Bpr Exam Ppt

1Prof. Mahantesh B Halagatti-KLS IMER-Belgaum

KLS Institute of Management Education and ResearchBelgaum

!….Defining BPR….!

• "... 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."

Defining PROCESS

• “ A set of logically related tasks performed to achieve a defined business outcome”

PROCESS (simplified)

• “ One or more tasks that add value by transforming a set of inputs into a specified set of outputs( Goods or service) for another Person (Customer) by a combination of people, methods and tools.”

Characteristics Processes have:

• Customers ( Internal or External)

• Cross-Organizational boundaries ( Across or Between organizational Subunits)

Categorization of Processes according to Work like:

• Design & Development• Marketing & Sales• Purchasing• Production• Service• Distribution• Control• support

Processes……• Processes are generally identified in

terms of Beginning and End points, Interfaces and Organization units involved.

• High impact processes should have Process owners.

Process defined based on 3 Dimensions…:

• ENTITIES: Inter-organizational, Interventional or Interpersonal.

• OBJECTS: Physical or Informational.• ACTIVITIES:

ManagerialOperational

Components for setting Direction are:

• Mission• Vision• Values• Goals & Objectives• Policy• Methodology

Defining Fundamental• Attempts to examine Why a particular task

or job is being done and Why it is being done in a particular way.

• Ascertain relevance of the job.• Possibility of doing it in a different and

better way.• Should be Obliterated if Redundant,

Modified if Essential or Unavoidable.

Defining Radical….

• BPR attempts to get into the Root of the business.

• Not concerned with Marginal or Incremental improvements.

• BPR does not operate at surface level where improvements are of minor nature.

Defining Redesign…

• A Plan for making changes to the structure and functions of Process so as to better serve the purpose of the original Process, or to serve purposes different from those set forth in the original design.

Defining Dramatic

• Relates to radical improvements.• Marginal improvements in key processes

is inadequate.• Dramatic implies quantum leaps in

performance, achieving breakthroughs or break points.

Why Reengineering?

• For organizations that want to survive and grow, improvement is not an option but a compulsion.

• Quantum leaps are needed if an organization is to forge ahead.

Symptoms that signal are….

• It takes too long for an organization to move its products from conception to the market place as compared to its competitors.

• The budgeting process may be too complex.

• The services provided by the organization are not compatible with its customers needs.

Principles or Rules of Reengineering

• Rule 1: Organize around outcome, not tasks

• Rule 2: Have those who use the output of the process perform the process

• Rule 3: Merge information processing work into the real work that produces the information

• Rule 4: Treat geographically dispersed resources as though they work centralized

Rules…

• Rule 5: Link parallel activities instead of integrating their results

• Rule 6: Put the decision point where the work is performed and build control into the process

• Rule 7: Capture information once-at the source

Essence of Reengineering

• Breaking away from outdated rules.• Making Quality and Customer service

the primary focus of the organization.

Three ‘R’s of Reengineering.

• Rethink

• Redesign

• Retool.

Requirement of Reengineering process

• Critical processes

• Strong leadership

• Cross functional teams

Requirements…

• Information technology

• Clean slate philosophy

• Process analysis

BPR in

Manufacturing Industry

Prof. Mahantesh B Halagatti-KLS IMER-Belgaum

Enablers of BPR in Manufacturing

• Agile Manufacturing• Lean Manufacturing• Just-in-Time (JIT)• Collaborative Manufacturing• Intelligent Manufacturing

Agile Manufacturing• Determine customer needs quickly, and

continuously reposition the company against its competitors.

• Design things quickly based on those individual needs.

• Put them into full scale quality and production rapidly.

• Respond to changing volumes and mix without delay.

• Respond to a crisis quickly.

Major Implications on

• Organization• Business Processes• Production processes and equipment• People-skill interchangeability• Recruitment and training

Lean Manufacturing

• Working with limited inventory, waste elimination and reacting on-the-fly to changing conditions.

• Results are significant reduction in operating expenses, and increased customer satisfaction and retention.

Just-in-Time (JIT)

• JIT is a way of producing products on order, and the product should be delivered on time.

Some principles of JIT are:

• Use of multiple small machines• Group technology• Production smoothing• Labor balancing• Set-up reduction• Standard working• Visual controls

BPR in

Service Industry

• In service sector, despite speed and courtesy in addressing customers, customer’s hostility persists due to the inability of the service provider to maintain consistency in delivery and service.

• To remain competitive, service organizations need to focus on customer satisfaction and on real customer needs and expectations. They need to operate according to the standards of the customers.

Some of the salient features

• Make the customer the starting point for change.

