Business Process Reengineering

1. Business Process Reengineering CEM 515 For: Dr. Abdulaziz Bubshait By: Hassan Al-Bekhit

2. Presentation Outline • General Introduction • Business Process Reengineering BPR Symbols • Understand and be able to implement a BPR Strategy • Understand the main challenges in implementing a BPR Strategy • Conclusion: Summary

3. Spectrum of Change • Automation • Rationalization of procedures • Reengineering • Paradigm shift

4. Automation • refers to computerizing processes to speed up the existing tasks. • improves efficiency and effectiveness.

5. Rationalization of Procedures • refers to streamlining of standard operating procedures, eliminating obvious bottlenecks, so that automation makes operating procedures more efficient. • improves efficiency and effectiveness.

6. Business Process Reengineering • refers to radical redesign of business processes. • Aims at • eliminating repetitive, paper-intensive, bureaucratic tasks • reducing costs significantly • improving product/service quality.

7. Paradigm Shift • refers to a more radical form of change where the nature of business and the nature of the organization is questioned. • improves strategic standing of the organization.

8. Business Process Reengineering • “Reengineering is the fundamentalrethinking and radicalredesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance such as cost, quality, service, and speed.” 3

9. Key Words • Fundamental • Why do we do what we do? • Ignore what is and concentrate on what should be. • Radical • Business reinvention vs. business improvement 4

10. Key Words • Dramatic • Reengineering should be brought in “when a need exits for heavy blasting.” • Companies in deep trouble. • Companies that see trouble coming. • Companies that are in peak condition. • Business Process • a collection of activities that takes one or more kinds of inputs and creates an output that is of value to a customer. 5

11. BPR & The Organization

12. BPR is Not? • BPR may sometimes be mistaken for the following five tools: • 1.Automationis an automatic, as opposed to human, operation or control of a process, equipment or a system; or the techniques and equipment used to achieve this. Automation is most often applied to computer (or at least electronic) control of a manufacturing process. • 2. Downsizing is the reduction of expenditures in order to become financial stable. Those expenditures could include but are not limited to: the total number of employees at a company, retirements, or spin-off companies.

13. BPR is Not? • 3. Outsourcing involves paying another company to provide the services a company might otherwise have employed its own staff to perform. Outsourcing is readily seen in the software development sector. • 4. Continuous improvement emphasizes small and measurable refinements to an organization's current processes and systems. Continuous improvements’ origins were derived from total quality management (TQM) and Six Sigma.

14. Reengineering & Continuous Improvement--Similarities Reengineering Continuous Improvement Similarities Basis of analysis Process Process Performance measurement Rigorous Rigorous Organizational change Significant Significant Behavioral change Significant Significant Time investment Substantial Substantial 16

15. Reengineering & Continuous Improvement--Differences Reengineering Continuous Improvement Differences Level of change Radical Incremental Starting point Clean slate Existing process Participation Top-down Bottom-up Typical scope Broad, cross-functional Narrow, within functions Risk High Moderate Primary enabler Information technology Statistical control Type of change Cultural and structural Cultural 17

16. What is a Process? • A specific ordering of work activities across time and space, with a beginning, an end, and clearly identified inputs and outputs: a structure for action.

17. What is a Business Process? • A group of logically related tasks that use the firm's resources to provide customer-oriented results in support of the organization's objectives

18. Why Reengineer? • Customers • Demanding • Sophistication • Changing Needs • Competition • Local • Global

19. Customer Demands • expect us to know everything • to make the right decisions • to do it right now • to do it with less resources • to make no mistakes • expect to be fully informed

20. Why Reengineer? • Competition • Local • Global • Change • Technology • Customer Preferences

21. Business Process Reengineering WHY ? • Integrate people, technology, & organizational culture • To Respond to rapidly changing technical & business environment and customer’s needs to achieve Big performance gains

22. Why Organizations Don’t Reengineer? • Complacency • Political Resistance • New Developments • Fear of Unknown and Failure

23. Performance • BPR seeks improvements of • Cost • Quality • Service • Speed

24. BPR Symbols

25. Business Process Flowchart Symbols An Activity A Document A Decision Data (input as outputs)

26. Business Process Flowchart Symbols A Predefined Process The Start of a Process The End of a Process Representing a Relation Start End

