Group 13_Business Process Re Engineering

8/4/2019 Group 13_Business Process Re Engineering

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Business Process Re-engineering

Quality Management Page 1

ASSIGNMENT

QUALITY MANAGEMENT

BUSINESS PROCESS RE-ENGINEERING

Submitted by: GROUP No. 13 (MBA-I, B-Batch) Submitted to:

Rohit Raghvan, 075 Prof. P.N. Parmeshwaran

Ritu Rajpal, 076 SIOM, Nashik

Shalini Ranjan, 077

Revanth Prakash, 078

Vinod S. ,079

Mohit Sadhotra, 080


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Table of Contents

Topic Page No.

1. Introduction... 31.1Michael Hammers definition of BPR31.2History41.3What is Re-engineering..61.4Process Improvement(TQM) v/s Process Innovation (BPR)81.5What to Re-engineer...81.6Objectives of BPR91.7Methodology of a BPR Project Implementation.10

2. Application132.1How can BPR be applied to an Organization132.2Where the technique has been applied132.3Types of firms/organizations where BPR can be applied.142.4Duration and implementation cost of BPR..142.5 Implementation of BPR: CASES.15

3. Implementation Procedure of BPR.233.1Steps/Phases of a BPR Project233.2Barriers to effective implementation of BPR.25

4. Benefits of BPR27Bibliographic References29


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1.INTRODUCTION1.1 Michael Hammer's definition of BPR

According to Michael Hammer, one of the BPR gurus and founder of the term itself, BPR is 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. This definition is one of the most cited ones and can be found in a considerable

number of journal articles. Furthermore, Hammer considers four keywords within that

definition as being the most relevant ones, as there are:

Fundamental

Two questions are considered as being fundamental and are addressing the companies

justification of existence: What are we doing? And why are doing so? As Hammer points out,

forcing people to question the way they do business leads to rules turning out to be obsolete,

erroneous and inappropriate. Reengineering means starting from scratch, no assumptions given


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and no current fact accepted and determines firstly what a company has to do, and secondly

how to do it.

Radical

Radical redesign of business processes means getting to the root of things, not improving

existing procedures and struggling with sub-optimizing. According to Hammer, radical redesign

means disregarding all existing structures and procedures and inventing completely new ways

of accomplishing work.

Dramatic

Reengineering is no way for achieving marginal improvements and fine-tuning. It is intended to

achieve heavy blasting.

Processes

Process-orientation is considered as being the most important aspect of BPR. Hammer claims,

that most companies are focussed on tasks, people and structures rather than processes.

Despite this rather populistic definition, the following paragraphs will provide a more humble

definition of the BPR-concept and a brief description of a sample methodology.

1.2 History

In todays ever-changing world, the only thing that doesnt change is change itself. In a world

increasingly driven by the three Cs: Customer, Competition and Change, companies are on the

lookout for new solutions for their business problems. Recently, some of the more successful

business corporations in the world seem to have hit upon an incredible solution: Business

Process Reengineering (BPR).

Business process reengineering (BPR) began as a private sector technique to

help organizations fundamentally rethink how they do their work in order to dramatically

improve customer service, cut operational costs, and become world-class competitors. A key

stimulus for reengineering has been the continuing development and deployment of


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sophisticated information systems and networks. Leading organizations are becoming bolder in

using this technology to support innovative business processes, rather than refining current

ways of doing work.

Old Wine in New Bottles

The concept of reengineering traces its origins back to management theories developed as

early as the nineteenth century. The purpose of reengineering is to make all your processes the

best-in-class." Frederick Taylor suggested in the 1880's that managers use process

reengineering methods to discover the best processes for performing work, and that these

processes be reengineered to optimize productivity. BPR echoes the classical belief that there isone best way to conduct tasks. In Taylor's time, technology did not allow large companies to

design processes in a cross- functional or cross-departmental manner. Specialization was the

state-of-the art method to improve efficiency given the technology of the time.