• Design work processes in light of organizational goals.

• Restructure to support front-line performance.

Impact of reengineering on the service industry

• The human dimension

• The work process dimension

• The technology dimension

Implementation of BPR

Step 1:

Develop Business Vision and Process objectives.

• A business system is a collection of process each of which is developed to fulfill the needs of customers and characterized by cross-functional tasks.

• Before advent of BPR tasks not processes used to be rationalized or simplified by the industrial engineers. these tasks were not based on business vision.

Develop Business Vision…….

• Process oriented thinking is a prerequisite for BPR.

• Approach is to combine tasks into an integrated whole that represents the end-to-end business processes like product development, order fulfillment, procurement.

• Business vision should emphasize:1) Current/future competition2) product/service quality3) customer’s requirements.

• A customer-oriented organization is aware of the prevailing competition in the market and it offers its product/service accordingly to achieve the competitive edge.

• There is a vide choice for today's customers.

• Common objectives for vision statement are cost reduction, time reduction, quality improvement.

• Dimensions of service quality are: Responsiveness- willingness to help customers and provide prompt service.

• Dimensions of product quality are: Serviceability- speed with which the product can be put into service when it breaks down.

Step 2:

Identification of processes to be Reengineered.

Identifying processes to reengineer

• There are two approaches for identification and prioritization of processes: Exhaustive-All possible processes are identified and prioritized on the basis of urgency High Impact- Attempts to identify only the most important processes or those in most in conflict with the business vision and process objectives.

• Once activities to be performed are identified their desired performance levels or objectives are required to be specified in quantitative terms.

Identifying processes to reengineer….

• In drawing a process chart, the sub- processes and activities involved in it should be properly documented.

• A ‘ Time-Box’ can be implemented which puts a limit to the time needed for studying a process.

Step 3:• Understanding and measurement of existing

processes.

Understanding and measurement of existing processes…

• Is concerned with an assessment of the current state of affairs:

• Departments find nothing wrong with the tasks assigned to them so long as they conform to the norms set for quality, costs, time..

• Time taken for a process or cost incurred in its execution needs to be quantified before and after reengineering to highlight the improvement in process.

Three major advantages of Quantification:

• Enables the company to know where a process is now and what the management wants to achieve.

• Dramatic achievements have the potential to reinforce a process-oriented culture in the organisation.

• Quantified performance of a process before and after reengineering is likely to silence the skeptics.

Step 4:

• Utilization of Information technology as an enabler.

IT capabilities• Transactional• Geographical• Automational• Analytical• Informational• Sequential• Knowledge management• Tracking• Disintermediation

Step 5:

• Design and evaluation of process prototype.

Prototype….

• ‘ Prototype’ is concerned with a process, not a product.

• Reengineering team should first evaluate the feasibility of the proposed reengineered process.

• Need for prototyping.

Advantages of Process Prototype:

• Inexpensive in comparison to a process that fails during implementation.

• Develops process oriented mindset among people.

• Improves process further based on process prototype members suggestions.

Dimensions of process types:

• Process Entities• Process Objects• Process Activities

Process Entities

• Inter-organisational• Inter-functional• Interpersonal

Process objects

• Physical – manufacturing, inspection

• Informational- planning, decision making

Process Activities

• Operational- inspection of product, receipt of materials, response to customer enquiry.

• Managerial-planning, control, provision of resources.

NEED FOR STRUCTURE

• Reengineering cannot be carried out in an unstructured manner.

• A reengineered process deals with issues of interdepartmental rather than intradepartmental.

Usual Reengineering structure

BPR LEADER

OTHER EMPLOYEES INVOLVEDIN THE REENGINEERING PROCESS

PROCESS OWNERS

REENGINEERING TEAMS

Different team members in BPR

• Executive sponsor• Business Analyst• Project manager• Developer• Quality Assurance Analyst• Trainer• Application Architect

Team members….

• Data base Analyst• Infrastructure Analyst• Information Architect• Solution Owner• End User• Subject Matter expert• stakeholders

COMMON PITFALLS IN BPR

• A company where most of the people at different levels are receptive to new ideas and keen to change their ways of doing things differently for the benefit of the company as a whole, will find it less difficult to introduce BPR.

• On the other hand company dominated by employees with a skeptic defensive and complacent mind set will find it hard to introduce BPR.

• Resistance to BPR is often seen to originate from the middle and junior level managers.

SUCCESS FACTORS FAILURE FACTORS

1.Reengineering too many processes at initial stages

• Top management may be so impressed with the achievements of BPR in other organizations that it makes the mistake of initiating the reengineering of too many processes simultaneously.

