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Business Process Reengineering
CEM 515
For: Dr. Abdulaziz Bubshait By: Hassan Al-Bekhit
Presentation OutlinePresentation Outline
General IntroductionGeneral Introduction
Business Process ReengineeringBusiness Process Reengineering
BPR SymbolsBPR Symbols Understand and be able to implement a Understand and be able to implement a
BPR StrategyBPR Strategy Understand the main challenges in Understand the main challenges in
implementing a BPR Strategyimplementing a BPR Strategy Conclusion: SummaryConclusion: Summary
Spectrum of ChangeSpectrum of Change
AutomationAutomation
Rationalization Rationalization
of proceduresof procedures
ReengineeringReengineering
Paradigm shiftParadigm shift
AutomationAutomation
refers to refers to computerizing computerizing processes to speed processes to speed up the existing up the existing tasks.tasks.
improves efficiency improves efficiency and effectiveness.and effectiveness.
Rationalization of Rationalization of ProceduresProcedures
refers to refers to streamlining of streamlining of standard operating standard operating procedures, procedures, eliminating obvious eliminating obvious bottlenecks, so that bottlenecks, so that automation makes automation makes operating procedures operating procedures more efficient.more efficient.
improves efficiency improves efficiency and effectiveness.and effectiveness.
Business Process Business Process ReengineeringReengineering
refers to radical refers to radical redesign of business redesign of business processes.processes.
Aims atAims at eliminating repetitive, eliminating repetitive,
paper-intensive, paper-intensive, bureaucratic tasksbureaucratic tasks
reducing costs reducing costs significantlysignificantly
improving improving product/service product/service quality.quality.
Paradigm ShiftParadigm Shift
refers to a more refers to a more radical form of radical form of change where the change where the nature of business nature of business and the nature of and the nature of the organization is the organization is questioned.questioned.
improves strategic improves strategic standing of the standing of the organization.organization.
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Business Process Business Process ReengineeringReengineering
““Reengineering is the Reengineering is the fundamentalfundamental rethinking and rethinking and radicalradical redesign of business redesign of business processesprocesses to achieve to achieve dramatic dramatic improvements in critical, improvements in critical, contemporary measures of contemporary measures of performance such as cost, performance such as cost, quality, service, and speed.” quality, service, and speed.”
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Key WordsKey Words FundamentalFundamental
WhyWhy do we do what we do? do we do what we do? Ignore Ignore what iswhat is and concentrate and concentrate
on on what should be.what should be. RadicalRadical
Business Business reinventionreinvention vs. vs. business improvement business improvement
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Key WordsKey Words DramaticDramatic
Reengineering should be brought in Reengineering should be brought in “when a need exits for heavy blasting.”“when a need exits for heavy blasting.” Companies in deep trouble.Companies in deep trouble. Companies that see trouble coming.Companies that see trouble coming. Companies that are in peak condition.Companies that are in peak condition.
Business Process Business Process a collection of activities that takes one or a collection of activities that takes one or
more kinds of inputs and creates an more kinds of inputs and creates an output that is of value to a customer.output that is of value to a customer.
BPR & The BPR & The OrganizationOrganization
BPR is Not?BPR is Not? BPR may sometimes be mistaken for the following five BPR may sometimes be mistaken for the following five
tools:tools:
1.1. AutomationAutomation is an automatic, as opposed to is an automatic, as opposed to human, operation or control of a process, equipment human, operation or control of a process, equipment or a system; or the techniques and equipment used to or a system; or the techniques and equipment used to achieve this. Automation is most often applied to achieve this. Automation is most often applied to computer (or at least electronic) control of a computer (or at least electronic) control of a manufacturing process. manufacturing process.
2. 2. DownsizingDownsizing is the reduction of expenditures in is the reduction of expenditures in order to become financial stable. Those expenditures order to become financial stable. Those expenditures could include but are not limited to: the total number could include but are not limited to: the total number of employees at a company, retirements, or spin-off of employees at a company, retirements, or spin-off companies.companies.
BPR is Not?BPR is Not?
3. 3. OutsourcingOutsourcing involves paying another involves paying another company to provide the services a company company to provide the services a company might otherwise have employed its own staff to might otherwise have employed its own staff to perform. Outsourcing is readily seen in the perform. Outsourcing is readily seen in the software development sector.software development sector.
