Business Process Reengineering

1. Business Process Reengineering Raymond Yap Principal Consultant Hutex Management Consulting http://www.hutex.com

2. Business Process Reengineering “The FUNDAMENTAL rethinking and RADICAL redesign of business PROCESSES to bring about DRAMATIC improvements in critical, contemporary measures of performance, such as cost, quality, service and speed.” -Hammer, Champy (1993)

3. Process: Where and Who? NEED CUSTOMER PRODUCT/SERVICE

4. What is NOT Business Process Reengineering • TQM • ISO9000 • Automation • Downsizing • Restructuring • Change Management

5. Why BRP? • Do or Die • Minimize threat from rival firms • Attain sustainable competitive advantage • Leverage on unprecedented opportunity to take giant leap forward

6. Some of the BPR Objectives • Improve Efficiency e.g reduce time to market, provide quicker response to customers • Increase Effectiveness e.g deliver higher quality • Achieve Cost Saving in the longer run • Provide more Meaningful work for employees • Increase Flexibility and Adaptability to change • Enable new business Growth

7. Scope of BPR • Intra-functional • Small scope within department, least impact • Inter-functional • Horizontal view across departments, more impact • Inter-organizational • Broad view including entire supply & delivery chain, most impact

8. 4 Generic Steps in BPR • Create a Vision • Identify and understand Existing Processes • Redesign the processes • Implement the redesigned processes

9. Readiness Analysis • Is there a compelling business need for strategic change? • Is the organization prepared to challenge it status quo? Would it have the courage to create a new vision? • What’s the degree and quality of sponsorship and commitment of senior management? Are they prepared to be deeply involved? Do they have the energy to follow through the entire change process?

10. Readiness Analysis • Is the organization prepared to commit resources (time, energy, money) to undertake BPR project? • What is the overall organization’s attitude towards change? • Is the organization prepared to overcome resistance to change?

11. BPR Team Composition • Top management (e.g. CEO) as SPONSOR • Senior & middle management in EXECUTIVE TEAM • Selected senior & junior mgmt/staff to form PROCESS TEAMS • Enthusiastic and energetic individual as BPR COORDINATOR

12. Case Example: Kodak • In 1987 • Kodak’s arch-rival, Fuji came up with a new 35mm single-use camera • Kodak has no competitive offering • Kodak’s Traditional Product Development Process • Slow: would take 70 weeks to produce a rival to Fuji’s camera! • Result: the new process, “Concurrent Engineering” • Reduce turnaround time to 38 weeks

13. Case Example: Kodak • Key Redesign Strategy • Apply innovative use of CAD/CAM + integrated product design database • Allow engineer to design at computer workstations • Database collect each engineer’s work and combines into overall design • Each morning, problems are resolved immediately • Manufacturing can begin tooling design just 10 weeks into product design instead of 28 weeks in the past

14. Minimize Risk and Ensure Success • Top Management Support and Commitment • Show some result quickly • Set Stretch Targets for redesign • Apply a holistic and disciplined approach to manage change • Involve people in the change process • Communicate sufficiently to dispel uncertainty and fear

15. Conclusion • BPR is a multi-discipline approach for strategic change • Methodology provides missing “how to” that must follow the “why” • BPR must be managed as a project • BPR must be owned by the organization, not driven by consultants • BPR requires constant communication and feedback