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Learning Objectives Understand and be able to
implement a BPR Strategy
Understand the main challengesin implementing a BPR Strategy
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Sequence of Presentation
Introduction to Business Process Salient Features and Stages of
Reengineering
Reengineering Initiatives Forms of Reengineering Features of Business Process
Reengineering Technology as Process Enabler Mapping an Existing Process Process Redesign and New Process
Validation Conclusion
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What is BPR? Reengineering is the
fundamental rethinking andredesign of business processesto achieve dramaticimprovements in critical,contemporary measures of
performance, such as cost,quality, service and speed.
(Hammer & Champy,
1993)
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BPR Versus ProcessSimplification
Process Reengineering
Radical TransformationVision-Led
Change Attitudes & BehaviorsDirector-Led
Limited Number of Initiatives
Process Simplification
Incremental ChangeProcess-Led
Assume Attitudes & BehaviorsManagement-Led
Various Simultaneous Projects
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BPR Versus ContinuousImprovement
Process Reengineering
Radical TransformationPeople & Technology Focus
High InvestmentRebuild
Champion Driven
Continuous Improvement
Incremental ChangePeople Focus
Low InvestmentImprove Existing
Work Unit Driven
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TransformationInputs Outputs
Feedback
Environment
Systems Perspective
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Aspects of Processes Objects: Processes manipulate
objects. These could be Physicalor Informational
Entities: Processes occurbetween organizational entities.
Activities: Processes encompasstwo types of activities-Managerial and Operational
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Why Reengineer? Customers
Demanding Sophistication Changing Needs
Competition Local Global
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Why Reengineer? Change
Technology Customer Preferences
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Why Organizations DontReengineer?
Complacency
Political Resistance
New Developments
Fear of Unknown and Failure
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Origins Scientific Management. FW
Taylor (1856-1915). Frederick Herzberg - Job
Enrichment Deming et al - Total Quality
Management and Kaizen In Search of Excellence (Peters
and Waterman) Value-Added Analysis (Porter).
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Key Characteristics Systems Philosophy Global Perspective on Business
Processes Radical Improvement Integrated Change
People Centred Focus on End-Customers Process-Based
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Process Based Added Value
BPR Initiatives must add-value overand above the existing process
Customer-Led BPR Initiatives must meet the
needs of the customer
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Radical Improvement Sustainable
Process improvements need tobecome firmly rooted within theorganization
Stepped Approach Process improvements will not
happen over night they need to begradually introduced
Also assists the acceptance by staff of the chan e
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Integrated Change Viable Solutions
Process improvements must beviable and practical
Balanced Improvements Process improvements must be
realistic
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People-Centred Business Understanding Empowerment & Participation
Organizational Culture
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Focus on End-Customers Process improvements must
relate to the needs of theorganization and be relevant tothe end-customers to which theyare designed to serve
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Business Process FlowchartSymbols
An Activity
A Document
A Decision
Data (input as outputs)
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Business Process FlowchartSymbols
A Predefined Process
The Start of a Process
The End of a Process
Representing a Relation
Start
End
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Business Process FlowchartSymbols
Continuation of the process at the same pageat an equal symbol with the same number. Usedwhen a relation arrow crosses another relation arrow
Off-Page Connector - Process will continue on thenext page
Integration Relation - A relation to another module isidentified and described
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Data Flowchart Symbols
An Activity
A Document
A Decision
Flat Data File (input as outputs )
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Understand the CurrentProcess
Develop a Process Overview Clearly define the process
Mission Scope Boundaries
Set business and customermeasurements
Understand customersexpectations from the process
(staff including process team )
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Understand the CurrentProcess
Clearly Identify ImprovementOpportunities
Quality Rework
Document the Process
Cost Time Value Data
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Understand the CurrentProcess
Carefully resolve anyinconsistencies
Existing -- New Process Ideal -- Realistic Process
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Develop & Communicate Vision of ImprovedProcess
Communicate with all employeesso that they are aware of thevision of the future
Always provide information onthe progress of the BPR initiative
- good and bad. Demonstrate assurance that the
BPR initiative is both necessaryand ro erl mana ed
