Guidance note on Business Process Re-engineering (BPR)

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“Business Process Re-engineering attempts to understand, map and measure the current process, and make performance improvements accordingly. This method is effective to obtain gradual and

incremental performance improvement. “

NOTE:1. This tool/guidance has been developed by the Global Change Management Support Team

under the guidance of the Inter-Agency Task Team for Change Management. It has not been tested at the country level and there are no examples of its application from any country office at this time.

2. Expert team to implement BPR with the help of UNCT guidance.

Table of Contents

1 Introduction 32 What is a process? 43 What is process reengineering? 54 Process Excellence Principles 65 How to do it – Steps in Business Process Re-engineering 7

5.1 Step 1: Identify core processes 85.2 Step 2: Develop As-Is 95.3 Step 3: Analyse As-Is 105.4 Step 5: Test and communicate 13

6 Critical Success and Failure factors in BPR 146.1 Success factors for BPR: 146.2 Fail factors for BPR 14

7 Process Mapping tools 158 Process Mapping software 17

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1 Introduction

When discussing how to improve the way we work within any organization, business process re-engineering is a commonly used tool. Why? The reason is that optimization of business processes to eliminate duplicating or redundant steps can contribute significantly to improving organizational efficiency.

Specifically, this guidance note helps you:

Understand what business process re-engineering (BPR) is all about Be aware of the 7 themes in BPR Familiarize yourself with the tools available Facilitate BPR sessions to improve business processes

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2 What is a process?

If you have ever waited in line at the grocery store, you can appreciate the need for process improvement. In this case, the "process" is called the check-out process, and the purpose of the process is to pay for and bag your groceries. The process begins with you stepping into line, and ends with you receiving your receipt and leaving the store. You are the customer (you have the money and you have come to buy food), and the store is the supplier.

The process steps are the activities that you and the store personnel do to complete the transaction. In this simple example, we have described a business process. Imagine other business processes: requesting a new telephone service from your telephone company, developing new products, administering the social security process, building a new home, etc.

Davenport & Short (1990) define business process as "a set of logically related tasks performed to achieve a defined business outcome". A process is "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 1993). In their view, processes have two important characteristics: (i) They have customers (internal or external), (ii) They cross organizational boundaries, i.e. they occur across or between organizational subunits.

Processes are generally identified in terms of beginning and end points, interfaces, and organization units involved, particularly the customer unit. High impact processes should have process owners. Examples of processes common among UN offices include: developing a programme strategy, procurement process for programme supplies and office supplies, processing of payments, etc.

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3 What is process reengineering?

Improving business processes is paramount for organizations and businesses to stay competitive in the marketplace (be it developmental or otherwise) and provide better products and services.

Business Process Improvement (BPI) efforts attempt to understand, map and measure the current process, and make performance improvements accordingly. This method is effective to obtain gradual and incremental improvement.

Nowadays, organizations across the board want breakthrough performance changes and not just incremental changes. One approach for rapid change and dramatic improvement that has emerged is Business Process Reengineering (BPR).

Michael Hammer & James Champy define reengineering as “the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service, and speed.“1

What BPR isn’t…

Overlaying new software on top of the same business processes Evolutionary

Incremental improvements

Downsizing

Merely reorganizing and restructuring

Single dimension solution

Continuing to maintain status quo

What BPR is…

Starting from scratch and fundamentally changing the way we do business Innovative

Leveraging best practices and enablers

Multi-dimensional, integrated solution

Cross-functional, inter-departmental change

A migration to from activity management process

1 Reengineering the corporation, Michael Hammer, James champy, 2005

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4 Process Excellence Principles

A superior process maximizes client/user value, eliminates waste, and is simple yet flexible with clear links to other processes. In an enabling environment, processes deliver superior client service by being actively owned and managed, measured and outcome focused, in a way which leverages available technology.

Process Excellence Principles (PEP) provide a framework for developing and implementing innovative processes.

Adapted from Accenture PEP principles

Process Outputs Create Value - Processes produce outputs—products and services—that create value for clients. The reengineering phase should redefine and validate the value of the organization’s products and services. Therefore ask yourself the following questions when you need to decide which processes to re-engineer and which design criteria to keep in mind:

1. What products do your clients need? Design the process from the outside in. 2. How can the organization improve the processes that deliver these products? Think beyond

optimizing only internal processes.

Target High Value Processes - Target core processes that are necessary for organizational effectiveness, provide value to clients, and establish a competitive advantage. Those processes must work well, and by doing it well, the UN will be able to gain a higher degree of organizational effectiveness.

