The Hammer Definition of BPR

1
The Hammer Definition of BPR

• Radical redesign of business processes
• What BPR is
• What BPR is not
• Hammer, Michael, et al., REENGINEERING THE
  CORPORATION A Manifesto for Business
  Revolution, New York Harper Collins, Publishers
  Inc., 1993.

2
Other References on BPR

• Champy, James, REENGINEERING MANAGEMENT, New
  York Harper Business, 1995.
• Hammer, Michael, et al., THE REENGINEERING
  REVOLUTION, New York Harper Business, 1995.
• Jacobson, REENGIENEERING WITH OBJECT TECHNOLOGY,
  1995.
• Taylor, David A., BUSINESS ENGINEERING WITH
  OBJECT TECHNOLOGY, wILEY, 1995.

3
Some Common Benefits of BPR

• There is enterprise integration
• Departments are consolidated
• Several jobs are combined into one job
• Workers are empowered
• There is both horizontal and vertical
  reorganization
• Handoffs are eliminated
• There are fewer rules and less coordination is
  required

4
Some Common Benefits of BPR, Contd

• Number of steps in a process are reduced
• This is simplification
• Inspections, checks and controls are reduced or
  eliminated
• The steps are performed in a more natural order

5
Some Common Benefits of BPR, Contd

• Like Process Improvement, steps are reassessed
• Can it be eliminated
• Can it be taken off line
• Can it be performed in parallel
• Can it be combined
• Is it a bottleneck
• Can its mean be reduced
• Can its variance be reduced
• WHAT IS ITS COST???

6
Some Common Benefits of BPR, Contd

• Processes differ by the type of job being
  processed
• Not just one process but many are employed
  depending on the size of the job
• Work is performed where it makes the most sense
• Wal-Mart moves the replenishment function to its
  suppliers

7
Some Common Benefits of BPR, Contd

• Reconciliation is minimized
• A case manager provides a single point of contact
• Hybrid centralized/decentralized operations are
  prevalent
• IT enables decisions to operate autonomously

8
Benefits of elimination of handoffs

• No transits
• No waiting for another operator
• No waiting in queues
• No setups
• No supervision/coordination required

9
EXAMPLES

• Ford
• IBM Credit
• McKesson Pharmacueticals
• Kodak
• XEROX
• Motorola

10
How information technology provides important
business solutions

• Managers must learn to think inductively
• Information can appear instantaneously in as many
  different places as needed
• Generalists can do the work of experts with
  expert systems
• LETS EXAMINE THESE MORE CLOSELY

11
Information can appear in as many places as
needed simultaneously

• Shared databases make this possible

12
A generalist can do the work of an expert

• Expert systems make this possible

13
Business can simultaneously reap the benefits of
centralization and decentralization

• Wide-area, data-communication networks make this
  possible

14
Decision-making is part of everyones job

• Decision support tools (database access combined
  w/ modeling software)

15
Field personnel can send and receive information
wherever they are

• They dont need an office at headquarters any
  more
• To receive and send mail, all they need is a
  notebook with cellular telephone technology modem

16
Contacts with potential buyers need no longer be
personal

• E-mail enables detailed interaction
• Southwestern Bell gets their C programmers out
  of India at 10-15 per hour

17
Planning is instantaneous and continuous due to IT

• Manufacturers gather data on
• product sales, raw materials price and
  availability, labor supply and produces a master
  production schedule
• This can now be done instantaneously by computer
  based on real-time data

18
Planning is instantaneous, Contd

• Companies must make technology exploitation one
  of there core competencies if they are to succeed
  in a period of ongoing technological change
• If you can buy it, its not new

19
Planning is instantaneous, Contd

• Know what youre going to do with technology
  before it becomes available
• It is entirely possible to stay three years ahead
  of the market on technology

20
Who will re-engineer

• Leader
• Process owner
• Re-engineering team
• Steering Committee
• Re-engineering czar

21
TASKS of the Re-engineering team

• 1) determine measures of performance
• 2) install measures of performance
• 3) delineate entire existing process in all its
  gory detail
• 4) perform process value analysis and
  activity-based costing
• 5) benchmark processes by comparison with other
  processes

22
TASKS of the Re-engineering team, Contd

• 6) design re-invented process
• 7) simulate re-invented process
• 8) prepare report with recommendations
• 9) install re-invented process
• 10) measure improvements

23
Re-engineering Opportunities

• Product development concept to prototype
• Sales prospect to order
• Order fulfillment order to payment
• Service inquiry to resolution

24
Symptoms of a sick process

• Extensive information exchange, data redundancy
  -- process fragmentation
• Inventory buffers and other assets -- slack to
  cope with uncertainty
• High levels of checking, inspection and control
  -- fragmentation

25
Symptoms of a sick process, Contd

• Lots of rework and iteration -- inadequate
  feedback
• Complexity, exceptions and special cases --
  accretion onto simplicity

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Principles of good process design

• Start with a vision
• Decide upon approach
• As few people as possible involved in the final
  process
• Lots of involvement, empowerment and ownership

27
Principles of good process design, Contd

• Simplicity, simplicity, simplicity
• Make it fun, make it easy
• Focus on outcomes
• Shortened cycle times
• Lower cost
• Higher quality
• Higher throughput
• Simulate the prototype