Business Process Re-engineering

Business Process Reengineering

A Practical Guide to Positive Change

Business Process Reengineering 2

Agenda

• Background• Process Complexity• A Practical Approach to BPR• Applying BPR to Software Selection• Q & A


Background

• Most organizations want to:– Improve efficiency– Improve customer service– Simplify operations– Reduce costs


Background

• Organizations often look to:– Computer systems and software– Additional staff


Background

• This often results in:– Greater challenges– Greater expense

• Without meeting the original goals


Background

• The term ‘Business Process Reengineering’ was first coined in 1990 by Michael Hammer in the Harvard Business Review

• The main idea is to eliminate work that doesn’t add value, rather than automate it

• BPR provides a framework for development and deployment of information systems within the context of simplifying operations and reducing costs


Background

• My experience with BPR goes back a little further…

• Hewlett Packard in the early 1980’s:– Driving a renaissance of quality & customer

service– Yokagowa HP & W. Edwards Demming• Demming Prize

– Tom Peters ‘In Search of Excellence’– Total Quality Control (TQC)


Background

• HP’s Roseville Division– Extensive work with process & quality

improvement– High mix – low volume manufacturing– Created a predecessor to BPR – Had the insight to compare the distance a product

travels with the dimensions of the building


Process Complexity

Length

Wid

th

Building Floor Plan


Avoid Complex Processes

• Dimensions of building compared to length of process

• Number of stops, translations, workarounds• Time in transit• Number of places where information can be

lost• Complex decision processes cause errors &

rework


Keep It Simple

Length

Wid

th

Building Floor Plan


Re-engineering?

• The name suggests that processes were ‘engineered’ in the first place

• Sometimes true, but most likely not• Processes tend to grow and change over time

in an organic fashion


Process Growth & Change

• Processes grow and change over time• Most are simple to begin with• Organizations start with ‘One thing’, then

move on to ‘Two things’, ‘Three things’, etc.• Exception handling is added• Key knowledge becomes siloed in various

parts of the organization• Key knowledge often leaves with turnover


Simple Beginnings

Length

Wid

thBuilding Floor Plan

1


Adding An Option

Length

Wid


1


Broadening Your Offering

Length

Wid


1


Adding Systems

Length

Wid


1

2


Micro-Managing

Length

Wid


1

2


Human Nature - Short Cuts & Workarounds


Common Outcomes

• Short cuts & workarounds are added• Key knowledge is lost or is in-accessible• No one knows the whole process• Customer satisfaction goes down• Employee satisfaction goes down• Costs go up• Process won’t scale


What to Do?

The Four Steps:• Understand• Document• Simplify• Automate


Understand

• Understand what is happening in your organization right now

• Organizations often think they understand their processes, but can be surprised!

• One department often doesn’t know what the others do

• The Four Questions


The Four Questions

• Who are my customers?– External?– Internal?

• What is my product or service?• What is my process for delivering my product

or service?• How can I improve my product or service?


What Should You Ask?

• How is the system being used?• Where are the bottlenecks?• Where are errors commonly made?• What are the workarounds?– Spreadsheets?– Documents?– Notes/emails?

• Where is data being reentered?


Capture Ideas

• Activities to start?• Activities to stop?• Activities to continue?• What’s working?• What’s not working?


Questionnaire


Document

• Document what’s happening now• If we can’t document it, then we haven’t

understood it• Highlights duplicate processes• Highlights gaps in knowledge• Helps create a shared understanding


Diagrams & Documents


Simplify

• Identify processes that don’t add value• Simplify where possible• Eliminate duplication of effort


Simplify


Automate

• Can be existing or new systems• Can eliminate manual processes to reduce

time and errors• Don’t have humans do things a computer can• Keep/Make/Buy decisions• Software selection process


Deployment OptionsCloud/Vendor Hosted

Client Hosted

• Simplifies client infrastructure and management

• Lower up-front costs• Higher up-time of the application• Data security, backup and restore

is build in• Easier to manage access beyond

the building’s boundaries• Requires good internet access

• Traditional approach that most IT operations are comfortable with

• Can create a more secure feeling – we own/control the data

• Higher upfront costs• More infrastructure &

management required• Can be lower up-time


Process Improvement

• Selecting an issue• Brainstorming• Prioritizing• Cause-Effect Analysis• Brainstorm Solutions• Implement a Solution• Monitor & Stabilize


Process Improvement - Cycle

Brainstorm Cause & Effect

Create an Issue /

Opportunity List

Brainstorm Solutions

Implement Improvement

Monitor & Stabilize or

Change Approach

Prioritize Issues


Brainstorm Issues

• Generate as many ideas as possible in 20-30 minutes

• Don’t debate or change ideas (quantity more important than quality)