Excellent Processes Need Excellent Owners - A process owner has end-to-end responsibility and authority for achieving the outcome(s) of the process. Processes don’t perform well on their own, they need someone accountable for their performance through continuous updating and improvement.

You Get What You Measure - Process measures and targets are the key indicators of an organization’s performance.

Innovate, Don’t Duplicate - Process innovation is about generating, evaluating, and implementing creative solutions that enable Process Excellence.

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5 How to do it – Steps in Business Process Re-engineering

Process Re-engineering is best managed using a process framework with clear steps by which your team will be guided in executing the re-engineering project. The following five steps are the standard:

Much like any other project, the re-engineering project will have to be managed and the selection of the people who will actually do the reengineering is key to the success of the endeavor. In Reengineering the Corporation, Michael Hammer & James Champy proposed the following to be involved in the BPR effort:

BPR Sponsor: Senior executive who authorizes and champions Business Process Reengineering efforts in the organization or its respective department, unit, etc.

Process Owner: A manager with authority and responsibility for a specific process

Reengineering Team: A group of individuals dedicated to reengineering a specific process

Project Board: Decision-making bodies of senior executives who guide, manage, and oversee the BPR project through to implementation

Facilitator: An independent resource to guide and enable the work of each BPR Team. In particular for BPR it is important that the facilitator challenges and supports his/her colleagues. It is oftentimes difficult to think about other ways of doing our work. However, as mentioned before, process re-engineering is not about maintaining status quo and as such it is particularly important that the facilitator challenges us to think innovatively, leverage best practices etc in order to determine the best possible way of designing the process.

Since this toolkit assumes that business process re-engineering is used as an integral part of the change process, some of the above-mentioned roles will already be assumed by stakeholders of the change process. For example the Project Board typically is the Senior Management Team in your office. However, it is still important to ensure that these roles are identified as part of the change efforts and as such it is interesting to list the expectations for each of these roles.

Role of the BPR Sponsor Acts as the champion of reengineering for the organization Articulates the vision of BPR efforts  Motivates and inspires other executives and stakeholders Builds consensus around decisions Allocates organizational resources to ensure BPR success

Role of the Process Owner Responsible for providing leadership to the BPR team, guiding BPR efforts, ensuring BPR business results

are achieved, and driving innovation Acts as an advocate for the process Committed to the BPR effort for the long-term Creates and maintains strategic relationships with the Project Board and key stakeholder groups to ensure

project success

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Role of the BPR Team Manages the BPR project so it is on time and on budget Identifies and collects data needed to perform the As-Is analysis Interacts with stakeholders through forums such as interviews, focus groups, and briefings Researches best practices, industry benchmarks, other CO experiences and technology to enable process

redesign Documents As-Is process model Documents To-Be process model Builds consensus around team decisions Plans and creates capacity building plan (training, transition support, new performance standards and

plans, etc.) Delivers on BPR project goals

Role of the Project Board Provides overall transformational leadership Defines the decision-making process for BPR projects Makes resource and policy decisions regarding BPR efforts Has the authority to change policy Ensures funding, project continuity, and focus Maintains effective relationships with stakeholders Interfaces with the BPR Teams

Role of the Facilitator Plans and facilitates BPR meetings and team deliberations Enables the team to work with valid information Challenges and supports team to be innovative Enables the team to make free and informed choices Facilitates the team in making a commitment to its decisions Guides the team in respecting adopted group norms

Practical facilitation tips – Who to involve? Please make sure to involve the key stakeholders as well as the business process Sponsor and Owner in the reengineering discussions. This may sound obvious – but keep in mind that business processes often affect many units and sometimes also external stakeholders. For example if you are reviewing the procurement process the planning that facilitates bulk procurement (and volume cost and time savings) is important – and therefore it may be essential to educate everyone, also on the programme side, to submit their procurement plans early in the year. As such – in this example – the programme staff need to be part of this discussion.

5.1 Step 1: Identify core processes

Core processes are those that are key to organizational effectiveness, provide value to clients and establish a competitive advantage. The client must care that the process works well and by doing it well, the provider will be able to better position itself.

Within the framework of this toolkit several key business processes have already been mapped. However, when you need to decide how to prioritize your re-engineering efforts, it is beneficial to keep the following criteria in mind:

Time and cost reduction opportunities e.g. target high volume processes Integration factors e.g. office wide implications, supporting knowledge management Client satisfaction e.g. review partner survey to spot opportunities Internal satisfaction e.g. review Global Staff Survey to spot opportunities

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You should identify the core business processes and clearly define the start and end point of each process.