27. Business Process Flowchart Symbols Continuation of the process at the same page at an equal symbol with the same number. Used when a relation arrow crosses another relation arrow Off-Page Connector - Process will continue on the next page Integration Relation - A relation to another module is identified and described

28. Data Flowchart Symbols An Activity A Document A Decision Flat Data File (input as outputs)

29. Data Flowchart Symbols Manual Data Item A Database File Representing a Relation Continuation Off-Page Connector

30. Rules For Data Symbols

31. Rules For Data Symbols Start Symbol used to identify the start of a business process Activities must be described as a verb Decisions have only two possibilities (Yes & No) Crossing lines are not allowed If one side of the decision has no further processes defined this symbol has to be used Generate Purchase Order OK? Yes No End

32. Rules For Data Symbols Continuation symbol within the same number must be present twice on the same page Name the document Off- Page Connector is used to continue a process at the next page or to let the process to flow over at the previous to the next page. If more than one is needed use A, B, C, D … Name the data I Purchase Order A Posting of Bonus

33. Rules For Data Symbols Sub-Process Delivery Predefined Processes always have a relation to level and stream by a number in the line below a sub-process description A predefined process must be described in a different flowchart. To make the relation clear between the predefined process and the belonging flowchart a unique alpha numeric number should be assigned to this predefined process. BC 4.04

34. Version Management • For different versions of a business process or data flow some mandatory information must be on the flowchart. • Name of the business process • Unique number of the business process • Revision number • Date of last change • Author • Page number with total pages

35. Implementing a BPR Strategy

36. The C’s related toOrganization Re-engineering Projects The 3C’s of organization Re-engineering: The 4C’s of effective teams: - Commitment - Customers - Cooperation - Competition - Communication - Change - Contribution

37. Key Steps Select The Process & Appoint Process Team Understand The Current Process Develop & Communicate Vision Of Improved Process Identify Action Plan Execute Plan

38. 1. Select the Process & Appoint Process Team • Two Crucial Tasks • Select The Process to be Reengineered • Appoint the Process Team to Lead the Reengineering Initiative

39. Select the Process • Review Business Strategy and Customer Requirements • Select Core Processes • Understand Customer Needs • Don’t Assume Anything

40. Select the Process • Select Correct Path for Change • Remember Assumptions can Hide Failures • Competition and Choice to Go Elsewhere • Ask - Questionnaires, Meetings, Focus Groups

41. Appoint the Process Team • Appoint BPR Champion • Identify Process Owners • Establish Executive Improvement Team • Provide Training to Executive Team

42. Core Skills Required • Capacity to view the organization as a whole • Ability to focus on end-customers • Ability to challenge fundamental assumptions • Courage to deliver and venture into unknown areas

43. Core Skills Required • Ability to assume individual and collective responsibility

44. Use of Consultants • Used to generate internal capacity • Appropriate when a implementation is needed quickly • Ensure that adequate consultation is sought from staff so that the initiative is organization-led and not consultant-driven • Control should never be handed over to the consultant

45. 2. Understand the Current Process • Develop a Process Overview • Clearly define the process • Mission • Scope • Boundaries • Set business and customer measurements • Understand customers expectations from the process (staff including process team)

46. 2. Understand the Current Process • Clearly Identify Improvement Opportunities • Quality • Rework • Document the Process • Cost • Time • Value Data

47. 3. Understand the Current Process • Carefully resolve any inconsistencies • Existing -- New Process • Ideal -- Realistic Process

48. 3. Develop & Communicate Vision of Improved Process • Communicate with all employees so that they are aware of the vision of the future • Always provide information on the progress of the BPR initiative - good and bad. • Demonstrate assurance that the BPR initiative is both necessary and properly managed

49. 3. Develop & Communicate Vision of Improved Process • Promote individual development by indicating options that are available • Indicate actions required and those responsible • Tackle any actions that need resolution • Direct communication to reinforce new patterns of desired behavior

50. 4. Identify Action Plan • Develop an Improvement Plan • Appoint Process Owners • Simplify the Process to Reduce Process Time • Remove any Bureaucracy that may hinder implementation