REENGINEERING

1
REENGINEERING PROCESS INNOVATION

• IS4800 Session 1
• Prof. Mark Nissen

2
Agenda

• Systems Process Management
• Key BPR Concepts Definitions
• BPR Life Cycle Process Redesign
• KOPeR Redesign Method
• Cases Examples
• Relevant Current Research

3
Systems Process Management

• Systems
• Systems of Systems
• Management of Systems
• Processes
• Process Flows
• System-Process Relations
• Design of Processes

4
Systems
System (goal)
Inputs
Outputs
Transformation function
Boundary
Environment
5
Systems of Systems
Supersystem
6
Aircraft System Design
Configuration
Wing Area
System
Thrust
Plastic
FBW
Weight
Environment
7
Management of Systems

• Controllable systems elements
• Inputs
• Outputs
• Transformation function
• Goal
• Environment
• Uncontrollable systems elements?
• Boundary is critical to analysis

8
Processes
Controls
Process (spec)
Inputs
Outputs
Process activities
Environment
Enablers
9
Process Flows
Inputs
Outputs
Process activities
Process - Level 1
Subprocess - Level 2
Control/Enabling Processes
Environment
10
System-Process Relations
System
Environment
Process
Environment
11
Managing Process Change

• Designable process elements
• Inputs
• Outputs
• Specifications (Goals)
• Controls
• Enablers
• Environment
• Non-Designable process elements?
• Scope pace of change critical

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Reengineering

• Powerful approach to process innovation
  reinvention
• Responsible for much of DJIA 8000
• Follows TQM 1T investment in IT
• Synthesis of old new methods
• Marshals many techs resources
• Major organizational undertaking

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BPR Defined

• BPR (Hammer Champy)
• the fundamental rethinking and radical redesign
  of business processes to achieve dramatic
  improvements in critical, contemporary measures
  of performance
• Innovation (Davenport)
• revolutionary, process approach to effect
  quantum, multiplicative improvements in business
  performance

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Process Focus

• Cross-functional
• Inherently dynamic
• How not what or who
• Contrast/conflict with current orgs
• Functional division of labor
• Job specialization
• Unified chain of command
• Centralized control
• Checking reconciliation

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Reengineering Exemplars

• Commercial
• IBM Credit (2 weeks --gt 4 hours)
• Ford A/P (500 people --gt 125 --gt 5?)
• Federal Mogul (20 weeks --gt 20 days)
• Northrop S/W procurement (71 days --gt 8)
• Government
• IRS (collections 33, staff - 50)
• DoD spectrum assignment (6 mo --gt 3 wk)
• DIS (145 days --gt 120)?
• SPEDI, AF ADPE procurement, others

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BPR Overview

• Most major corporations involved
• 30B including expenses systems
• Also gov, mil, edu, org, others
• Focus on downsizing
• IT as central enabler
• 50-75 failure rate
• High risk, high return venture
• BPR vs. TQM?

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Efficiency vs. Efficacy

• Efficiency
• Focus on process inputs
• Cost cycle time measures
• Efficacy
• Focus on process outputs
• Quality performance measures
• Relations
• Low cost --gt resources for quality, perf, qty
• Low CT --gt fast, flexible response, change

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BPR Example

• Credit Financing process
• Big ticket electronic equipment
• Key part of order fulfillment
• Customer, sales, credit, delivery VCs
• Independent, bureaucratic credit org
• 6-14 days cycle time for credit package
• No capability for internal tracking
• Losing customers tired of waiting

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Credit Financing Process
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Credit Financing - Level 1
Basic structure - Attributed Digraph
Credit Credit Terms
Pricing Quotation Request
Check Develop
- Level (1) - Agent(Check) - Org(Credit
Financing) - Tools(Credit DB) -
Communication(Paper)
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BPR Life Cycle

• Vision
• Process identification
• Process redesign
• Redesign implementation
• Continuous improvement
• Continuous reengineering?

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BPR the Employee View
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Process Redesign

• Central analytical process in BPR
• Critical to success
• Parallels IS analysis design
• Analytical, upstream activities
• Key to implementation maintenance
• Two major approaches
• Greenfield (aka blank sheet of paper)
• Baseline transformation (as-is --gt to-be)
• Advantages disadvantages?