The offices of different agencies, programmes or funds may have various core processes that may require both mapping and re-engineering in the context of UN Coherence, as activities are developed and carried out jointly. Examples of core processes impacted could be:

Programming process Programme finance process Authorization processes Communication process Business operations processes, including different procurement processes, human resources

processes, ICT or finance processes …

Practical facilitation tips – Where to start? Choose 3-5 processes of high volume and financial/time impact on the work and focus on these initially. If you are planning to do a more comprehensive business process review you may want to draft a process model to help you in planning the work and prioritizing which business processes to focus on first (see section 7).

5.2 Step 2: Develop As-Is

Once the core business processes have been identified, the team will have to map the current way of working into a process map. This is called the “as-is” process. The purpose of as-is process map is to gain an understanding of the quality and efficiency of current operations and the existing performance. The benefits of this assessment are to: 

1. Develop a common understanding of the current processes 2. Describe the inputs, sequence (work flow) of steps, hand-offs/transfers, approvals, people, technology,

and business rules involved in producing outputs 3. Identify opportunities for improvement 4. Potentially create a “baseline” of measures (e.g., process time, costs, resources, etc.) that describe

current process performance 5. Identify the gap between client business needs and current performance 6. Identify parts of the current process that are non-value added from the client perspective

The BPR team should include staff from across the office that can help determine the current practice and break up the process in steps. It is suggested to first of all list the different steps involved in the process including the person or team that is responsible for that step e.g.:

Step Responsible

Elaborate specifications  Project personnel

Review specification vs work plan Programme assistant

… …

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Once that list has been completed (and it is verified that all steps are indeed mentioned), the team should map the process using for example the swimlane diagrammes (see below). Some tips are provided to help facilitate these discussions below. The as-is process map is the key deliverable for the as-is development step.

Practical facilitation tip – Mapping the way things are today: A simple yet very effective tool that can be used to facilitate the discussions is to map the business processes using post-it notes. The facilitator can stick several large white papers (for example flipchart paper) on the wall. On these pieces of paper, one can then draw a number of swim lanes. For each swim lane facilitate a discussion about who is involved and denote on the left the ownership of each swim lane, e.g. with “Resident Coordinator”, “UNCT”, “Government”, etc. The team should write the different process steps on the post-its (one process step per post-it). The team can then map the as-is process using the post-its in the swim lanes (see section 7 for an explanation) and subsequently discuss the improvement opportunities. Place the post-its from left to right so as to reflect the sequence of the steps. However, do not write arrows or other links directly on the white paper since - when you change the order of the post-its - these markings will be confusing.

A good aspect of the post-it notes is that one can easily move the process steps from one swim lane to another or alternatively eliminate a step by taking the post-it off the paper. Lastly, the post-it map is easily translated into MS Visio (see section 8) since the same logic and tools are used. An example of such a process map using post-its is provided below.

When you facilitate the mapping of the “as-is” situation you may want to ask two different two groups (ideally each with representation of different units involved) to map the current flow as they understand it – or facilitate this in plenary.

5.3 Step 3: Analyse As-Is

With the current process mapped, the team can focus on determining the baseline and possible improvement opportunities. One can determine the baseline of the as-is process through:

1. Process time analysis – determining how much time each step in the process will take and including time in between steps due to e.g. system requirements.

2. Approvals and handoffs – assess the number and purpose of the approvals and hand-offs 3. Value-added analysis – assessing the process from the client’s perspective i.e. what are the value

added activities for which the client is willing to pay and which directly affect the completion of the product or service provided.

4. Benchmarking – comparing current performance with “peers” e.g. other agency offices, other UN agencies or those organizations considered “best-in-class”. Benchmarking should not be limited to UN and / or development partners but may include private sector organizations.

The last step in the analysis phase is to validate the as-is process model with Process Experts and other stakeholder groups. 

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Practical facilitation tip – How to analyze “as-is”? As a facilitator of the discussion – if possible - try to compare the “to-be” process with that of similar processes in other contexts – or refer to statistics on typical process time.

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Step 4: Design To-Be

When conducting Business Process Re-engineering it is important to stay focused on the goal, i.e. improving the processes, making them more efficient and effective. The result (or the product) of the process needs to be in the spotlight: What is it that we want to achieve or obtain in order to satisfy the client of the process? Keeping the 7 themes of process innovation (7Rs) in the back of your mind during the exercise will help you and your team stay on track and might trigger out of the box thinking. You may even want to go through the detailed questions one by one to ensure that all themes have been taken into account. The 7Rs are:

5.3.1 Rethink What is the root cause of the problem? Why do it this way?  What are the assumptions? Is there a completely different way to accomplish this objective? Should the process be fixed or eliminated? Is there a better, faster, cheaper way to complete the most expensive, slowest, poorest quality

steps?