• Encourage everyone to participate – go around the room

• Keep going until all the ideas have been presented


Prioritizing

Consider various aspects of each issue:• Importance/benefit of an improvement• Penalty• Cost• Time• Risk


Prioritizing - Methods

Goal is to find the most important issue• Gut feel – fastest but can be biased• Trial & error – make the list ‘look right’• Priority groups – high, medium & low• Bubble sort – thorough & fairly simple• Prioritization matrix – most thorough – ranks

issues according to criteria


Bubble-Sort Prioritizing

• Start at the bottom position• Compare the item on the bottom with each of

those above• If the bottom item is a higher priority with it’s

comparison item, swap them• Continue comparing the bottom item until you’ve

compared all the way to the top• Move up to the second to the last item & repeat• Repeat until you’ve moved up to the top of the list


Cause/Effect Analysis

The 4 Categories (4 M’s)• Man• Machine• Materials• Methods


Fish-Bone Diagram

Example: Data takes too long to move from shops to foundation

Man

Machine

Mat

eria

ls

Met

hods

No integration

In-box not clearly labeled

No training

Poor form layout

Turnover

Lost form

No security


Brainstorm Solutions

• Same approach...• Prioritize…• Can start with low $ / low risk first


Implement Solution

• Pick an implementation team– Key stakeholders– The right disciplines

• Can be phased• Remember the 4 M’s


Monitor & Stabilize

• Monitor key process measures– Time to complete something– Error rate– Time spent in re-work

• Stabilize– Train & manage for consistent results– Understand out of bounds data– Implement minor corrections

Applying BPR to Software Selection

A Managed Approach


Why is it important? Early Influences

• IT – Definition of system failure:– Not being used

• Auto industry experience– Auto workers – if they don’t like it, it will break

• Aviation industry experience– It must not break– Critical systems


Software Satisfaction

• Two choices:– Adapt your process to fit the software– Select/Configure/Customize the software to fit

your process• If the process is core to your mission, the

latter is much better


Kano Model


Methodology

• Based on Business Process Reengineering• We recommend 6 steps:

1: Preparation (Understand, Document, Simplify)2: Evaluation3: Selection4: Planning5: Implementation (Automate)6: Monitor, stabilize & enhance

• Scalable to client needs


Benefits

• The BPR process raises the team awareness with what you’re looking for and why

• Takes current technology into account• Reduces vendor bias• Reduces the chance of buying vaporware• Ensures the best software fit with your

organization


Step 1: Preparation• Select the project team & roles (those that will be involved in the selection process)• Review your organization’s mission and objectives• Interview the existing users and document the existing processes• Interview the stakeholders beyond the system boundaries & document

needs/concerns• Identify integration points with other systems• Identify gaps and workarounds such as spreadsheets, documents, emails, etc.• Simplify or eliminate process steps where possible• Conduct an IT review of the existing servers, network & workstations• Evaluate the organizations IT plans for growth and new technology (Cloud, Mobile,

BYOD, etc.)• Evaluate deployment options (Client hosted, vendor hosted, SaaS)• Develop the software business case (Optional)• Develop a shared vision for the new system• Develop preliminary budget


Step 2: Evaluation• Gather & prioritize requirements• Create a Request for Proposal (RFP) document• Create an initial list of potential vendors• Define decision criteria• Send out the RFP • Initial review of RFP responses• Schedule demos• Check references• Review customer support and service (vendor, reseller, consultant, ect)• Review Implementation expertise• Review vendor stability (financial, business plans, leadership team, customer base)• Review vendor product/technology roadmap• Review Total Cost of Ownership (TCO)• Fit/Gap analysis• Review 1 to 5 year budget for each vendor• Trim the list of potential vendors


Step 3: Selection• Inviting shortlisted vendors for a site visit• Review further demos• Evaluate implementation plans• Identify the best-fit solution• Audit the selection process• Management approval• Internal selection announcement• Notify winning and losing vendors• Legal review of contract• Negotiate contract• Initial data conversion strategy


Step 4: Planning• Refine implementation plan & develop milestones & schedule• Review & negotiate any scope changes• Review/Finalize data conversion strategy• Review/Finalize implementation plan & schedule• Develop training plan• Plan for parallel operation of new & old systems


Step 5: Implementation• Implementation kickoff• Track progress vs. schedule & milestones• Execute training plan• Execute data conversion• Verify integration with other systems• Verify & signoff on new system• Go-live on new system• Ramp up users on new system• Restrict access to old system


Step 6: Monitor, Stabilize & Enhance

• Review system acceptance (user feedback)• Collect issues/change requests• Report issues/change requests to vendor• Conduct additional training• Implement fixes/enhancements


Questions & Answers

?


Contact Info

We’re happy to help you with any of your BPR needs!

Monument Cloud Solutions [email protected]

www.monumentcloud.com

mailto:[email protected]

Business Process Re-engineering

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Transcript of Business Process Re-engineering