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Consultants To Be Scenario
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Baseline Transformation

• Principal steps (from Davenport)
• Describe current process flow
• Measure baseline process
• Diagnose process pathologies faults
• Identify enablers transformations
• Generate redesign alternatives
• Prototype test redesigns

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Potential of AI for BPR

• Knowledge-intensive work
• Process knowledge
• Enabling technologies
• Change-management tactics
• Redesign involves familiar AI activities
• Knowledge representation (processes)
• Problem diagnosis (pathologies, faults)
• Treatment matching (WF, OD, IT, IO, AL)
• Articulation of BPR methods Cases

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Primary Approaches

• Case-based reasoning (CBR)
• Mirrors consultant problem solving
• Org/process similarities abundant cases
• Details are important (hard to index)
• Emulate/automate 50-75 failure rate?
• Measurement-driven inference
• Address idiosyncrasies details directly
• Basis for cross-process comparability
• Track process innovation/improvement
• Effective, rule-based exemplars

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KOPeR Redesign Method
Select
Implement
Model
Measure
Test
Process
Diagnose
Generate
Predict
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Graph-Based Representation
Measurements Size 4 Paths 2 Length
3 Breadth 2 Depth 1 Reviews 1 Manager_act
1 IT_support 3 Documents 3
B
doc1
- price - analyst - DSS
doc1 doc 2
A
D
Breadth
doc1 doc3
- prep - analyst - word_proc
- review - manager - nil
doc1
C
- terms - analyst - word_proc
Depth
Length
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KOPeR Problem Solving
Class Level (10x7)
Classes of pathologies
Classes of transforms
Match with classes of solutions
- Classify shortcomings - Obtain
measurements
- Specialize refine - Generate
alternatives
Specific redesigns
Problem instances
Instance Level (MxN)
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Three Rule Classes

• Filtering (transformation class)
• high_specialization --gt bureaucracy --gt OD
• Specialization (general transformation)
• OD high_specialization --gt combine jobs
• Refinement (specific transformation)
• combine jobs --gt case manager/team --gt
  IO/expert_support --gt FIND jobs

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G2 Environment
KOPeR Functions - Measurement - Diagnosis -
Generation
Remote clients
Internet
Web link
Knowledgebase - Process models - Measurement -
Pathologies - Transformations
Local client
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Aircraft System Design
Configuration
Wing Area
System
Thrust
Plastic
FBW
Performance - Speed - Altitude -
Maneuverability - Visibility
Weight
Environment
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Process Redesign Model
Configuration
Performance
Environment
Transform
Strategy
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A Consultants View of Reengineering Success
See, a perfect fit
Worked great for our other clients
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Transformation Technologies
Workflow Technology
Structure
Configuration
Performance
Information Management
People
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Configuration Dimensions Variables
Configuration
Performance
- Space (statics) length, breadth,
depth - Structure (AI, system dynamics)
feedback, parallelism, size - Dependency
(AI, coordination)
decomposability, producer-consumer, shared -
Organization (STS) job
specialization, centralization, job scope -
Technology (IS) IT-Support,
-Communication, -Automation
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Acquisition Redesign Example

• Procurement processes (3)
• JA (small, simple)
• RFP (medium, average)
• LCP (large, complex)
• Major military sites (aviation)
• Approximately 220 contracts personnel
• Approximately .75B/yr
• Well-managed organization (TQM etc.)

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Defense Acquisition Deskbook
Inputs
Outputs
1 Process Information
Process - Level 1
Subprocess - Level 2
1.1
1.2
1.3
1.4
Define Rqmts
Plan Acq Mgmt Strat
Solicit Award K
Manage/Dev Prods Servs
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JA Process - Level 1
Basic structure - Attributed Digraph
Customer JA doc CS
Approvals File
assist assign

- Level (1) - Type (A) - Agent(CS) -
Cardinality(1) - Org(Procurement) - Inputs(Stub,
rqmts) - Outputs(JA_draft) - Tools(NIL) -
Communication(Paper)
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JA Level-2 Approvals
Task List 11 Legal review 10 KO review 8 RACA
review 6 PACA review 3 NAVAIR review
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JA Process Measurements
indicates theoretical minimum for measure
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JA Redesign Alternatives
indicates superiority by process experts
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JA Redesign Performance
indicates exceeded performance-doubling
threshold
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JA Process Specification
indicates theoretical minimum for measure
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Relevant Current Work

• Acquisition domain focus
• Acquisition process redesign
• Intelligent contracting PM agents
• Logistics planning sentinels
• Agent-based supply-chain mgmt
• KOPeR research tool
• Compare vs. human consultant
• Simulate many redesigns combinations
• Manager-in-the-loop simulation
• Lab/field experimentation

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REENGINEERING PROCESS INNOVATION

• IS4800 Session 1
• Prof. Mark Nissen

http//web.nps.navy.mil/menissen/is4800/bprlect.p
pt