BPR

• Business processes are simply a set of activities that transform a set of inputs into a set of outputs.

• For example suppose you are waiting in line at the grocery store, the "process" is called the check-out process, and the purpose of the process is to pay for and bag your groceries.

• The process is not a single aspect. Here the process begins with you stepping into line, and ends with you receiving your receipt and leaving the store.

• You are the customer and the store is the supplier.

Supplier Inputs Process Customer Outputs

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Need for BPR

• Improving business processes is vital for businesses to stay competitive in today's marketplace.

• Over the last few years companies have been forced to improve their business processes because customers are demanding better and better products and services.

• And if the customers do not receive what they want from one supplier, they have many others to choose from.

• Many companies began business process improvement with a continuous improvement model ( also known as business process improvement, functional process improvement, etc).

• This model attempts to understand and measure the current process, and make performance improvements accordingly.

• This method is effective to obtain gradual, incremental improvement. • However, over the last 10 years several factors have accelerated the need to improve

business processes. • The most obvious is technology. New technologies (like the Internet) are rapidly bringing

new capabilities to businesses, thereby raising the competitive needs to improve business processes dramatically.

• Another apparent trend is the opening of world markets and increased free trade. • Such changes bring more companies into the marketplace, and competing becomes harder

and harder. In today's marketplace, major changes are required to just stay even. It has become a matter of survival for most companies.

• As a result, companies have sought out methods for faster business process improvement. • Moreover, companies want breakthrough performance changes, not just incremental

changes, and they want it now. • Because the rate of change has increased for everyone, few businesses can afford a slow

change process. • One approach for rapid change and dramatic improvement that has emerged is Business

Process Reengineering (BPR).

BPR Concept

• Business process reengineering (BPR) is the redesigning of business processes and the associated systems and organizational structures to achieve a dramatic improvement in business performance.

• BPR is not - downsizing, restructuring, automation, new technology, etc.

• It is the examination and change of five components of the business: – Strategy – Processes – Technology – Organization – Culture

• Michael Hammer defines business process reengineering in his book “Reengineering the Corporation” as:

• Fundamental rethinking and radical redesign of business processes to bring about dramatic improvements in performance.

When to Use BPR?

• It is very difficult to formulate a general principal that can be delivered as an advice when to use BPR. However following factors can be considered –– Does the company clearly outperform due to heavy competition in

the market?– If there are many conflicts in the organization.– Is there high frequency of meetings?– Excessive use of non structured communication (memos, emails).– Is there any opportunity of continuous gradual, incremental

improvements?• If the answers of above questions are yes then BPR is needed

in the organization.

BPR Methodology

• There are various methodologies given in literatures. • Here a consolidated model adopted from various

methodologies is presented. • In this model there are following steps-

– Plan for Reengineering (Planning)– Map and Analyze process to-be reengineer (Analyzing)– Design alternative process (Designing)– Implement reengineered process (Implementation)– improve process continuously (Continuous Improvement )

Limitations of BPR

• The most frequent and harsh critique against BPR concerns the strict focus on efficiency & technology and the disregard of people in the organization that is subjected to a reengineering initiative.

• Very often, the label BPR was used for major workforce reductions.

• Thomas Davenport, an early BPR proponent, stated that- "When I wrote about "business process redesign" in 1990, I explicitly said that using it for cost reduction alone was not a sensible goal.”

• Michael Hammer similarly admitted that- "I wasn't smart enough about that. I was reflecting my engineering background and was insufficient appreciative of the human dimension. I've learned that's critical." (1996)

• Other criticism are-– lack of management support for the initiative and

thus poor acceptance in the organization. – underestimation of the resistance to change

within the organization. – implementation of generic so-called best-practice

processes that do not fit specific company needs. – Over trust in technology solutions.