BPR 01 Introduction
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Transcript of BPR 01 Introduction
Business Process Re-engineering01 – History & Introduction
Slide 2 of 22
BPR - Evolution
• Organisations aim to increase productivity & quality service and to reduce cost
• Traditional organisation structure, customer services and business methods are out-dated
• Low barriers to entry, hence stiffer competition - locally & globally
• Current business are:– customer-focused and market driven – process-focused and team-oriented– Focused on speed & response time– focused on customer relationships
Slide 3 of 22
BPR - Origins
• Business concepts of 1990• Rework of TQM, continuous improvement• Survey results shows that BPR was unsuccessful• BPR leaders - James Champy; Thomas Davenport• Deming and Juran discussed about BPR in TQM reports• BPR was introduced in 70’s to the manufacturing
environment
Slide 4 of 22
Business Process
Davenport & Short’s definition
”a set of logically related tasks performed to achieve a defined business outcome . A structured, measured set of activities designed to produce a specified output for a particular customer or market. It implies a strong emphasis on how work is done within an organization”
- Davenport & Short, 1990
Slide 5 of 22
Business Process
Generic Definition
“ a set of activities that transform a set of inputs into a set of outputs (goods or services) for another person or process using people and tools”
• “ a collection of business activities that creates value for the customer”
InputsSupplier Process Customer
Outputs
Slide 6 of 22
Business Process
What are Business processes?• sequences and combinations of business activities.• management processes control and coordinate these
activities and ensure that business objectives are delivered.
• support processes, the name implies, provide infrastructural and other assistance to business processes.
Business Processes can be further differentiated into knowledge-based and operational processes.
Slide 7 of 22
Knowledge-based Processes
What are Knowledge-based processes?
• Product development, research activities, advertisement, and management consulting.
• These processes typically are of non-standard nature• They rely on the knowledge and creativity of the persons
involved.
Knowledge-based processes are not dominant in Business Reengineering projects.
- Davenport; Jarvenpaa; Beers, 1996
Slide 8 of 22
Operational Processes
What are Operational processes ?
• Customer service, procurement, and manufacturing. They are at the heart of most Business Reengineering efforts.
• They are classified by their relative stability, standardisation and repeatability.
Operational processes are further classified into key andsecondary processes. Key processes directly support themission and the strategies of the company.
Slide 9 of 22
Business Process Components
• They have people / customers (internal or external)• They have information and decision made • They have channels to transmit information• They cross organizational boundaries, i.e., they occur
across or between organizational sub-units
Slide 10 of 22
Business Process Examples
• Generic Customer– Marketing & Sales– Product/Service Development– Manufacturing– Distribution– Billing– Order Processing– Customer Service
Slide 11 of 22
Business Process Examples
• Industry-specific Customer– Loan processing (Banking)– Claims (Insurance)– Grant allocation (Government)– Merchandise return (Retail)– Food order & preparation (Restaurant)– Baggage handling (Airlines)– Reservations (Airlines)
Slide 12 of 22
Business Process Examples
• Generic Administration – Budgeting– Training– Human Resource– Facilities Management / Maintenance– Purchasing– IT– Finance / Accounts
Slide 13 of 22
Objectives & Drivers of BPR
Objectives• Process Streamlining• Flexibility & Responsiveness• Global competitiveness• Corporate rightsizing
Drivers• Competition is Intense• Globalisation has become a norm• Change has become constant• Customers have become powerful
Slide 14 of 22
Forces reshaping businesses
Previous Now
• Competition: Local/regional National/Global
• Markets: Mass Focused
• Operations: Controlled Flexible
• Focus: Performance Best service
• Performance: Short term Sustained
Slide 15 of 22
What is BPR ?
• All things to all people?• Documenting procedures and processes to ISO
standards?• Systems implementation?• IS strategy deployment?
Slide 16 of 22
Business Process Re-engineering
Business Process Re-engineering is :
“ the fundamental rethinking and radical design of entire business processes enabled by information technology to achieve dramatic improvements in business performance “
- Hammer & Champy
Slide 17 of 22
Business Process Re-design
Business Process Re-design is :
“ the analysis and design of workflows and processes within and between organizations “
Slide 18 of 22
Fundamental Rethinking
• Why do we do what we do?• Why do we do it the way we do? • Re-engineering first determines what a company must
do, then how to do it• It takes nothing for granted • It ignores what is and concentrates on what should be
Slide 19 of 22
Radical Redesign
• It means getting to the root of things• It means starting all over again and isn’t about fixing
things• It is low in cost with problem at the design stage rather
than at the execution stage• It means enabling new or existing processes using IT
Slide 20 of 22
BPR & Change
• BPR is an integrated program of change which has a major impact on an organization for several reasons:– Sponsored by senior management– Driven from the top down. Begins and ends with
customer value– Applies to multiple business functions, departments
and locations– Involves cultural, organizational and role changes that
must be managed– Radical improvements will take place
Slide 21 of 22
BPR – Challenging current practices
Conventional: Automate existing process
BPR: Challenge current practices
+ =Automate processOutdated processes
reinforced - no radicalimprovement
Analyse process.Fix if broken
Clearly definedprocesses integrated
to meet customer needs and add value+
Understandcurrent situation and
future vision ofthe enterprise
Invent new ways of working & designnew process. Use IT
to enable change
=
Slide 22 of 22