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Develop & Communicate Vision of ImprovedProcess
Communicate with all employeesso that they are aware of thevision of the future
Always provide information onthe progress of the BPR initiative
- good and bad. Demonstrate assurance that the
BPR initiative is both necessaryand ro erl mana ed
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Develop & Communicate Vision of ImprovedProcess
Promote individual development byindicating options that areavailable
Indicate actions required and thoseresponsible
Tackle any actions that needresolution
Direct communication to reinforce
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Identify Action Plan Remove no-value-added
activities
Standardize Process andAutomate Where Possible
Up-grade Equipment
Plan/schedule the changes
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Identify Action Plan Construct in-house metrics and
targets
Introduce and firmly establish afeedback system
Audit, Audit, Audit
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Execute Plan Qualify/certify the process Perform periodic qualification
reviews Define and eliminate process
problems
Evaluate the change impact onthe business and on customers Benchmark the process
Provide advanced team training
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Stages of Reengineering Realization Key Essentials
Rethink Redesign Retool Evaluating Again
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Realization Identify needs and threats from
Competition and political,economic and social environments
Realization that it must showregularly, Incremental or Radicalbusiness improvement
Leadership at all levels to convincethe work force of the necessity forchange
Transformation through
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Key Essentials State Mission, vision and Values
of the Organisation in terms of Satisfaction of Customer Needs
Establish Key PerformanceIndicators for the Product orService being offered.
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Rethink Re-examine the current and
existing processes of theorganisation. Critical Questions:-
-Is the current process capable of producing competitive productsand services?
-Is the current process capable of satisfying all the essentialrequirements of the customer andthe organisation?-
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Redesign Appraise the entire system of
procedures, products and serviceswith the associated work elements,tasks and jobs
Principles of Process Redesign: All essential Requirements of
customers and organisation must bemet
Job satisfaction must be givenimportance in the redesign process The main objectives of redesigning
processes are to eliminate all sourcesof waste and enhance theorganisations competitive position
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Retool Evaluate New technologies and
tools required for improving theservice and production process
Map the existing Technologiesaccording to prequalified processcharcteristics
Examine the weaknesses of thecurrent technology and tools bydetermining the Mean time tofailure, mean time to repair, meantime to dismantle
Incorporate the new technologyand reengineer the process.
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Evaluating Again Reevaluate by getting data on key
performance success factorsquality, productivity, customer
satisfaction, market share,variation levels, profitably indexes,and cost reduction savings etc.
The responsibility of examining theperformance of the process leiswith the workers themselves, asthey are best qualified to controlthe variables in the process.
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Re-engineeringInitiatives
Re-engineering in Large Business(P &C, 8000 employees)-
2.Strategy: Fundamental Changes inProducts, Customers , Processesand Technology)
3.Structural Changes Managing a Large Re-engineering
Initiative- 1. Involvement of Employees- helped build upownership of the Project. 2. Map of key value Chain processes
Managing Change in a Re-engineering Initiative-
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Forms of Re-engineering Systems Re-engineering Infrastructure Reengineering
Business Process Re-engineering
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System Re-engineering Ensure Effective Utilisation of :2.Computers
3.Data Storage4.Programmer Productivity
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System Re-engineering..Contd
Hardware Engineering-Radical Shift in ComputerTechnology
Software Engineering- Adopt SWTechnologies
4.Computer Aided Design (CAD)5.Computer Aided Manufacturing
(CAM)
6.Computer Integrated
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CAD Technique used for Designing
Products and Processes onComputers
Assists in Creation, Modification,analysis and optimization of design
CAD system incorporatesGraphics for highlightingPhysical Attributes of theProduct and Engineering
Systems for highlighting the
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Benefits of CAD Increase in Productivity Improvement in the Quality of
Product or Process Design More Standardized products and
design documents
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CAM Computers control and support the
Automated ManufacturingOperations
Benefits of CAM:-3.Reliable Information inputs4.Consistent Product Quality
5.Reduction in Labor Costs6.Better Control and management of Equipment and materials
7.Improvements in Production Rate
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CIM It integrates the engineering
functions of CAD/CAM with thebusiness functions of the firm.