In the early 1900's, Henri Fayol originated the concept of reengineering: To conduct the

undertaking toward its objectives by seeking to derive optimum advantage from all available

resources. Although the technological resources of our era have changed, the concept still

holds. About the same time, another business engineer, Lyndall Urwick stated "It is not enough

to hold people accountable for certain activities, it is also essential to delegate to them the

necessary authority to discharge that responsibility." This admonition foreshadows the idea of

worker empowerment which is central to reengineering.

According to Thomas Davenport, "classical reengineering" repeats the same mistakes as the

classical approach to management, by separating the design of work from its execution.

Typically, a small reengineering team, often from outside the company, designs work for the

many. The team is fuelled by assumptions such as "There is one best way to organize work; I

can easily understand how you do your work today; I can design your work better than you can;


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There is little about your work now that is worth saving; You will do your work the way I

specify."

1.3 What is Re-engineering?

Reengineering is 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. BPR advocates that enterprises go back to the basics and re

examine their very roots. It doesnt believe in small improvements. Rather it aims at total

reinvention. As for results: BPR is clearly not for companies who want a 10% improvement. It is

for the ones that need a ten-fold increase. According to Hammer and Champy, the last but the

most important of the four key words is the word-process. BPR focuses on processes and not

on tasks, jobs or people. It endeavours to redesign the strategic and value added processes that

transcend organizational boundaries.

Reengineering starts with a high-level assessment of the organization's mission, strategic goals,

and customer needs. Basic questions are asked, such as "Does our mission need to be


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redefined? Are our strategic goals aligned with our mission? Who are our customers?" An

organization may find that it is operating on questionable assumptions, particularly in terms of

the wants and needs of its customers. Only after the organization rethinks what it should be

doing, does it go on to decide how best to do it. Within the framework of this basic assessment

of mission and goals, reengineering focuses on the organization's business processesthe steps

and procedures that govern how resources are used to create products and services that meet

the needs of particular customers or markets. As a structured ordering of work steps across

time and place, a business process can be decomposed into specific activities, measured,

modeled, and improved. It can also be completely redesigned or eliminated altogether.

Reengineering recognizes that an organization's business processes are usually fragmented into

sub processes and tasks that are carried out by several specialized functional areas within the

organization. Often, no one is responsible for the overall performance of the entire process.

Reengineering maintains that optimizing the performance of sub processes can result in some

benefits, but cannot yield dramatic improvements if the process itself is fundamentally

inefficient and outmoded. For that reason, reengineering focuses on redesigning the process as

a whole in order to achieve the greatest possible benefits to the organization and their

customers. This drive for realizing dramatic improvements by fundamentally rethinking how the

organization's work should be done distinguishes reengineering from process improvement

efforts that focus on functional or incremental improvement


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1.4 Process Improvement (TQM) versus Process Innovation (BPR)

Improvement Innovation

Level of Change Incremental Radical

Starting Point Existing Process Clean Slate

Frequency of Change One-time/Continuous One-time

Time Required Short Long

Participation Bottom-Up Top-Down

Typical Scope Narrow, within functions Broad, cross-functional

Risk Moderate High

Primary Enabler Statistical Control Information Technology

Type of Change Cultural Cultural/Structural

1.5 What to Re-engineer?

According to many in the BPR field reengineering should focus on processes and not be limited

to thinking about the organizations. After all the organization is only as effective as its

processes. So, what is a process? A business process is a series of steps designed to produce a

product or a service. It includes all the activities that deliver particular results for a given

customer (external or internal). Processes are currently invisible and unnamed because people

think about the individual departments more often than the process with which all of them are

involved. So companies that are currently used to talking in terms of departments such as

marketing and manufacturing must switch to giving names to the processes that they do such


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that they express the beginning and end states. These names should imply all the work that

gets done between the start and finish. For example, order fulfillment can be called order to

payment process .

