BPR SAP PDF

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2011 SAP AG 1

Overview of Business Process Re-Engineering (BPR) in SAPImplementations

Applies to:

All SAP Consulting professionals. For more information, visit theEnterprise Resource Planning homepage.

Summary

A BPR intervention is not merely the adaptation of an SAP/ERP system or the business processes of anorganization, it implies changes in the way of doing business as well as on the structure and culture of anorganization; it is changing the way of working of an organization and the process-oriented vision thatorganization needs to integrate

Author: Kedar Kulkarni

Company: Accenture

Created on: 11th

April 2011

Author Bio

I have been working in SAP for over 4 years with my areas of consulting being in MaterialsManagement, Supplier Relationship Management and Warehouse Management. I have also workedin the domain for over 10 years in the areas of Purchase, vendor development. My SAP experience,have worked on implementation, roll outs and support projects. I am currently working in Accenture

where I am instrumental in designing solutions for the clients requirements
https://www.sdn.sap.com/irj/sdn/bpx-erphttps://www.sdn.sap.com/irj/sdn/bpx-erphttps://www.sdn.sap.com/irj/sdn/bpx-erphttps://www.sdn.sap.com/irj/sdn/bpx-erp


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Overview of Business Process Re-Engineering (BPR) in SAP Implementations


2011 SAP AG 2

Table of Contents

Business Process Re-engineering (BPR) Overview .......................................................................................... 3BPR and ERP ................................................................................................................................................. 3

BPR Methodologies ............................................................................................................................................ 3Towards a BPR Strategic View for SAP Implementations ................................................................................. 4Aspects of BPR in SAP Implementations ........................................................................................................... 4Measurement of Goal of BPR ............................................................................................................................. 5Definition of Metrics and their relationship with questions .................................................................................. 5Conclusion .......................................................................................................................................................... 6Related Content .................................................................................................................................................. 7Disclaimer and Liability Notice ............................................................................................................................ 8


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Business Process Re-engineering (BPR) Overview

BPR has been popular in recent years as the most important technique for restructuring business operationsto achieve, In the early 1990s, BPR had an explosive dissemination, especially after the publication of thebook by Hammer and Champy (1993) entitled Reengineering the Corporation: A Manifesto for BusinessRevolution

A process is a lateral or horizontal organizational form that encapsulates the interdependence of tasks,

roles, people, departments and functions required to provide a customer with a product or service

A business process is comprised of the people who conduct it, the tools they use to assist them, theprocedures they follow and the flows of Material and information between the various people, groups andsub-activities

In order of importance, the reasons are: to improve inefficient business processes, to be industrial leader, toreorganize business functions, and to improve current industry position.

There is a strong relationship between BPR and organizational change management procedures during aBPR project with the support of top management. This evidences the need to integrate techniques fororganizational design and change into BPR projects

BPR and ERPERP systems pave the way for BPR since the implementation of SAP systems requires examination of manybusiness processes, the frontiers of which comes first, BPR and then ERP, or ERP and then BPR??Implementation of BPR and SAP has proved to be the most effective and powerful method for businessimprovement.

Another important issue in BPR/ERP projects is the cycle time expended for redesigning the processes andobtaining the expected results

BPR Methodologies

Bancroft et al. (1998) defined a four-basic-steps approach for a BPR method:

choose a process

understand it to the extend needed

Redesign it

Implement the change

Identify two dimensions in a BPR initiative, magnitude of change and scale of the change effort involved:

Magnitude of change - although the initial concept of BPR was associated with a radical change, nowadaysthese changes are on a continuum from streamlining to reinvention (Bancroft et al. 1998). Streamlining abusiness process implies making incremental changes to the current process to increase quality, decreasecycle time, or reduce cost. Reinventing a business process means scrapping the current one and creating a

process that truly meets the needs of the company

Scale of the change effort involved this dimension refers to the portion of business involved in the BPRproject. Bancroft et al. (1998) quoted that the more departments and people involved in the change, thegreater the scale and therefore the higher complexity of effort. Some organizations adopt the approach ofstarting with a small portion in a pilot project and the extend the experience to the whole organization, to anapproach with major sections


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Towards a BPR Strategic View for SAP Implementations

Client Project managers/ SAP project Managers must develop a strategic view of BPR instead of a tacticalone. In most ERP implementation projects, BPR is seen as a consequence of an SAP/ERP implementationand hence its importance is dismissed.At the tactical level client-managers are worried in redesigning their business in order to align the SAP/ERPsystem and the current business processes However, a BPR effort in strategic terms is an intervention, andprobably the most important intervention associated with the adoption of the SAP/ERP system

A BPR intervention is not merely the adaptation of an SAP/ERP system or the business processes of anorganization, it implies changes in the way of doing business as well as on the structure and culture of anorganization; it is changing the way of working of an organization and the process-oriented vision thatorganization needs to integrate

The most important outcome of BPR has been viewing business activities as more than a collection ofindividual or even functional tasks; it has engendered the process -oriented view of business. Thus, the BPReffort must be seen as an enabler of organizational and business improvement. The BPR intervention mayhave deep effects not only on the short term of organizational behavior, but also on its long term behaviorand strategy. Two main reasons arise in order to develop this strategic view: current changes in the businessworld and the rising knowledge organization.