Business Functions include OrderEntry, Cost Accounting,Maintenance of Employee timerecords, payroll and customerbilling.
Highest Level of Integration in
Manufacturing
f
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Infrastructure Re-engineering
Infrastructure of an Oraganisationincludes People, Processes,Technology and Resources (Men,Machine and Material)
Infrastructure re-engineeringinvolves restructuring of an entireorganisation with the purpose of improving its productivity
Macro Level Issues:- Change in thedegree of Centralisation of decision-making
Micro Level Issues:- Job definitionand Content, job satisfaction,
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BPR It is a methodical, regimented
progressive move toward thecritical examination, rethinking,
redesign and implementation of the redesigned processes of anorganisation.
It is also referred to as BusinessProcess Improvement (BPI)
Can be applied Incrementally,but more often as Dramatic or
Radical refurbishment of existing
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Features of BPR Process Orientation Project Goals Rule Breaking
Creative Use of Technology Combining Several Jobs into one Decentralisation of Decision-
Making Authority Multiple Versions of Processes Checks and Controls are Reduced A Single Point of contact for a
Customer
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Effects of BPR1. Change in Nature of Jobs-from simple tasks to
multi dimensional work 2. Change in roles-from controlled to empowered3. Changes in preparation for the job-from
training to education4. Change in the focus of performance measures
and compensation from activity to results5. Change in the criteria for promotion-from
performance to ability6. Change in values from protective to
productive7. Change in responsibilities of Managers-from
supervisors to Coaches8. Changes in vertical organisational structure-from hierarchical to flat
9. Change in the horizontal organisationalstructure-from functional departments toprocess teams.
P bl f F i l
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Problems of FunctionalDivision
BPR and Functional Division BPR and Division of Labor
T h l P
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Technology as ProcessEnabler
Impact of Technology inManufacturing
2.AutomationFlexible Manufacturing SystemsRoboticsAutomated Guided VehiclesAutomated Storage and RetrievalSystems
Ad t f
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Advantages of Automati on
1. Improvement in Productivity2. Efficient Use of Materials3. Improvement in the Quality of
the Product4. Improvement in Work
Environment for the Workers5. Reduced Factory Lead-Time
Di d t f th
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Disadvantages of theAutomation
Negative Feedback from theEmployees
High Initial Investment Higher Level of Maintenance
Needed Less Flexible Requirement of Technical
Manpower
M i E i ti
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Mapping an ExistingProcess
Have a thorough Understanding of the Existing Process
Map the existing Process first andanalyse and improve on them todesign new processes
Identify the breaks that prevents
the process from achieving thedesired result of value addition Re-engineer the process to
streamline the Break
P R d i d N
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Process Redesign and NewProcess Validation
Process Validation measures thecorrespondence between aformal model of intendedprocess behavior exhibiting aprocess.
It is done by allowing the user to
simulate the execution of aprocess.