Talking about the importance of processes just as companies have organization charts, they

should also have what are called process maps to give a picture of how work flows through the

company. Process mapping provides tools and a proven methodology for identifying your

current As-Is business processes and can be used to provide a To-Be roadmap for reengineering

your product and service business enterprise functions. It is the critical link that your

reengineering team can apply to better understand and significantly improve your business

processes and bottom-line performance.

Having identified and mapped the processes, deciding which ones need to be reengineered and

in what order is the million-dollar question. No company can take up the unenviable task of

reengineering all the processes simultaneously. Generally they make their choices based on

three criteria: - dysfunction: which processes are functioning the worst? Importance: which are

the most critical and influential in terms of customer satisfaction; feasibility: which are the

processes that are most likely to be successfully reengineered?

1.6 Objectives of BPR

When applying the BPR management technique to a business organization the implementation

team effort is focused on the following objectives:

Customer focus. Customer service oriented processes aiming to eliminate customer

complaints.

Speed. Dramatic compression of the time it takes to complete a task for key business

processes. For instance, if process before BPR had an average cycle time 5 hours, after BPR the

average cycle time should be cut down to half an hour.

Compression. Cutting major tasks of cost and capital, throughout the value chain. Organizing

the processes a company develops transparency throughout the operational level reducing


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cost. For instance the decision to buy a large amount of raw material at 50% discount is

connected to eleven cross checkings in the organizational structure from cash flow, inventory,

to production planning and marketing. These checkings become easily implemented within the

cross-functional teams, optimizing the decision making and cutting operational cost.

Flexibility. Adaptive processes and structures to changing conditions and competition. Being

closer to the customer the company can develop the awareness mechanisms torapidly spot the

weak points and adapt to new requirements of the market.

Quality. Obsession with the superior service and value to the customers. The level of quality is

always the same controlled and monitored by the processes, and does not depend mainly on

the person, who servicing the customer.

Innovation. Leadership through imaginative change providing to organization competitive

advantage.

Productivity. Improve drastically effectiveness and efficiency. In order to achieve the above

mentioned adjectives the following BPR project methodology is proposed.

1.7 Methodology of a BPR Project Implementation

BPR is world-wide applicable technique of business restructuring focusing on business

processes, providing vast improvements in a short period of time. The technique implements

organizational change based on the close coordination of a methodology for rapid change,

employee empowerment and training and support by information technology. In order to

implement BPR to an enterprise the followings key actions need to take place:

Selection of the strategic (added-value) processes for redesign. Simplify new processes - minimize steps - optimize efficiency -. (Modeling). Organize a team of employees for each process and assign a role for process

coordinator.

Organize the workflow - document transfer and control.


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Assign responsibilities and roles for each process. Automate processes using IT(Intranets, Extranets, Workflow Management) Train the process team to efficiently manage and operate the new process Introduce the redesigned process into the business organizational structure

Most reengineering methodologies share common elements, but simple differences can have a

significant impact on the success or failure of a project. After a project area has been identified,

the methodologies for reengineering business processes may be used. In order for a company,

aiming to apply BPR, to select the best methodology, sequence processes and implement the

appropriate BPR plan, it has to create effective and actionable visions. Referring to 'vision' we

mean the complete articulation of the future state (the values, the processes, structure,

technology, job roles and environment)

For creating an effective vision, five basic steps are mentioned below.

- The right combination of individuals come together to form an optimistic and energized team

- Clear objectives exist and the scope for the project is well defined and understood

- The team can stand in the future and look back, rather than stand in the present and look

forward

- The vision is rooted in a set of guiding principles.

All methodologies could be divided in general 'model' stages:

The Envision stage: the company reviews the existing strategy and business processes and

based on that review business processes for improvement are targeted and IT opportunities are

identified.

The Initiation stage: project teams are assigned, performance goals , project planning and

employee notification are set.

The Diagnosis stage: documentation of processes and sub-processes takes place in terms of

process attributes (activities, resources, communication, roles, IT and costs).

The Redesign stage: new process design is developed by devising process design alternatives

and through brainstorming and creativity techniques.