4. 4. Continuous improvementContinuous improvement emphasizes emphasizes small and measurable refinements to an small and measurable refinements to an organization's current processes and systems. organization's current processes and systems. Continuous improvements’ origins were Continuous improvements’ origins were derived from total quality management (TQM) derived from total quality management (TQM) and Six Sigma. and Six Sigma.
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Reengineering & Reengineering & Continuous Continuous
Improvement--Improvement--SimilaritiesSimilarities
Reengineering Continuous ImprovementSimilaritiesBasis of analysis Process ProcessPerformance measurement Rigorous RigorousOrganizational change Significant SignificantBehavioral change Significant SignificantTime investment Substantial Substantial
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Reengineering & Reengineering & Continuous Continuous
Improvement--Improvement--DifferencesDifferences
Reengineering Continuous ImprovementDifferencesLevel of change Radical IncrementalStarting point Clean slate Existing processParticipation Top-down Bottom-upTypical scope Broad, cross-functional Narrow, within functionsRisk High ModeratePrimary enabler Information technology Statistical controlType of change Cultural and structural Cultural
What is a Process?What is a Process?
A specific ordering of work activities A specific ordering of work activities across time and space, with a across time and space, with a beginning, an end, and clearly beginning, an end, and clearly identified inputs and outputs: a identified inputs and outputs: a structure for action.structure for action.
What is a Business What is a Business Process?Process?
A group of logically related tasks A group of logically related tasks that use the firm's resources to that use the firm's resources to provide customer-oriented results in provide customer-oriented results in support of the organization's support of the organization's objectivesobjectives
Why Reengineer?Why Reengineer?
CustomersCustomers DemandingDemanding SophisticationSophistication Changing NeedsChanging Needs
CompetitionCompetition LocalLocal GlobalGlobal
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?Why Reengineer?
CompetitionCompetition LocalLocal GlobalGlobal
ChangeChange TechnologyTechnology Customer PreferencesCustomer Preferences
Business Process Reengineering
WHY ?
Integrate people, technology, & organizational culture
To Respond to rapidly changing technical & business environment and customer’s needs to achieve Big performance gains
Why Organizations Don’t Why Organizations Don’t Reengineer?Reengineer?
ComplacencyComplacency
Political ResistancePolitical Resistance
New DevelopmentsNew Developments
Fear of Unknown and FailureFear of Unknown and Failure
PerformancePerformance
BPR seeks improvements ofBPR seeks improvements of
CostCost QualityQuality ServiceService SpeedSpeed
BPR SymbolsBPR Symbols
Business Process Business Process Flowchart SymbolsFlowchart Symbols
An Activity
A Document
A Decision
Data (input as outputs)
Business Process Business Process Flowchart SymbolsFlowchart Symbols
A Predefined Process
The Start of a Process
The End of a Process
Representing a Relation
Start
End
Business Process Business Process Flowchart SymbolsFlowchart Symbols
Continuation of the process at the same page at an equal symbol with the same number. Usedwhen 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 SymbolsData Flowchart Symbols
An Activity
A Document
A Decision
Flat Data File (input as outputs)
Data Flowchart SymbolsData Flowchart Symbols
Manual Data Item
A Database File
Representing a Relation
Continuation
Off-Page Connector
Rules For Data Rules For Data SymbolsSymbols
Rules For Data SymbolsRules For Data SymbolsStart
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 SymbolsRules For Data Symbols
PurchaseOrder
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 SymbolsRules For Data Symbols
Sub-ProcessDelivery
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 ManagementVersion Management
For different versions of a business For different versions of a business process or data flow some mandatory process or data flow some mandatory information must be on the flowchart. information must be on the flowchart. Name of the business processName of the business process Unique number of the business processUnique number of the business process Revision numberRevision number Date of last changeDate of last change AuthorAuthor Page number with total pagesPage number with total pages