5.3.2 Reconfigure How can the activity be eliminated? Can we consolidate common activities? Can we reduce reconciliation efforts by putting quality at the source? Can we eliminate handoffs and non-value adding work? How can sharing information with suppliers and clients improve the process?

5.3.3 Reassign How can existing activities be moved to a different unit? How can the activity be outsourced? How can cross-training integrate and compress tasks?

5.3.4 Re-sequence How can predicting increase efficiency? How can postponement increase flexibility? How can we minimize the number of interconnections and dependencies?

5.3.5 Relocate Can the activity be moved closer to the client or the supplier? Can an activity be moved to related activities? How can we reduce travel time and distance? How can geographically virtual organizations be created?

5.3.6 Retool How can technology transform the process? How can the activity be automated?

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Can assets be leveraged to create a competitive advantage? How can skill-level changes improve the process?

5.3.7 Reduce How can we reduce (or increase) the activity frequency? How can critical resources be used more effectively?  Would less information or controls simplify and improve the process? Would more information enable greater effectiveness?

Practical facilitation tip – How to identify improvements? First of all it is particularly important that the facilitator takes on a role of challenging and supporting – i.e. supporting the brainstorming of ideas but also challenging the status quo and new the ideas in a constructive way to test if further improvements can be identified. Oftentimes, the tendency in business process discussions is to maintain status quo since “this is the way we have always done it” or since “HQ will never accept if we do it differently”. These are two examples of the killer phrases often heard during business process brainstorming which are counterproductive. It is critical that the facilitator helps the group to think “outside the box” in order to come up with the innovative ideas that are essential for successful BPR. Using the framework of the 7 themes for Business Process Re-engineering (see step 4 above) the facilitator can ask challenging questions to prompt this innovative thinking. The group also has to accept the facilitator in his/her role as challenging the status quo and this should not be misinterpreted as negatively critiquing his/her colleagues and the way they do the work.

If two groups mapped the “as-is” make one group present their flow – and have the other comment. If you – as facilitator – spot redundant steps or have ideas on process improvements try to challenge the groups by asking “what is the value added by this step?” or “what would be lost if we took out this step?” As it is agreed to remove steps or otherwise reengineer the process (whilst keeping in mind the necessary segregation of duties in line with internal control frameworks) remove the sticky notes. The physical removal of sticky notes can be a powerful message. Ensure that the necessary decision-makers are present – as well as those affected – so that it can be agreed “there and then” that certain steps can be removed or re-organized. Once the process review and reengineering has been done map it electronically – for example by using MS Visio (see section 8) – as illustrated below:

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5.4 Step 5: Test and communicate

With the newly designed process comes the most important element of re-engineering i.e. the challenge of implementing the proposed changes. Communicating changes and determining the impact of the changes to the way we work (i.e. managing change) is an integral part of this toolkit. Therefore, one should ensure that for example the process changes are carried forward into the job design and into the overall change implementation (i.e. Step 6: Implementation)

Having said this, there are some elements of testing and communication that are directly related to this chapter on Improving Processes and as such they are highlighted here. Testing and communication of process changes with stakeholders will help to:

Validate process requirements Ensure linkages to business objectives Solicit further improvement opportunities Manage expectations

Practical facilitation tip – Making it happen: Print out the new business processes and hang them in a place where a lot of staff pass by, e.g. a “change wall” to familiarize staff with the effort and the implications. Make sure to review the job descriptions if significant changes in “who is doing what” have taken place. Agree on when to review the implementation progress and discuss any issues that needed ironing out. Also, to the extent possible agree how long key elements of the process should take as a maximum and “contract” internally to commit to it, e.g. “no more than 3 weeks shall pass from receiving the request to procure goods to delivery of goods – for goods covered by our LTA # such and such”.

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6 Critical Success and Failure factors in BPR

Based on comparative experiences with Business Process Re-engineering in a significant number of private- and public sector enterprises, Accenture has developed the following sets of critical success and fail factors:

6.1 Success factors for BPR: Clear Vision.  Develop a clear vision of the goals and objectives of the organization and of its success. Senior Management Commitment.  Gain strong commitment from senior management from initial planning

through implementation, including identifying an executive sponsor. Project Planning.  Conduct sufficient project planning and preparation with defined scope, roles, and tools for

each phase. Change Management.  Utilize an effective and structured change management process, including developing a

strong communication plan. Staff Support.  Build staff support and buy-in for the proposed solution. Team Commitment.  Gain team member commitment to the project and build a team with the right mix of skills. Understand Business Issues.  Develop a clear understanding of business issues (client needs, performance,

standardization) and the BPR Solution. “Quickly” Review As-Is.  Document and review high-level “as is” business process with a caution against

spending too much time on “exceptions to the rule” and specific cases. Always Have a Goal.  Show progress and demonstrate results by having short, medium and long-term targets. Follow-up, follow-up, follow-up …. To make sure that things get done!

