The Hammer Definition of BPR

1. The Hammer Definition of BPR • Radical redesign of business processes • What BPR is • What BPR is not • Hammer, Michael, et al., REENGINEERING THE CORPORATION: A Manifesto for Business Revolution, New York: Harper Collins, Publishers Inc., 1993.

2. Other References on BPR • Champy, James, REENGINEERING MANAGEMENT, New York: Harper Business, 1995. • Hammer, Michael, et al., THE REENGINEERING REVOLUTION, New York: Harper Business, 1995. • Jacobson, REENGIENEERING WITH OBJECT TECHNOLOGY, 1995. • Taylor, David A., BUSINESS ENGINEERING WITH OBJECT TECHNOLOGY, wILEY, 1995.

3. Some Common Benefits of BPR • There is enterprise integration • Departments are consolidated • Several jobs are combined into one job • Workers are empowered • There is both horizontal and vertical reorganization • Handoffs are eliminated • There are fewer rules and less coordination is required

4. Some Common Benefits of BPR, Cont’d • Number of steps in a process are reduced • This is simplification • Inspections, checks and controls are reduced or eliminated • The steps are performed in a more natural order

5. Some Common Benefits of BPR, Cont’d • Like Process Improvement, steps are reassessed • 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???

6. Some Common Benefits of BPR, Cont’d • Processes differ by the type of job being processed • Not just one process but many are employed depending on the size of the job • Work is performed where it makes the most sense • Wal-Mart moves the replenishment function to its suppliers

7. Some Common Benefits of BPR, Cont’d • Reconciliation is minimized • A case manager provides a single point of contact • Hybrid centralized/decentralized operations are prevalent • IT enables decisions to operate autonomously

8. Benefits of elimination of handoffs • No transits • No waiting for another operator • No waiting in queues • No setups • No supervision/coordination required

9. EXAMPLES: • Ford • IBM Credit • McKesson Pharmacueticals • Kodak • XEROX • Motorola

10. How information technology provides important business solutions • Managers must learn to think inductively • Information can appear instantaneously in as many different places as needed • Generalists can do the work of experts with expert systems • {{LET’S EXAMINE THESE MORE CLOSELY}}

11. Information can appear in as many places as needed simultaneously • Shared databases make this possible

12. A generalist can do the work of an expert • Expert systems make this possible

13. Business can simultaneously reap the benefits of centralization and decentralization • Wide-area, data-communication networks make this possible

14. Decision-making is part of everyone’s job • Decision support tools (database access combined w/ modeling software)

15. Field personnel can send and receive information wherever they are • They don’t need an office at headquarters any more • To receive and send mail, all they need is a notebook with cellular telephone technology modem

16. Contacts with potential buyers need no longer be personal • E-mail enables detailed interaction • Southwestern Bell gets their C++ programmers out of India at $10-$15 per hour

17. Planning is instantaneous and continuous due to IT • Manufacturers gather data on • product sales, raw materials price and availability, labor supply and produces a master production schedule • This can now be done instantaneously by computer based on real-time data

18. Planning is instantaneous, Cont’d • Companies must make technology exploitation one of there core competencies if they are to succeed in a period of ongoing technological change • If you can buy it, its not new

19. Planning is instantaneous, Cont’d • Know what you’re going to do with technology before it becomes available • It is entirely possible to stay three years ahead of the market on technology

20. Who will re-engineer • Leader • Process owner • Re-engineering team • Steering Committee • Re-engineering czar

21. TASKS of the Re-engineering team • 1) determine measures of performance • 2) install measures of performance • 3) delineate entire existing process in all its gory detail • 4) perform process value analysis and activity-based costing • 5) benchmark processes by comparison with other processes

22. TASKS of the Re-engineering team, Cont’d • 6) design re-invented process • 7) simulate re-invented process • 8) prepare report with recommendations • 9) install re-invented process • 10) measure improvements

23. Re-engineering Opportunities • Product development: concept to prototype • Sales: prospect to order • Order fulfillment: order to payment • Service: inquiry to resolution

24. Symptoms of a sick process • Extensive information exchange, data redundancy -- process fragmentation • Inventory buffers and other assets -- slack to cope with uncertainty • High levels of checking, inspection and control -- fragmentation

25. Symptoms of a sick process, Cont’d • Lots of rework and iteration -- inadequate feedback • Complexity, exceptions and special cases -- accretion onto simplicity

26. Principles of good process design • Start with a vision • Decide upon approach • As few people as possible involved in the final process • Lots of involvement, empowerment and ownership

27. Principles of good process design, Cont’d • Simplicity, simplicity, simplicity • Make it fun, make it easy • Focus on outcomes • Shortened cycle times • Lower cost • Higher quality • Higher throughput • Simulate the prototype