• The BPR leader due to his or her other commitments, may not be in a position to devote enough time to guide the process owners and monitor their activities.

• The IT facilities may be too inadequate to handle too many IT-enabled processes simultaneously.

Advantages of reengineering a few key processes at initial stages.

• Availability of adequate time for the leader to focus on reengineering.

• In-depth experience with a few process facilities successful implementation of more processes in future.

• Sensing of behavioral and attitudinal aspects at initial stages provides steps for addressing them.

2.Inadequate training of process owners and team members

• Training should lay stress on transforming task-oriented mindset of trainees to process oriented thinking.

• Training in reengineering cannot be under taken in the form of a standard training package.

• The training materials should be prepared in such a way that the participants are able to relate these inputs to their organizational environment and the kind of work they are doing.

Prepare action plan:

• What - ( line of action)

• When- ( Time)

• Who- ( Concerned agency)

• How- ( Mode of Action)

Action plan guidelinesWhat, when, who, how

Group action plans

Group 1 Group 3Group 2

Presentation of group action plans

Preparation of combined action plan

Presentation of combined action plan to BPR leader

Modification of action plan by BPR leader

Final action plan

Core groups should…

• Highlight the limitations of some of the existing processes and their adverse impact on organizational performance.

• Explain the objectives and benefits of BPR• Clarify the queries and doubts of those

affected by the introduction of reengineering.

Unclear knowledge of Reengineering

• Why does a company fail to reengineer a process and end up with minor improvements?

5. Improper Monitoring of a Reengineered process.

• A process or a system that initially shows dramatic improvements has a tendency to deteriorate unless ongoing efforts are made to maintain and improve it.

• A reengineered process needs constant monitoring to ensure its desired level of performance.

Ideal pattern of a Reengineered Process

ACTUAL pattern of a Reengineered Process WITHOUT MONITORING

BPRBPR

ACTUAL pattern of a Reengineered Process WITH

MONITORING

BPRBPR

MONITORINGMONITORING

MONITORING

MONITORING…

• Monitoring is particularly relevant in reengineering because people are used to old ways of doing things.

• They are now required to unlearn many of the old practices and adapt themselves to the new ways of performing tasks because reengineering demands new mode of thinking and new ways to work.

• Sub-processes and tasks need constant monitoring so that these are carried out in accordance with the reengineered process.

6. Wastage of time in Detailed process Analysis

• Reengineering team spends too much time in analyzing every minute detail of the process and may find later that many of these are eventually obliterated or drastically modified.

• All they need is to have an overall understanding of the tasks and their relevance to the process as a whole.

7. Fear of Failure

• BPR never succeeds in an organization where the team members are afraid of failure.

• It is a journey undertaken for the first time.

• Fear of failure curbs the quality of outcome and compels the BPR team to settle for a solution which is sub-optimal but safe.

8.Unfavourable Organizational environment

• Organization characterized by a large majority of people who are skeptical and apprehensive about BPR will find it extremely difficult to succeed in its reengineering activities.

• Top management should highlight the deficiencies and inadequacies of the existing processes through different means of communication.

Unfavorable…..

• Top management should convince the middle and junior level managers because they are the ones who are directly affected by BPR.

• Convincing of supervisors, workers, staff members by middle and junior level managers.

9. Delay in showing results

• Top management may loose interest if a process takes longer time to show results.

• Initial efforts should , therefore, focus on those key processes that need little investment and can be reengineered quickly.

10. Improper Appraisal System

• Rewards should commensurate with efforts and the organization gain.

• Significant rewards makes others to show their keenness to get involved in reengineering.

• Appraisal should be in terms of their contribution.

11. Inability to quantify Improvement

• Unless improvement resulting from reengineering is measured and shown in quantitative terms, people will not attach much importance to it.

• Even in quantification, improvement should be dramatic.

12.Complacency management

• Some one at top level with a vision or a catalyst at junior level must take initiative to convince top management that what looks fine today may not be so tomorrow.

• Reengineering is an ongoing experiment.

13. Non availability of Adequate Resources

• Resource requirements in terms of manpower, technology etc. should be carefully enlisted.

14.Limited awareness amongst employees

15.Discontinuance of Reengineering after achieving Benchmark

CHANGE MANAGEMENT

• BPR deviates from traditional function oriented vertical organisational structure to process focused, team work based horizontal organisational structure consisting of cross-functional teams, task forces or project teams.

• Change is the one constant in any organisation.

• By managing change effectively, the managers can control change instead of letting it control them.

• The current trend in organisational change is toward development of learning organisation.

Sources of change

• External sources: political, social, technological, economic environment.

• Internal sources: managerial policies or styles, systems and procedures, processes, methods and employee attitudes.