6.2 Fail factors for BPR Lack of Alignment.  BPR effort is not tied to organization goals, objectives and/or client expectations. Lack of Commitment.  Teams cannot ensure success if they lose senior management support or if team

members do BPR “on the side” while they are performing day-to-day tasks. Lack of Communication.  Not everyone is informed early and the staff concerned by the changes are not

engaged throughout the process.  Not everyone is on the same page. Improper/Insufficient Planning.  Changing scope or focus will damage integrity and commitment. Lack of Understanding of Business Challenges. Business case is not clear or is weak, and thus the changes

will not address the real needs of the business. Ignore the End Users.  If the solution designed does not take the needs of the end user into account, change

will not be successful. End users will resist and cannot or will not implement the new process. Ignore the Clients *.  If the processes are not designed to produce the value the client is seeking for, the results

will not be satisfactory and clients may go elsewhere. Team Member Selection.  Without dedicated, strategic thinkers that can champion change, the improvement

process will not succeed. Lack Enabling Technology.  If decisions are made on the basis of the existing technologies (e.g. the bank

cannot provide electronic interface), one will not be able to design the optimal process (e.g. one could change bank in this example).

Easily Overcome by Challenges.  If the team gets bogged down by a specific step in the process and does not keep the bigger picture in mind, the team will loose motivation and may get stuck in a particular phase.

* It is key to keep partners and clients informed on the progress since changes in the business processes might also require changes on their side, e.g. in the way in which they interact with your office. For example, involving national counterparts from NEX projects will enable the office to review of the way the requests are transmitted to the office and streamline the procurement process.

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7 Process Mapping tools

If you consider making a comprehensive effort to improve your business processes you many want to first get an overview of the BPs that you are dealing with. Making a process map can be helpful in this regard.

The purpose of a process model is to provide an activity-oriented description of the work performed. It describes the interaction of people, information, technology, and business rules through a visual framework. First of all, when mapping processes, the level of detail that we want to develop needs to be defined:

A0 is the context diagram and represents the highest-level of a business map. The context diagram is then "drilled down" into more detailed views of the organization or department/unit. It is important to agree on the level to which the model will be created (e.g., Level 2, Level 3).

An example of this model could be as follows:

A0 – Project ManagementA4 – Running a projectA41 – Procure goodsA411 – Develop specificationsA412 – Bidding processA413 – EvaluationA414 – Create contract

Therefore, one will have to drill down into the different core business processes in order to determine the level of detail needed.

To define the activities on each of the different levels in the context diagram, one can use various types of process modeling tools; the most used are the IDEF0 and the ROBI models:

Integrated Definition (IDEF) Methodology IDEF0 is a method used in Business Process Modeling, designed to model the decisions, actions and activities of an organization or system. Diagrams are based on simple boxes with arrow graphics and text labels.

ROBI Model Defining activities through Resources, Outputs, Business rules and Inputs. The ROBI model also introduces the aspect of time needed for each activity (minimum, most likely, maximum).

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Irrespective of the actual model used to define the activities, one can proceed by mapping these in a process flow to visualize the dependencies and timeline between the activities. There are two important tools that can be used for this process mapping:

Swim lane methodology Swim lane diagrams are drawn so the activities performed by each business function, department, or location are in different horizontal rectangles, or lanes giving rise to the swim lane name. Each activity will be mapped into swim lanes and as such be assigned to a person or team as part of their responsibility.

RAVIC responsibility charting RAVIC is a commonly used technique for responsibility charting in order to identify where one role ends and another begins. For the activities brought forward in the business processes, one has to decide who is Responsible, who is Accountable, who can Veto or block, who needs to be Informed afterwards and who needs to be Consulted beforehand. The RAVIC methodology is particularly helpful when there are many stakeholder involved in a process, either directly or indirectly through consultations and communications.

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8 Process Mapping software

The business process flows are created with the Microsoft Visio software, which you will need to install in order to be able to manipulate the files. You can download a trial version of the software (30 days) by clicking on the following link (please note that you need a good internet connection to download this).

The Visio software will allow you to tailor the "template business processes" so that they reflect the business processes of your CO. If you feel like learning more about the software, a fairly good training package can be found through the following link (you will have free access to these training tools).

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