Implementing a Implementing a BPR StrategyBPR Strategy
The C’s related toThe C’s related toOrganization Re-engineering Organization Re-engineering
ProjectsProjectsThe 3C’s of organization Re-engineering:
The 4C’s of effective teams:
- Customers
- Competition
- Change
- Commitment
- Cooperation- Communication
- Contribution
Key StepsKey Steps
Select The Process & Appoint Process Team
Understand The Current Process
Develop & Communicate Vision Of Improved Process
Identify Action Plan
Execute Plan
1.1. Select the Process & Select the Process & Appoint Process TeamAppoint Process Team
Two Crucial TasksTwo Crucial Tasks
Select The Process to be ReengineeredSelect The Process to be Reengineered
Appoint the Process Team to Lead the Appoint the Process Team to Lead the Reengineering InitiativeReengineering Initiative
Select the ProcessSelect the Process
Review Business Strategy and Review Business Strategy and Customer RequirementsCustomer Requirements
Select Core ProcessesSelect Core Processes
Understand Customer NeedsUnderstand Customer Needs
Don’t Assume AnythingDon’t Assume Anything
Select the ProcessSelect the Process
Select Correct Path for ChangeSelect Correct Path for Change
Remember Assumptions can Hide Remember Assumptions can Hide FailuresFailures
Competition and Choice to Go ElsewhereCompetition and Choice to Go Elsewhere
Ask - Questionnaires, Meetings, Focus Ask - Questionnaires, Meetings, Focus GroupsGroups
Appoint the Process Appoint the Process TeamTeam
Appoint BPR ChampionAppoint BPR Champion
Identify Process OwnersIdentify Process Owners
Establish Executive Improvement Establish Executive Improvement TeamTeam
Provide Training to Executive TeamProvide Training to Executive Team
Core Skills RequiredCore Skills Required
Capacity to view the organization as a wholeCapacity to view the organization as a whole
Ability to focus on end-customersAbility to focus on end-customers
Ability to challenge fundamental Ability to challenge fundamental assumptionsassumptions
Courage to deliver and venture into Courage to deliver and venture into unknown areasunknown areas
Core Skills RequiredCore Skills Required
Ability to assume individual and Ability to assume individual and collective responsibilitycollective responsibility
Use of ConsultantsUse of Consultants
Used to generate internal capacityUsed to generate internal capacity Appropriate when a implementation is Appropriate when a implementation is
needed quicklyneeded quickly Ensure that adequate consultation is Ensure that adequate consultation is
sought from staff so that the initiative sought from staff so that the initiative is organization-led and is organization-led and notnot consultant-drivenconsultant-driven
Control should Control should nevernever be handed over be handed over to the consultantto the consultant
2.2. Understand the Current Understand the Current ProcessProcess
Develop a Process OverviewDevelop a Process Overview Clearly define the process Clearly define the process
MissionMission ScopeScope BoundariesBoundaries
Set business and customer Set business and customer measurements measurements
Understand customers expectations from Understand customers expectations from the process (staff including process team) the process (staff including process team)
2.2. Understand the Current Understand the Current ProcessProcess
Clearly Identify Improvement Clearly Identify Improvement OpportunitiesOpportunities QualityQuality ReworkRework
Document the ProcessDocument the Process CostCost Time Time Value DataValue Data
3.3. Understand the Current Understand the Current ProcessProcess
Carefully resolve any Carefully resolve any inconsistenciesinconsistencies Existing -- New ProcessExisting -- New Process Ideal -- Realistic ProcessIdeal -- Realistic Process
3.3. Develop & Communicate Develop & Communicate Vision of Improved ProcessVision of Improved Process
Communicate with all employees so that Communicate with all employees so that they are aware of the vision of the futurethey are aware of the vision of the future
Always provide information on the Always provide information on the progress of the BPR initiative - good and progress of the BPR initiative - good and bad.bad.