Types of change

• Strategic :• Structural:• Process oriented:• People oriented:

Rates of change

• Evolutionary change

• Revolutionary change

Forces for change

• Nature of the work force• Technology• Economic shocks• Competition• Social trends• World politics

The change sequence

Recognizing the need for change

Identifying the change method

Unfreezing the status-quo

Moving to a new condition

Refreezing to create a new status quo

FEED BACK

TYPES OF CHANGE

• Work change• Planned change/ Reactive change• Technological change

Resistance to change

• Resistance can be overt, implicit, immediate, deferred.

• Change triggers rational and irrational emotional reaction because of the uncertainty involved.

Why do people resist change……?

Reasons for resisting change :

• Parochial Self-Interest• Misunderstanding and lack of trust• Different assessments• Low tolerance for change

Sources of resistance to change

• Insecurity• Possible social loss• Economic losses• Inconvenience• Resentment of control• Unanticipated repercussions• Threats to influence

Approaches for reducing resistance to change

• Provide information in advance• Encourage participation• Guarantee against loss• Make only necessary changes• Attempt to maintain useful customs and informal

norms• Build trust• Provide counseling• Allow for negotiation

Why change efforts fail?

• Faulty thinking• Inadequate process• Lack of resources• Lack of acceptance and commitment• Lack of time and poor timing• A resistant culture

Innovation and change

• All innovations imply change, but not all changes are innovations.

Six step model for planned change or innovation

PERCEIVING AN OPPORTUNITY OR

A PROBLEM

DIAGNOSING THE SITUATION AND

GENERATING IDEAS

PRESENTING A PROPOSAL AND

ADOPTING THE CHANGEOR INNOVATION

PLANNING TO OVERCOME

RESISTANCE TOCHANGE ORINNOVATION

IMPLEMENTINGTHE CHANGE OR

INNOVATION

MONITORING ANDEVALUATING

RESULTS

Managing change

• As change agents managers must be committed to improve their organizations performance.

• Change means making things different whereas planned change involves activities that are intentional and goal oriented.

What change agents can do?

• Structure• Technology• Physical setting• People

Change agents can bring about changes in:

Implementing change successfully

• By transformational leadership• By use of group forces• By providing a rationale for change• By participation• By sharing rewards• By ensuring employee security• By communication and education• By stimulating employee readiness

Management of change in business process reengineering

• Assembling a change management team• Establishing a new direction for the organisation• Preparing the organisation for change• Setting up teams to implement change• Aligning structures, systems and resources to

support change• Identifying and removing road blocks to change• Absorbing changes into the culture of the

organisation.

BENCHMARKING

What is Benchmarking?

• Benchmarking is the continuous, Systematic process of measuring one’s output and or work processes against the toughest competitors or those recognized best in the Industry.

Meaning of Benchmarking.

• Benchmarking is a systematic method by which organizations can measure themselves against the best industry practices .

• “Benchmarking is the process of gathering ,analyzing and evaluating the world outside your organization and comparing it to you own.”

Time Type Description

First Generation Reverse Engineering Reverse engineering (RE) is the process of discovering the technological principles of a device, object or system through analysis of its structure, function and operation.

Second Generation Competitive Benchmarking Continuous process of comparing a firm's practices and performance measures with that of its most successful competitors.

Third Generation Process Benchmarking The initiating firm focuses its observation and investigation of business processes with a goal of identifying and observing the best practices from one or more benchmark firms.

Fourth Generation Strategic Benchmarking Involves observing how others compete.

Fifth Generation Global Benchmarking Benchmarking with the partners across the globe

Evolution of Benchmarking

Helping to identify the current position of your business and determine priorities for improving environmental performance.

Allowing comparisons with previous benchmarking profiles and against recognized best practice.

Encouraging regular monitoring of progress and a programme of continuous improvement.

Increasing the competitiveness of your company by demonstrating environmental improvements to customers and shareholders.

Four key steps in the application of Benchmarking.

1. Understand in detail existing business process.

2. Analyze business processes of others.3. Compare own business performance with

that of others analyzed.4. Implement the steps necessary to close the

performance gap.

Sources for partners

• Direct competitors

• Functional leaders

• Internal operations

• Generic processes

Types of Benchmarking

TYPES OF BENCHMARKING

• Strategic Benchmarking • Performance or competitive Benchmarking • Process Benchmarking • Functional Benchmarking• Internal Benchmarking • External Benchmarking• International Benchmarking

Strategic Benchmarking

• Used where organization seek to improve their overall performance by examining the long term strategies and general approaches that have enabled high performers to succeed.

