Enabler

Most attention Offers the ability/necessary assistance to

accomplish

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Role of IT – E-Commerce

Personalized service Lower transaction & material costs e.g. E-tickets

Save cost of print/mailfReduced commission payable to travel

agency

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Role of IT - Coordination

Shared Databases Information disseminationFacilitate distribution

NetworkingAssists collection/dissemination Rapid implementation of decisions

Telecommunication

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IT in Integration

Functional Area Information TechnologiesMarketing Multimedia, Internet, database

Distribution Online Inventory and shipment controls, Internet, Database, Barcodig, satellite positioning

Accounting Computerized Data collection, shared Database, Spread Sheets

Design & Engineering CAD

Purchasing Internet, Database, ERP

Production CAM, Database, Scheduling, barcoding, ERP, EDI

Maintenance Expert Systems, Scheduling

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Benefits of IT

Cost reduction Time elimination Error minimization Facilitating Integration Enhancing decision Making

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Positive Preconditions for BPR

Senior Management Commitment The organization has to believe in the change;    The whole organization must be involved in the change; Realistic Expectations Theoretical and practical training is required to create

new professionalism Sound Management Practices People Participating Sufficient Budget

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Negative Preconditions for BPR

Unsound Financial Condition Too Many Projects Under Way Fear and Lack of Optimism

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Outcome of the Reengineering

Business domain Redefinition Redefinition role and responsibility Information system Implementation Processes innovation Elimination of obsolete processes Training for achievement motivation

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BPR Project Problems

Other problems:

the danger of another inefficient system discontinues in the leadership lack of communication selecting wrong IT vendors lack of awareness of the lead times associated with IT

Biggest obstacles that reengineering faces are

(i) Lack of sustained management commitment and leadership

(ii) Unrealistic scope and expectations

(iii) Resistance to Change.

70% of the BPR projects fail

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Conclusion BPR must be seen as a strategic, cross-functional

activity that needs to be integrated with other aspects of management

The key requirement is that managers understand in detail the current business processes before starting on a BPR project.

The application of IT can provide major improvements in the performance of business systems, and while considered a major part of the reengineering activity, must be integrated with the needs of customer in mind.

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THANKS & QUESTIONS