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The Reconstruction stage: management technique changes occur to ensure smooth migration

to the new process responsibilities and human resource roles.

The Evaluation stage: the new process is monitored to determine if goals are met and examine

total quality programs.

Figure 1: The overall BPR Methodology


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2.APPLICATION2.1 How can BPR be applied to an organization?When British Telecom had announced their Business Plan, all competitors were eager to find

out who would be the new CEO of the organization. To the surprise of all the new CEO it was

the customer. The company had decided to transform all the operations of the organization the

way customers wanted them to operate. The most important action in applying BPR is the

company's strategic goal to provide customer oriented services. BPR is a technique used to

implement this type of organizational structure. Having the management commitment for

change, another very important factor for implementing BPR, is the enabling role of

Information Technology. The way that businesses are organized around departments is very

logical since, for instance, there were physical barriers in the communication of the accounting

department with production department. (The warehouse could be in another location in the

another part of the city). So it wasn't possible for a cross-functional team to communicate

efficiently. In the 90s when telecommunication technologies were becoming abundant and low

costing BPR was becoming a world-wide applicable managing technique for business upgrade,

enabled by the technology. Employees can easily operate as a team using intranets/extranets,

workflow and groupware applications, eliminating distances. We can work together even

though we are located in different places.

2.2 Where the technique has been applied

Many public and private sector organizations and SMEs Word-wide had undergone major

Re-engineering efforts. The technique was applied first to multinational co-operations, such

as IBM, AT&T, SONY, GENERAL ELECTRIC, WALL MART, HEWLLET PACKARD. Later, the banking

sector began to reengineer with a great degree of success such as CITIBANK, NORTHWESTERN

BANK, BANK OF AMERICA and others. BPR is also being used to change the organizational

structure of public services. First the government cabinet of Egypt reengineered its processes


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along with many Municipals in Europe. As the technique was becoming well known to the

business sector smaller enterprises were using the technique for organizational upgrade. Today

most SMEs are investigating the re-engineering technique and a lot of them are applying re-

engineering, since the technique is applicable and affordable to almost all SMEs. This is proved

by the increasing demand for BPR consultants in Greece and worldwide. Most of the times re-

engineering is applied as a "must" when innovative IT tools are introduced to SMEs.

2.3 Types of firms / organizations where BPR can be applied

BRP could be implemented to all firms (manufacturing firms, retailers, services, etc.) and public

organizations that satisfy the following criteria:

Minimum Number of employees: 20 (at least 4 in management positions). Strong management commitment to new ways of working and innovation. Well formed IT infrastructure

Business Process Reengineering could be applied to companies that confront problems

such as the following:

High operational costs Low quality offered to customers High level of ''bottleneck" processes at pick seasons Poor performance of middle level managers Inappropriate distribution of resources and jobs in order to achieve maximum

performance, etc.

2.4 Duration and implementation cost of BPR

Duration

The BPR technique, in general, is not a time consuming process. The duration of each BPR

project varies from 6 -to 10 months.


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Implementation Cost

The implementation of a BPR project consists of two stages:

1. The process management and redesign study and consulting stage.2. The implementation of the redesigned process using IT tools including employee training and

introduction of the new processes to the company organizational structure.

The cost of a BPR for projects applied to SMEs for selective processes varies depending on the

complexity of the business environment and the number of processes for reengineering In

general, the following cost is applicable for each stage.

2.5 Implementation of BPR: CASES

2.5.1 M&M's Problem Plants

In the mid-1990s, India's largest multi utility vehicle (MUV) and tractor manufacturer M&M was

facing serious problems at its Igatpuri and Kandivili plants in Maharashtra. The plants were


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suffering from manufacturing inefficiencies, poor productivity, long production cycle, and sub-

optimal output. The reason: highly under-productive, militantly unionized, and bloated

workforces. The company had over the years been rather lenient towards running the plants

and had frequently crumbled under the pressure of union demands. The work culture was also

reportedly very unhealthy and corruption was widespread in various departments. Alarmed at

the plant's dismal condition, Chairman Keshub Mahindra tried to address the problem by

sacking people who allegedly indulged in corrupt practices.