• It involves considering high level aspects such as core competencies, developing new products and services, and improving capabilities of dealing with changes in the background environment.

Performance or competitive Benchmarking

Used where organization consider their position in relation to performance characteristic of key products and services.

Benchmarking partners are drawn from the same sector.

It is common for companies in the commercial World to undertake this type of benchmarking through trade associations or third parties to protect confidentiality.

Process Benchmarking

• It is used when the focus is on improving specific critical process and operations.

• Benchmarking partners are sought from best practice organizations that perform similar work or deliver similar services.

• Process benchmarking invariably involves producing process maps to facilitate comparison and analysis

Process Benchmarking…..

The initiating firm focuses its observation and investigation of business processes with a goal of identifying and observing the best practices from one or more benchmark firms.Activity analysis will be required where the objective is to benchmark cost and efficiency; increasingly applied to back-office processes where outsourcing may be a consideration.

Functional Benchmarking• A company will focus its benchmarking on a single

function in order to improve the operation of that particular function. Complex functions such as Human Resources, Finance and Accounting and Information and Communication Technology are unlikely to be directly comparable in cost and efficiency terms and may need to be disaggregated into processes to make valid comparison.

• Used when organization look to benchmark with partners drawn from different business sectors .

• This sort of benchmarking can lead to innovation and dramatic improvements.

Internal Benchmarking

• This involves seeking partners from within the same organization .

• Advantages of internal benchmarking are that :Access to sensitive data and information is easier. standardized data is often readily available. less time and resources are needed.

External Benchmarking

• This involves seeking outside organizations that are known to be the best in class.

• This type of benchmarking may take up more time and resources to ensure the comparability of data and information, credibility of findings and development of sound recommendations.

International Benchmarking

• This benchmarking is used where the partners are sought from other countries because best practitioners are located else where in the world .

• Globalization and advances in information technology are increasing opportunities for international projects.

Process of Benchmarking

• Stage 1 : Planning the Benchmarking Project.

• Stage 2 : Form the Benchmarking team.

• Stage 3 : Collect the necessary data.

• Stage 4 : Analyzing the data for performance gaps.

• Stage 5 : Take action and recycle the process

Stage 1 : Planning the Benchmarking Project.

Plan the exercise.

Objective of planning stage of benchmarking is to determine what to benchmark.

To identify the strategic intent of the business unit being benchmarked.

To improve performance through benchmarking.

To select the processes to benchmark.

The key to determining what to benchmark lies in identifying the output or out come of the business unit.

Selecting the critical success factors.

Stage 2 : Form the Benchmarking team.

• Objective of this stage is to select , train and manage the benchmarking team.

• A team represents different perspectives, special skills that individual bring to the benchmarking process.

• There are 3 types of teams required for benchmarking exercise :

1) The lead team2) The preparation team3) The visit team

Stage 3 : Collect the necessary data.

• To identify best practice companies and gather benchmarking information about their performance and practices.

• This stage involves collection of information regarding:-.

1) How do you currently perform theprocess?

2) How does your benchmarking partner perform the process?

3) Site visit.

Stage 4 : Analyzing the data for performance gaps.

• To identify and analyze the gaps between the best practices and your own business process.

• All the collected information is used to identify performance gaps between benchmarking partners.

Stage 5 : Take action and recycle the process

• To develop strategies and action plans to bridge the gaps.

• Identify tasks, responsibilities, resources and time targets and for the change process.

• Prepare cost benefit analysis.

Advantages and Limitations of Benchmarking

Advantages of Benchmarking• Helping to identify the current position of your

business and determining priorities for improving environmental performance.

• Allowing comparisons with previous benchmarking profiles and against recognized the best practices.

• Encouraging regular monitoring of progress and a programmed of continuous improvement.

• Increasing the competitiveness of your company by demonstrating environmental improvements to customers and shareholders.

Limitations of Benchmarking• Weakness in planning and implementation can lead to

failure of the process.

• Communication failure between partners can occur.

• Process may not be successful if the goal is too ambitious.

• Some organizations do not benchmark because their weaknesses are exposed.

• There might be cultural difficulties in transferring “best practices” in multilateral organizations.

Benchmarking Costs

Costs are :

• Visit Costs

• Time Costs

• Benchmarking Database Costs

Visit costs

• This cost includes hotels rooms, travel costs, meals, a token gift and lost labor time.

Time cost

• Members of the benchmarking team will be investing time in researching problems finding exceptional companies to study, visits and implementation.

Benchmarking database costs

• Organizations that institutionalize benchmarking into their daily procedure find it is useful to create and maintain a database of best practices and the companies associated with each best practice.

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