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Validation.. Contd Model Validation Specifics
How can I assess the sufficiency of the functiona
How can I detect non-constant variation across t
How can I tell if there was drift in the process? How can I assess whether the random errors are
How can I test whether or not the random errors
How can I test whether any significant terms are
How can I test whether all of the terms in the fu
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Information Technology
& BPR
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Benefits From IT Assists the Implementation of
Business Processes Enables Product & Service
Innovations Improve Operational Efficiency Coordinate Vendors & Customers in
the Process Chain
Computer Aided BPR
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Computer Aided BPR(CABPR )
Focus Business Processes Process Redesign Process Implementation
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BPR Challenges
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Common Problems Process Simplification is
Common - True BPR is Not Desire to Change Not Strong
Enough Start Point the Existing Process
Not a Blank Slate Commitment to Existing
Processes Too Strong REMEMBER - If it aint broke
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A Business Revolution Hammer was former CS professor switched to consulting guru business celebrity for a while
Rhetoric of revolution trash existing business, rebuild from scratch process oriented view engineer better systems
Insists new idea Old ways were good before New technology means new approach
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Attention to Processes Is a good thing Some common sense stuff Simplify processes rather than
automate Design rather than just accumulate (As Davenport says, this is tied to
TQM)
Exploit technology Minimize organizational barriers to
process Put a single person in charge
Simplify organizational chart if
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Quotes from Hammer I "American managers . . . must abandon the
organizational and operational principles and procedures they are
now using and create entirely new ones.... Business reengineering means starting all over, starting from scratch.... It means forgetting how work was done....
Old job titles and old organizational arrangements . . .
cease
to matter. How people and companies did things yesterday doesn't matter to the business reengineer....
Reengineering ... can't be carried out in small andcautious
steps. It is an all-or-nothing proposition." Reengineering the Corporation
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Quotes from Hammer II "In this journey we'll carry our wounded
and shoot the dissenters.... I want to purge from the
business vocabulary: CEO, manager, worker, job."
Forbes ASAP, Sept. 13, 1993 "It's basically taking an axe and a
machine gun to your existing organization."
Computerworld,Jan. 24, 1994 "What you do with the existing structure
is nuke it!" Site Selection, February 1993
Common Problems with
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Common Problems withBPR
Process under review too big ortoo small
Reliance on existing process too
strong The Costs of the Change Seem
Too Large
BPR Isolated Activity not Alignedto the Business Objectives Allocation of Resources Poor Timing and Planning
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Summary Reengineering is a fundamental
rethinking and redesign of business processes to achievedramatic improvements
BPR has emerged from keymanagement traditions such as
scientific management andsystems thinking
Rules and symbols play anintegral part of all BPR
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Summary Dont assume anything -
remember BPR is fundamentalrethinking of business processes
Business Process Reengineering Methodology
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73
CurrentBusiness
Processes
FutureBusiness
Processes
Information
Technology
Skills
STRATEGIC
DIRE
CTIONS
Information
Technology
Skills
CurrentEnvironments (AS-IS) FutureEnvironments (TO-BE)
Transition/Implementation (Change Management)
Business Process Reengineering Methodology
Current
Products/Services
Future
Products/Services
AIMCORP-Automated Information Management Corporation
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E i i Q i
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Examination Questions
1. BPR helps------a) Streamline flow of informationb) Increase overall efficiency of businessprocessc) Increase quality of Productiond) Manage Customer bettere) Decision making process
7. BPR is a radical change in business process.Relate
A complete structural change in businessfunctions
Change in customer relationship Maintain proper SCM Business Transactions carried on the net Preparing for e-business3. Discuss Business Process Reengineering.
4. The term BPR refers to:-
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b) Business Program Re-engineeringc) Business Process Reengineeringd) Business Process Re-applicatione) Business Process Re-structuringf) Business Plan Reengineering5. Not a single day should go by without some kind of improvement
being made somewhere in the company. This phrase is mostapplicable in case of :-
h) BPRi) TQM
j) Kaizenk) ERPl) CRM6. CIM is:n) Computer Integrated Marketingo) Computer Integrated Manufacturingp) Computer Integral Manufacturingq) Chip Integrated Manufacturing.7. Explain the Stages of Re-engineering
8 Business Process automation relates to
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8. Business Process automation relates to:-
b)Implementing a new software packagec)Refining automated business processesd)Automating the work in Progresse)Automating the business process as it
is without any changesf) Revamping the existing system9. What is Business Process
Reengineering? Briefly discuss thesuccess factors that may lead tosuccessful outcomes for BPR Projects.What are the major factors which
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