M&M also tried to implement various voluntary retirement schemes (VRS), but the unions

refused to cooperate and the company was unable to reduce the labor force.

During this period, M&M was in the process of considering the implementation of a Business

Process Reengineering (BPR) program throughout the organization including the manufacturing

units. Because of the problems at the Igatpuri and Kandivili plants, M&M decided to implement

the program speedily at its manufacturing units. The program, developed with the help of the

UK-based Lucas Engineering Systems, was first implemented on an experimental basis at the

engine plant in Igatpuri. Simultaneously, an exercise was initiated to assess the potential

benefits of implementing BPR and its effect on the unions. M&M's management was not

surprised to learn that the unions expressed extreme displeasure at the decision to implement

BPR and soon went on a strike. However, this time around, the management made it clear that

it would not succumb to union demands. Soon, the workers were surprised to see the

company's senior staff come down to the plant and work in their place. With both the parties

refusing to work out an agreement, observers began casting doubts on the future of the

company's grand plans of reaping the benefits of BPR.

2.5.2 BPR in Healthcare

E nvironmental pressure to cut cost and to increase productivity has given in a new face to

TQM in the form of continuous quality improvement and total productivity management

(TPM). In the implementation of TPM, Business Process Reengineering (BPR) plays a core


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role. Globalization has forced different types of production industries to resort to BPR for

reducing the operating cost and maintaining production cost to a level where it remains

competitive. E x ponential rise in the cost of delivery of healthcare services, price

competition, market realignment are the major factors that are forcing hospitals to scrutinize

their business processes and to redesign them in a manner that would not only help to keep

the prices competitive but also help in delivering quality care to the patients.

In early eighties, service environment design and service process design were more focused

on clinical effectiveness and technical efficiency. In late nineties, the focus included patient

customer service ex cellence along with clinical components. The methodology of healthcare

purchase is gradually shifting from cash and carry model to third party payments through

insurance companies and reimbursement schemes.

In such an environment, BPR is a problem-solving approach that emphasizes radical

redesign of business process to achieve dramatic improvements in critical contemporary

measures of performance such as cost, quality, service and speed. The elements of BPR are

to be constrained by total service experience and also should focus on seamless service to

patients across various functional areas in hospital.

The process of BPR is effective to obtain gradual, incremental improvement. In the

healthcare industry, the most dynamic change is technology. With each change in

technology, the methodology of service delivery changes. For example, the process of

gastro intestinal surgeries has shown a major change by the introduction of endoscopy. In

the healthcare industry, new technology acquisition always brings new capabilities to

business, thereby raising the competitive bar and the need to improve business processes

becomes mandatory.

In India where per capita health expenditure is not very high and also healthcare budget is

decreasing, BPR can provide some solution in reducing wasteful processes in government


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health setups. Private hospitals can also get benefit from BPR in containing cost and keeping

the cost within the reach of general masses.

The major factors that are forcing hospitals to utilize concepts of BPR are:

- Delivery of improved service quality to external customers

- Reducing bottlenecks by improving service quality to internal customers

- Improve financial performance by cost cutting

- Improve clinical performance

- Reduce processing time of service delivery

- Adopt the positive experiences of healthcare organizations abroad

- Pressure to comply with regulatory requirements

- To remain competitive with other healthcare organizations

2.5.3 Hitachi Consulting Helps Non-Profit Organization Enhance Its Business Processes

The client, one of the largest faith based organizations in the United States, was facing intense

internal pressure to reduce overhead costs. The organization was also transitioning to a new

management team who wanted to bring enhanced business processes and skills to its non-

profit environment. Our approach included a rapid business assessment, strategic process

implementation and systems selection and implementation. We developed processes for a call

center, donation processing, a balanced scorecard and customer retention programs.

These tools and metrics support the clients business processes and have led to a $13 million

annualized benefit.