Demonstrate assurance that the BPR Demonstrate assurance that the BPR initiative is both necessary and properly initiative is both necessary and properly managedmanaged
3.3. Develop & Communicate Develop & Communicate Vision of Improved ProcessVision of Improved Process
Promote individual development by Promote individual development by indicating options that are availableindicating options that are available
Indicate actions required and those Indicate actions required and those responsibleresponsible
Tackle any actions that need resolutionTackle any actions that need resolution
Direct communication to reinforce new Direct communication to reinforce new patterns of desired behaviorpatterns of desired behavior
4.4. Identify Action PlanIdentify Action Plan
Develop an Improvement PlanDevelop an Improvement Plan
Appoint Process OwnersAppoint Process Owners
Simplify the Process to Reduce Process Simplify the Process to Reduce Process TimeTime
Remove any Bureaucracy that may Remove any Bureaucracy that may hinder implementationhinder implementation
4.4. Identify Action PlanIdentify Action Plan
Remove no-value-added activitiesRemove no-value-added activities
Standardize Process and Automate Standardize Process and Automate Where PossibleWhere Possible
Up-grade EquipmentUp-grade Equipment
Plan/schedule the changesPlan/schedule the changes
4.4. Identify Action PlanIdentify Action Plan
Construct in-house metrics and Construct in-house metrics and targetstargets
Introduce and firmly establish a Introduce and firmly establish a feedback systemfeedback system
Audit, Audit, AuditAudit, Audit, Audit
5.5. Execute PlanExecute Plan
Qualify/certify the processQualify/certify the process Perform periodic qualification reviewsPerform periodic qualification reviews Define and eliminate process problemsDefine and eliminate process problems Evaluate the change impact on the Evaluate the change impact on the
business and on customersbusiness and on customers Benchmark the processBenchmark the process Provide advanced team trainingProvide advanced team training
Information Information Technology & Technology &
BPRBPR
Benefits From ITBenefits From IT
Assists the Implementation of Assists the Implementation of Business ProcessesBusiness Processes Enables Product & Service InnovationsEnables Product & Service Innovations Improve Operational EfficiencyImprove Operational Efficiency Coordinate Vendors & Customers in the Coordinate Vendors & Customers in the
Process ChainProcess Chain
BPR ChallengesBPR Challenges
Common Problems with Common Problems with BPRBPR
Process Simplification is Common - Process Simplification is Common - True BPR is NotTrue BPR is Not
Desire to Change Not Strong EnoughDesire to Change Not Strong Enough Start Point the Existing Process Not a Start Point the Existing Process Not a
Blank SlateBlank Slate Commitment to Existing Processes Commitment to Existing Processes
Too StrongToo Strong REMEMBER - “If it isn’t broke …”REMEMBER - “If it isn’t broke …”
Common Problems with Common Problems with BPRBPR
Process under review too big or too smallProcess under review too big or too small Reliance on existing process too strongReliance on existing process too strong The Costs of the Change Seem Too LargeThe Costs of the Change Seem Too Large BPR Isolated Activity not Aligned to the BPR Isolated Activity not Aligned to the
Business ObjectivesBusiness Objectives Allocation of ResourcesAllocation of Resources Poor Timing and PlanningPoor Timing and Planning Keeping the Team and Organization on Keeping the Team and Organization on
TargetTarget
How to Avoid BPR How to Avoid BPR FailureFailure
To avoid failure of the BPR process it is recommended To avoid failure of the BPR process it is recommended that: that:
BPR must be accompanied by strategic planning, which BPR must be accompanied by strategic planning, which addresses leveraging Information technology as a addresses leveraging Information technology as a competitive tool. competitive tool.
Place the customer at the centre of the reengineering Place the customer at the centre of the reengineering effort, concentrate on reengineering fragmented effort, concentrate on reengineering fragmented processes that lead to delays or other negative impacts processes that lead to delays or other negative impacts on customer service. on customer service.
BPR must be "owned" throughout the organization, not BPR must be "owned" throughout the organization, not driven by a group of outside consultants. driven by a group of outside consultants.
Case teams must be comprised of both managers as Case teams must be comprised of both managers as well as those who will actually do the work. well as those who will actually do the work.
How to Avoid BPR How to Avoid BPR FailureFailure
The Information technology group should be The Information technology group should be an integral part of the reengineering team an integral part of the reengineering team from the start. from the start.
BPR must be sponsored by top executives, who BPR must be sponsored by top executives, who are not about to leave or retire. are not about to leave or retire.
BPR projects must have a timetable, ideally BPR projects must have a timetable, ideally between three to six months, so that the between three to six months, so that the organization is not in a state of "limbo". organization is not in a state of "limbo".
BPR must not ignore corporate culture and BPR must not ignore corporate culture and must emphasize constant communication and must emphasize constant communication and feedback. feedback.
SummarySummary Reengineering is a fundamental Reengineering is a fundamental
rethinking and redesign of business rethinking and redesign of business processes to achieve dramatic processes to achieve dramatic improvementsimprovements
BPR has emerged from key management BPR has emerged from key management traditions such as scientific management traditions such as scientific management and systems thinkingand systems thinking
Rules and symbols play an integral part of Rules and symbols play an integral part of all BPR initiativesall BPR initiatives
SummarySummary
Don’t assume anything - remember Don’t assume anything - remember BPR is fundamental rethinking of BPR is fundamental rethinking of business processesbusiness processes