The concepts of ERP and BPR are unique and to understand better how they are related to each other onehas to follow the path of process study of the problem. In essence, understanding the existing businessprocesses is one of the key elements in ERP implementations. Implementing an ERP system involvesreengineering the existing business processes to the best business process standard.ERP systems are builton best practices that are followed in the industry domain. Therefore, in practice, BPR is aimed at only whenthe customers requirements are not met within the scope of customization allowed by the ERP system. Theorganization business strategy outlines what you want to do. BPR outlines how you want to do it -reengineering (human and system) behaviors in your business to achieve those goals. ERP answers thequestion with what.

Aspects of BPR in SAP Implementations

Main issues in a BPR approach during an ERP implementation project

Positive Aspects:

Stimulates business improvement

Alignment of business processes and ERP system

Design of crosscutting business processes

Negative Aspect:

Causes project delays

Requires additional effort from employees

Most of the times is too technological oriented

Adoption of certain ERP functionality implies the adoption of several modules

Main Issues measuring BPR

Define which business processes must change

Define who collects the BPR metrics

define which ERP processes must change

Analyze when BPR monitoring must be done


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Measurement of Goal of BPR

Analyze: The actual redesign of business processesFor the purpose ofUnderstanding BPRWith respect to SAP implementation projectsFrom the viewpoint ofProject managers and their project teamsIn the context ofOrganizations under BPR/ERP initiatives

Define Questioner for BPR

Dimensions Questions

Change Management What is the magnitude of redesign for each business process?

What jobs are affected by the changes?

How many departments are affected?

People How many users are involved?

Are key-users for each business process involved?

Process How many business processes need to be redesigned?

Which other business processes are affected with the business processredesign?

What is the complexity associated with these business processes?

What is the effort of redesigning these business processes?

How long is the redesign going to take?

Products How many ERP processes need to change?

Definition of Metrics and their relationship with questions

1 Magnitude Of Redesign Magnitude of redesign that is necessary for each businessprocess.

Q1

2 No of Jobs Affected Number of jobs that are affected for each business processredesigned.

Q2

3 Number of departmentaffected

Number of departments that are related with each businessprocess redesigned.

Q3

4 Users involved Users involved in the BPR process Q4

5Number of business

Number of business processes that need to be redesigned Q6


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processes redesigned

6Number of business

processes affected

Number of business processes that need changes due to theredesign of another business process.

Q7

7Complexity of business

processes

Sum of the number of activities, the number of people in eachactivity, the number of material flows into and out of theprocess, and the number of material flows between the

activities of the process

Q8

8BPR effort This metric is related with the portions of business involved in

the BPR redesign. It is composed of the total number ofdepartments, the number of business processes redesignedand the people involved in each phase.

Q9

9Duration of businessprocess redesign

Estimated time necessary to redesign each business process.Q10

10Number of ERP

processes affected

Number of ERP processes that need changes due to the BRPprocess

Q11

Few examples of in which areas we can implement BPR to get more benefits from SAP Implementation.

Module Description

Classification System Improve Set up and usage with regard to materialmaster

Purchasing extension Extend scope with transport and services, includinginvoice verification

Cash Management treasury Introduce new functionality

Plant wide purchasing Introduction of Plant wide replenishment function

Capacity leveling Implementing detail scheduling

Conclusion

A BPR intervention is not merely the adaptation of an SAP/ERP system or the business processes of anorganization, it implies changes in the way of doing business as well as on the structure and culture of anorganization; it is changing the way of working of an organization and the process-oriented vision thatorganization needs to integrate. There should be methodology to adopt BPR in more efficient way. Set goal

and define matrix for the same.


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2011 SAP AG 7

Related Content

http://profesores.ie.edu/jmesteves/BPR_amcis2002.PDF

http://www.tojet.net/e-book/SAPBook.pdf

For more information, visit theEnterprise Resource Planning homepage
http://profesores.ie.edu/jmesteves/BPR_amcis2002.PDFhttp://profesores.ie.edu/jmesteves/BPR_amcis2002.PDFhttp://www.tojet.net/e-book/SAPBook.pdfhttp://www.tojet.net/e-book/SAPBook.pdfhttps://www.sdn.sap.com/irj/sdn/bpx-erphttps://www.sdn.sap.com/irj/sdn/bpx-erphttps://www.sdn.sap.com/irj/sdn/bpx-erphttps://www.sdn.sap.com/irj/sdn/bpx-erphttp://www.tojet.net/e-book/SAPBook.pdfhttp://profesores.ie.edu/jmesteves/BPR_amcis2002.PDF


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2011 SAP AG 8

Disclaimer and Liability Notice

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SAP will not be held liable for any damages caused by using or misusing the information, code or methods suggested in this document,and anyone using these methods does so at his/her own risk.

SAP offers no guarantees and assumes no responsibility or liability of any type with respect to the content of this technical article orcode sample, including any liability resulting from incompatibility between the content within this document and the materials andservices offered by SAP. You agree that you will not hold, or seek to hold, SAP responsible or liable with respect to the content of thisdocument.

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