The consultant from Hitachi Consulting has an amazing ability to listen, discern, understand

then translate all the insights and concerns from Marketing. He is wise and encouraging and

strives to find a win-win for all stakeholders involved.


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2.5.4 Ford Motor Co. reengineering its accounts payable processes

In the early 1980s, when American automotive industry was in a depression, Fords top

management put accounts payable along with many other departments- under the

microscope in search of ways to cut costs.

At that time, Fords North American accounts payable department employed 500 people. By

using computers to automate such processes, Ford thought it could cut head count by 20%.

Pretty good, thought Fords executives, until they visited Mazda.

The Ford managers noted that the admittedly smaller company took care of its accounts

payable chores with only five people. The contrast Fords 500 people to Mazdas 5- was toogreat to attribute just to the smaller companys size. Finally, to match Mazdas efficiency, Ford

realized that it would have to rethink the entire process in which the accounts payable

department took part.


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Under the old system, a number of paper documents was processed sequentially by 3 functions

who participate in the process indirectly with a work force of 500 clerks to perform many

intermediate steps:

(1) The purchasing function issues a purchase order to the supplier and sends a copy to the

accounts payable function.

(2) Upon arrival of purchased goods, the inventory function sends a copy of the receiving

document to the payable function.

(3) When the invoice from the supplier arrives in the mail, the payable function matches it

against the purchase order and the receiving document before issuing payment to the supplier.

(4) Much of efforts are needed to resolve frequent discrepancies between the documents, and

a total of 14 data items must be checked in the process.

Fords new accounts payable process looks radically different. Accounts payable clerks no

longer match purchase order with receiving document, primarily because the new process

eliminates the invoice entirely. With a work force of only 125, the 3 functions participate in the

process directly by accessing a shared database, eliminating many intermediate steps and

sequential flow of paper documents. The new process looks like this:

(1) The purchase order is entered into the shared database by the purchasing function.

(2) Upon receiving goods, the inventory function accesses the database. If a match is found, the

goods are shipped and the status of the order in the database is updated. Otherwise, the goods

are returned to the sender.

(3) The payable function routinely accesses the database to prepare payment checks for orders

that have changed status, and invoices from suppliers are eliminated.


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(4) Matching and discrepancy resolution of paper documents are no longer needed, and only 3

data items need to be checked in the process.

The basic concept of the change at Ford is simple. Payment authorization, which used to be

performed by accounts payable, is now accomplished at the receiving dock. And the result is a

75% improvement in head count.

2.5.5 IBM Credit Co. Re-engineering its credit approval process

IBM Credit Corporation is in the business of financing the computers, software, and services

that the IBM Corporation sells. The IBM Credit's operation comprises of five steps as follows:

(1) When an IBM field sales representative called in with a request for financing, one of the

operators in the central office wrote down the request on a piece of paper.

(2) The request was then dispatched to the credit department where a specialist checked the

potential borrower's creditworthiness, wrote the result on the piece of paper and dispatched to

the next link in the chain, which was the business practices department.

(3) The business practices department was in charge of modifying the standard loan covenant

in response to customer request. The special terms to the request form would be attached to

the request if necessary.

(4) Next, the request went to the price department where a pricer determined the appropriate

interest rate to charge the customer.

(5) Finally, the administration department turned all this information into quote letter that

could be delivered to the field sales representative.

This entire process consumed six days on average. From the sales representative's point of

view, this turnaround was too long that the customer could be seduced by another computer

vendor. Furthermore, no one would tell where the request was and when it could be done.


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To improve this process, IBM Credit tried several fixes. They decided, for instance, to install a

control desk, so they could answer the sale representative's question about the status of the

request. That is, instead of forwarding the request to the next step in the chain, each

department would return the request to the control desk where an administrator logged the

completion of each step before sending out the request again. This fix did indeed solve the

problem, however, at the expense of adding more time to the turnaround.

