BPR

Systems Thinking

Business Process Reengineering (BPR)

Origins

Main principles and approach

Organisation of a BPR programme

Process Analysis and Charting

Problems of BPR

Systems view of business

TransformationProcess

TransformationProcess

InputsInputs

InformationInformation

FeedbackFeedback

Outputs/outcomesOutputs/outcomes

EnvironmentEnvironment

AdaptationAdaptation

EntropyEntropy

What is a process?

Any operational or administrative system which transforms inputs into valued outputs - typically a sequence of tasks arranged into a procedure or set of work arrangements perhaps involving various machines, departments and people.

Any operational or administrative system which transforms inputs into valued outputs - typically a sequence of tasks arranged into a procedure or set of work arrangements perhaps involving various machines, departments and people.

What is a business process?

Service processes including those that support production processes (e.g. order process, engineering change process, payroll process, manufacturing process design). A group of logically related tasks that use the firm's resources to provide customer-oriented results in support of the organisation's objectives.

Making sandwiches to order

Seeing a sales order through from beginning to end

stock replenishment procedures

aircraft maintenance e.g. in a hanger or whilst waiting on the tarmac between flights

Service processes including those that support production processes (e.g. order process, engineering change process, payroll process, manufacturing process design). A group of logically related tasks that use the firm's resources to provide customer-oriented results in support of the organisation's objectives.

Making sandwiches to order

Seeing a sales order through from beginning to end

stock replenishment procedures

aircraft maintenance e.g. in a hanger or whilst waiting on the tarmac between flights

BPR Objectives

Making processes

• Effective - producing the desired resulted• Efficient - minimising the resources used• Adaptable - being able to adapt to changing

customer and business needs.

BPR PhilosophyRadical, cross functional, dramatic

Making processes

• Effective - producing the desired resulted• Efficient - minimising the resources used• Adaptable - being able to adapt to changing

customer and business needs.

BPR PhilosophyRadical, cross functional, dramatic

Hammer and Champy, Re-engineering the Corporation, Harper Collins, 1993

Hammer and Champy, Re-engineering the Corporation, Harper Collins, 1993

BPR Principles

RadicalBreak away from out-dated, patched, obsolete arrangements and practices

Fundamental Re-designgenerate new, deeply penetrating, best-way methods.

ProcessRe-design core activities cross-functionally, Break-down departmentalism. Departments are “structure” solutions to past organisational problems - not fixed for ever.

DramaticNot incremental or marginal improvements but performance breakthroughs: cost, quality, service & time-compression.

RadicalBreak away from out-dated, patched, obsolete arrangements and practices

Fundamental Re-designgenerate new, deeply penetrating, best-way methods.

ProcessRe-design core activities cross-functionally, Break-down departmentalism. Departments are “structure” solutions to past organisational problems - not fixed for ever.

DramaticNot incremental or marginal improvements but performance breakthroughs: cost, quality, service & time-compression.

BPR Targets well-defined and managed processes

Need• Process owners - accountable for how the

process performs• Well-defined boundaries (process scope),

internal and external interfaces & responsibilities

• Well-documented procedures, work tasks & training measurement & feedback controls close to point of performance

• Customer-related measurements & targets• Known cycle times• Formalised change procedures• Performers to know how good they can be

be

Need• Process owners - accountable for how the

process performs• Well-defined boundaries (process scope),

internal and external interfaces & responsibilities

• Well-documented procedures, work tasks & training measurement & feedback controls close to point of performance

• Customer-related measurements & targets• Known cycle times• Formalised change procedures• Performers to know how good they can be

be

Apply systems thinking to business processes

• Focus on & organise around outcomes

• Provide direct access to customers (internal + external)

• Harness best technology

• Control through policies, practices and feedback

• Enable independent & simultaneous work

• Give decision-making power to workers

• Build in feedback channels

BPR Philosophy

Does the re-engineering consultant see the glass as half full or half empty?

Neither.It’s the wrong size of glass!

BPR - process innovation

• Existing, long-in-the-tooth practices (solutions to past problems) may no longer reflect core business concerns nor what the customer actually wants

• Rethink & redesign business processes to bring about sharp improvements (radical change) in performance, costs, cycle times and product/service quality.

BPR Phases

Undestanding the Process

Streamlining Measurements and Costs

Continuous improvement

Organising for

improvement

PHASE 1: Organising for improvement

Objective: build leadership, understanding & commitment

Activities

• Establish executive improvement team (EIT)

• Appoint BPR champion

• Provide executive training

• Develop an improvement model

• Communicate goals to employees

• Review business strategy and customer requirements

• Select the critical processes

• Appoint process owners

• Select BPR team members

PHASE 2: Understand and Redesign the process

Objective: understand all dimensions of current business process

Activities• Define process mission, scope and boundaries• Provide team training• Develop a process overview• Define customer/business measurements & expectations for the

process• Identify improvement opportunities

• Errors and re-work• High cost• Poor quality• Long time delays/backlog

• Record/chart the process• Collect cost, time and value data• Perform walkthroughs on new process• Resolve the differences (existing/new, ideal/realistic)

PHASE 3: Implementation

Objective: secure efficiency, effectiveness and adaptability of the business process on implementation

Activities• Eliminate bureaucracy & no-value-added activities

• Simplify the process and reduce process time

• Standardise and automate

• Up-grade equipment

• Error proof the process and document it

• Select and train the employees

• Plan/schedule the changes

PHASE 4: Measurements and controls

Objective: develop a process control system for on-going improvement

Activities

• Develop in-house measurements and targets

• Establish a feedback system

• Audit the process periodically

• Establish a poor-quality cost system

PHASE 5: Continuous improvement

Objective: to implement a continuous improvement process

Activities

Qualify/certificate the process

perform periodic qualification reviews

define and eliminate process problems

evaluate the change impact on the business and on customers

benchmark the process

provide advanced team training

How is BPR different from CQI

Continuous improvement

Incremental gradual change

Low investment

People-practices focus

Improvement on existing

Work-unit driven

BPR

Radical change

High investment

People and technology focus

Scrap and rebuild

Champion driven

BPR and Bench-marking

• The BPR team may benchmark another company's process to determine

• Process objectives

• Innovative practices

• Tried and tested methods

• Benchmarking partners need not be confined to the same industry.

• A photocopying firm on re-engineering its order processing system compared itself to mail-order firms as well rival photocopy companies.

BPR Problems Begin with a clean sheet, avoid the existing way

Preoccupation with current operation blocks creativity

Thinking the process problem through in the light of new methods and technologies available.

Commitment to existing business processes

Avoid another quick fix yet organisational response needed

Finding the time and energy

The business needs to keep the old, existing core systems running

John gall, “systemantics” - if it works, don't change it!

BPR Problems

Choice of the target process - too big, too small

BPR in isolation from strategic and operational plans will not work. Commitment of strategic managers is essential.

Isolated BPR efforts will lack direction and will get lost.

BPR introduced at times of stress and anxiety

Keeping the BPR team on target

Vaccination against change