Day 2

1
Day 2

• Key Issues around BPR and Evolution of
  BPR
• for E-Business

2
Learning objectives

• BPR waves and outcomes
• BPR triggers and targeted processes
• BPR project success and failure
• More on
• BPR methodologies
• Role of IT and IS function in BPR projects
• Illustration The Cigna experience
• Application exercise The shaping and supporting
  IT

3
Evolution of BPRWaves of business process
improvement

• Degree of IT enablement

Knowledge Management
Web-enabled e-business
Time-based competition
2nd-wave BPR
1st-wave BPR
TQM
Richness of business transformation
4
Evolution of BPR and outcomes

• TQM (Early 80s)
• Continuous incremental BP improvement with no
  role for IT
• Outcome More consistency in BP outputs
• 1st wave BPR (Early 90s)
• IT-based BP improvement
• Outcome IT-enabled processes ?bad timing
  unrealistic expectations
• Time-based competition (Since the 90's)
• IT-based improvement of BP directly linked to
  corporate strategy
• Outcome Faster and leaner critical BP
• Web-enabled e-business (Since late 90's)
• IT-based improvement of cross organizational
  processes
• Outcome Increased collaboration / income using
  e-commerce
• Knowledge management (Since 2000)
• IT-based capture of information needed to improve
  BP and decision making
• Outcome Knowledge creation (such as best
  practices)

2nd wave BPR
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BPR projecttriggers and targeted processes

• Triggers
• Unsatisfied customers / competitive pressure
• High costs / reduced profits
• Long cycle time
• Awareness of broken processes / better-known way
  to do business
• Targeted processes
• Highly structured
• Easily supported by IT
• Direct impact on customers
• Improvement opportunity
• Processes most often targeted in the last few
  years
• Order fulfillment and customer service processes
• Supply chain management processes
• Medical / Insurance claims
• Expense reports

see next slide
6
Setting process priority (Harrington, 91)
Customer impact
high
medium
low
low medium
high
Improvement opportunity
7
Success and Failure of BPR projects

• 67 of projects produce marginal or failed
  results (CSC Index)
• Failure
• Organizational / behavioral issues
• Project management failure
• Technical failure NOT PERFORMING AS EXPECTED
• Marginal effects
• Wrong process
• Improving chances of success
• Clear objectives in sync with business strategy
  (Low cost, differentiation, new market, new
  income)
• Methodology (see next slide) and tools
• Manageable scope
• Process management
• Continuous monitoring and reengineering of
  business processes
• Process owner responsible for the management of
  business process

8
BPR Methodologies

• Generic commonalities 5 phases (BPR in the
  BIG)
• Vision Scoping
• Project mobilization Modeling
• Process redesign (5 phases) Analysis
• Implementation Redesign
• Maintenance Integration plan
• Good BPR methodology
• Comprehensive to address each of the phases of
  BPR
• Includes disciplined method for coordination of
  the phases
• ?Survey of BPR methodologies Kettinger et al.
  (1997)

9
Role of IT in BPR Projects

• BPR software/tools supports the development phase
  of BPR projects
• Used for business process modeling, analysis and
  redesign
• Capture IT requirements (CASE tools capture user
  requirements)
• Some generate the code for workflow systems that
• Automate the execution of business processes
• Digitize documents and forms and route them to
  people
• IT shapes and supports business processes during
  the deployment phase
• Automates and speeds up processes
• Breaks assumptions of physical world
• Enables coordination
• Enables a more effective creation and sharing of
  information / knowledge
• Critical IT Any IT solution that enhances
• The movement of physical paper documents
  (workflow systems)
• The capture, movement and generation of
  information (TPS, EAI, SOA and ERP)
• The creation and management of knowledge (DST,
  groupware and ERP)

10
IS Function and BPR Projects

• Role
• Partner Gives situation on IT infrastructure and
  possibilities
• Catalyst Initiates the project
• Needed skills
• Business process thinking BP orientation and
  role of IT
• IT infrastructure awareness
• Systems analysis and design skills / RAD skills

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The Cigna Experience 1/2Caron et al. (1994)

• Objectives
• Until 91 Streamlining of operations
• Lower costs
• Reduced cycle time
• After 91 Growth in business
• Satisfied customers
• New markets
• New customers

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The Cigna Experience 2/2
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Application exercise 2nd wave BPR

• How does a methodology help in BPR projects?
• How does software tools help during the
  development phase of a BPR project?
• How can computer-based applications help
• Define a business process?
• Automate a business process?
• Integrate a cross-functional business process?
• Monitor in real-time the execution of a business
  process?

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Thank you