Eventually, two senior managers at IBM Credit took a request and walked themselves through

all five steps. They found that performing the actual work took in total only ninety minutes.

Clearly, the problem did not lie in the tasks and the people performing them, but in the

structure of the process itself.

In the end, IBM Credit replaced its specialists - the credit checkers, pricers and so on - with

generalists. Now, a generalist processes the entire request from beginning to end. But, how

could one generalist replace four specialists? The old process design was, in fact, found on a

deeply held (but deeply hidden) assumption: that every bid request was unique and difficult to

process, thereby requiring the intervention of four highly trained specialists. In fact, this

assumption was false; most requests were simple and straightforward: finding a credit rating in

a database, plugging numbers into a standard model, pulling clauses from a file. These tasks fall

well within the capability of a single individual when he or she is supported by an easy-to-use

computer system. IBM Credit therefore developed a new, sophisticated computer to support

the generalists. In most situations, the system provides guidance and data to generalists. In

really tough situations, he or she can get help from a small pool of real specialists who are

assigned to work in the same team.

The new turnaround becomes four hours instead of six days. The company achieved a dramatic

performance breakthrough by making a radical change to the process.


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3. IMPLEMENTATION PROCEDURE OF BPR

3. 1 Steps / Phases of a BPR project

A BPR project consists of specific steps aiming to a successful outcome.. The necessary

steps in a rapid re-engineering methodology are the following as they presented in figure

below.

STEP ZERO - Preparation and Coordination of the project.

Duration: Two days Participants: BPR team, BPR consultants..

Objectives:

To establish a strong management support To explain to the members of the BPR implementation team the implementation

details of the project and their role in the successful outcome in the BPR effort.


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STEP 1 - Business diagnosis & measurements.

Duration: 4 weeks Participants: BPR team, BPR consultants, personnel involved

with processes

Objectives:

To diagnose & identify problematic areas in the current processes To measure the performance characteristics of the current processes based on

measurable factors such as average cycle time, delays, number of mistakes or number

of customer complaints.

STEP 2 - Selection of processes for change and modeling.

Duration: 7 weeks Participants: BPR team, BPR consultants.

Objectives:

To identify the strategic processes that are feasible to change To redesign and model the selected processes

STEP 3 - Technical design of the solution.

Duration: 10 weeks

Participants: BPR team, BPR consultants, IT experts.

Objectives:

To automate modeled business processes (step 2) using networks and workflow tools To redesign and model the selected processes

STEP 4 - Personnel adjustment & training.

Duration: 10 weeks

Participants: Process team members, process coordinator, trainers.

Objectives:

To train personnel in the new ways of working using IT in the redesigned processes. To redesign and model the selected processes


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STEP 5 - Management of change & employee empowerment.

Duration: 1 week

Participants: BPR team, BPR consultants, process team, executive management.

Objectives:

To establish a positive attitude for the change between employees To minimize the resistance to change between employees by empowering their position

based on performance appraisal and bonus systems.

STEP 6 - Introduction of new processes into business operations.

Duration: Day and time are set by executive management

Participants: The whole business organization

Objectives:

To set the time and date of operating under the new processes, emphasizing the factthat working under the old processes is not an acceptable practice.

STEP 7 - Continuous improvement.

Duration: Runs dynamically and continuously after the end of the project

Participants: BPR implementation team

Objectives:

To capitalize from the BPR project and develop internal experts for other BPR Projects3.2 Barriers to effective implementation of BPR

Downsizing and restructuring means doing less with less. Reengineering, in contrast, means

doing more with less. It is a refreshing new approach to doing business and there is plenty of

evidence that it works well -even spectacularly- at times. Performance gains of 50 to 100

percent are common for some reengineered processes.


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However, despite all the energy, money, and efforts spent by companies trying to make their

organizations reengineering efforts successful, reengineering is still an unfulfilled promise. The

common barriers to effective implementation of BPR projects as follows:

Misunderstanding of the concept: Lack of understanding the concept cause managerslabel any organizational change as reengineering which results with a failure to appreciate the

promise of reengineering.

Misapplication of the term: Reengineering is not cheap, and it cannot be successfulwithout a continuous improvement process.

Lack of proper strategy: A major reason for the high failure rates of BPR efforts is thatthe efforts are not connected to the corporate goals.

Unrealistic objectives: Reengineering always takes longer than expected, always involvemore people resources than are available, and always presents problems no one anticipates.

Management failure to change: Lack of leadership is a frequent cause for the highfailure rate of BPR projects.

Failing to recognize the importance of people: Many companies who attemptreengineering focus on process design and ignore or underestimate the importance of people.

IT failure to change: IT can be one of the greatest barriers to BPR. Many reengineeringefforts have been stopped because radical change would require IT redesign. Resistance on the

part of IT personnel has more often been a failure in implementation than an enabler.


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4.BENEFITS OF BPR1. Increase Effectiveness.

As all employees are aware of the processes to which they belong, they have a greater

sense of responsibility. All processes are completely monitored under the strict control

of the management. The net result of this is that employees deliver high quality

products to their customers. It helps to improve efficiency. Proper management and

control of all business processes reduces the time lag between different processes,

which otherwise is quite high causing delays. This in turn reduces the time to market the

product to the target customers and gives quicker response to customers.

2. Enterprise integrationConsolidation of organization takes place and several jobs will be clubbed into one so it

will be easy for the organization to manage and control.

3. Numbers of steps in a process are reducedThis is a simplification process so unimportant processes will be removed; Inspections,

checks and controls are reduced or eliminated if they are not adding value to the

process.

4. Like Process Improvement, steps are reassessedOn the basis of following questions like Can it be eliminated, Can it be taken off line, Can

it be performed in parallel, Can it be combined, Is it a bottleneck, Can its mean be

reduced, Can its variance be reduced, WHAT IS ITS COST???; processes will be improved

and reduced which will lead to lesser work and low cost.


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5. Reduces costWith the proper management of processes, improved efficiency and quick delivery of

products to the buyers, the overall product costs are reduced resulting in cost saving for

the organization in the long run.

6. Meaningful job for employees.As the time lag of product processing between different departments gets reduced due

to the application of business process reengineering, there are more meaningful tasks to

be performed by employees. This leads to increase their levels of motivation and the

desire to perform well.

7. Improvement in organizational approach.According to the traditional approach of managing an organization there is no flexibility

or adaptability to change. The management formulated strict rules for employees of the

organization. Whereas now, when most organizations have implemented business

process reengineering there is an increase in flexibility and adaptability for change. This

has created better environment for people to work, thus leading to employee

satisfaction.

8. Growth of businessImplementation of BPR results in the growth of the present business thus enabling the

emergence of new businesses within the same organization. Although BPR is very

effective in controlling cost and improving efficiency, its implementation is a hard nut to

crack. Employees are very resistant to this kind of change thus, it is important to have

extensive support from the top management.


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BIBLIOGRAPHIC REFERENCES

1. Dr. S. Balasubramanian, Ph.D., Department Of Management Studies, Hindustan Collegeof Engineering, Successful BPR Implementation Strategy.

2. Hitachi Consulting, Business Process Re-engineering: A Holistic Approach to change. 3. Maureen Weicher, William W. Chu, Wan Ching Lin, Van Le, Dominic Yu, Business Process

Re-engineering Analysis and Recommendations, December 1995.

4. Sotiris Zigiaris, MSc, BPR Engineer, Business Process Re-Engineering (BPR) reportproduced for the EC funded project, January 2000.

5. Subramanian Muthu, Larry Whitman, and S. Hossein Cheraghi, Dept. of Industrial andManufacturing Engineering, Business process reengineering: a consolidated

methodology, November 1999.

6. Seth Dinesh and Rastogi Subash C., Global Management Solutions, Thomson Publication,2004.

Group 13_Business Process Re Engineering

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Transcript of Group 13_Business Process Re Engineering