One

1
One

• Principles and dimensions of Business Process
  Re-engineering Functions and Processes.
• Value Chain analysis, scale and scope of
  processes and value engineering applied to
  processes. Levels of processes.

2
What is BPR?
3
What is BPR?Definitions

• Business Process Re-engineering
• the fundamental rethinking and radical redesign
  of an entire business operation to achieve
  dramatic improvements in critical measures of
  performance.
• Hammer Champy
• Business Process Re-design
• the fundamental rethinking and radical redesign
  of business processes to achieve dramatic
  improvements in critical measures of
  performance.

4
What is BPR?Definitions

• An integrated programme of change that ...
• delivers substantial, measurable improvements,
  often rapidly.
• usually involves cultural and job/role changes
  and must be managed accordingly.
• is typically enabled through IS/IT.
• Involves creative thinking (breaking old
  rules).

5
What is BPR?Definitions

• An integrated programme of change that ...
• is sponsored by top/senior management rather than
  the IS/IT function.
• is driven from the top down, rather than bottom
  up.
• begins and ends with customer value.
• applies to multiple business functions,
  departments and/or locations, ie, it is process
  based.

6
What is BPR?BPR Rationale

• BPR model of world
• Work is controlled by the customer
• Financial success from being good at operations
• Work carried out within integrated processes
• Excellence stems from good process design
• Change is expected continually

• Traditional model of world
• Work is controlled by the managers
• Financial success comes from good budgeting and
  financial control
• Work is carried out by separate functional
  departments
• Process excellence stems from good people
• Change is expected only occasionally

7
What is BPR?Real BPR vs Restructuring
Some companies have introduced what they think is
process working but ...

• have they just eliminated some middle management?
• have they changed the functional structure but
  kept the processed the same?
• have they introduced a revolution or merely
  patched up the conventional structure and system?

8
Demand for BPR

• Significant corporate restructuring is a likely
  consequence of environment change.
• In many companies IT is not aligned with
  business needs.
• BPR projects should drive IS/IT projects.
• IS/IT is the key enabler of BPR.

9
The Euphoria

• Dont automate, obliterate
• Sweep away job definitions
• Break loose from outmoded thinking
• Conventional change is like rearranging the deck
  chairs on the Titanic
• The solution to bloated, clumsy, rigid,
  sluggish, non-competitive, uncreative, disdainful
  of their customers needs, and losing money
  (Hammer and Champy)

10
Features of BPR 1

• Re-engineering determines
• what an organisation should do
• how it should do it
• what the concerns should be ...
• NOT what they currently are
• Radical change NOT gradual change
• IT seen as an important enabler of change NOT a
  key driver of change

11
BPR covers

• jobs
• structure
• values
• beliefs
• management
• measurement systems
• in addition to process redesign

12
What is BPR?What is a Process?
a collection of activities that takes in one or
more kind of input and creates an output that is
of value to the customer. - Hammer Champy
(1993) Reengineering the corporation a
manifesto for business revolution
13
BPR RationaleWhy addresses processes?

• Streamline by eliminating non-value adding
  activities
• less cost
• better service
• shorter lead times
• greater competitiveness
• opportunity to gain market share

14
Process Innovation (Davenport 1993)

• Develop the business vision and process
  objectives
• Identify the processes to be redesigned
• Understand and measure the existing process
• Identify the IT levers
• Design and build a prototype of the new process

15
(No Transcript)
16
BPR and ITAn Enabling Technology
Measurement
Jobs
Jobs
A collection of business activities that creates
value for the customer
People
Infrastructure
Activities
Operations
IT
17
BPR and ITAn Enabling Technology

• IT should not simply be thought of as a way of
  automating existing this is a 1960-80s view.
• A new IT system might require a change in
  business processes.
• ISE-BPR, or Information Systems Enabled BPR
  considers IT and business processes together.

18
BPR and ITAn Enabling Technology

• What IT?
• Off-the-shelf systems eg, MS Office.
• Configured/Customised systems eg, SAP
• Totally Bespoke systems
• ISE-BPR require excellent broad knowledge of what
  IT technology are available and where they are
  viable.

19
IT Levers

• Transactional
• Geographical
• Automating
• Analytical
• Integrating

• Informational
• Sequential
• Knowledge orientating
• Tracking
• Simplifying

20
Business Process Re-Engineering

• ... And now the reality (Champy) ...
• most projects unsuccessful ...
• we forgot the people

21
Dimensions and Characteristics
Fundamental changes to processes, technology
and human factors to achieve dramatic
improvements in key measures
Balanced attention to processes, people and
technology Cross functional, process based
perspective Judged by measurable results achieved
22
And why is it different?

• High ambition
• - order-of-magnitude improvements in key
  performance measures, such as cost, quality,
  service or speed
• Process focus
• - a customer-oriented viewpoint, ignoring
  functional and organisational boundaries
• Creative rule-breaking
• - finding challenging fundamental assumptions
  about normal business practice, addressing
  customers needs rather than wants
• Information technology to enable the above
• - IT as an enabler of new ways of working, rather
  than as a driver change through substitution and
  automation

23
The business operation
The business operation diamond
Business Processes
determine
enable
Values and Beliefs
Jobs and Structure
Management and Measurement Systems
require
foster
24
The impact of BPR
The business operation diamond in context
Competitor actions
Technological and environmental factors
Customer needs
Assessment of capabilities
Business Processes
INFRASTRUCTURE
Values and Beliefs
Jobs and Structure
Management and Measurement Systems
25
The impact of BPR
The four criteria that distinguish BPR

• High ambition
• Process focus
• Creative rule-breaking
• Information technology to enable the above

26
The Essence of Process Re-engineering
Marketing
Sales
Manufac
Finance
Other
Product/ Service Development
Concept to prototype
Customer Acquisition
Target to customer order
Order Fulfillment
Quote to cash
Procurement
Requisition to payment
Customer Service
Enquiry to resolution
Management Process
Investment to outcome
27
Firm Infrastructure
Human Resource Management
PROFIT
Technological Development
Procurement
Service
PROFIT
Inbound Logistics
Outbound Logistics
Marketing and Sales
Operations
28
Firm Infrastructure
Financial Policy
Regulatory Compliance
Community Affairs
Accounting
Legal
Human Resource Management
Flight/ Route and Yield Analysis Training
Baggage Handling Training
Pilot Training Pilot Safety
Agent Training
Inflight Training
Technological Development
Computer Reservation System/ Inflight System/
Flight Scheduling System/ Yield Management System
Product Development Market Research
Baggage Tracking System
Procurement
Information Technology Communications

• Route selection
• Passenger
• service system
• Yield
• management
• system (pricing)
• Fuel
• Flight scheduling
• Crew
• scheduling
• Facilities
• planning
• Aircraft
• acquisition

• Ticket counter
• operations
• Gate operations
• Aircraft operations
• Onboard services
• Baggage handling
• Ticket office

• Baggage system
• Flight connections
• Rental car and
• Hotel reservation
• system

• Promotion
• Advertising
• Advantage
• programmes
• Travel agent
• programmes
• Group sales

• Lost baggage services
• Complaint follow - up

Inbound Logistics
Outbound Logistics
Marketing and Sales
Operations
Service
29
The demand for BPR.......

• Significant corporate restructuring is likely
• BPR projects should drive IS/IT projects
• Many companies IT is not aligned with business
  needs
• Technology suppliers lack understanding of their
  customers needs
• Most UK companies are adverse to the neutron
  bomb approach
• IS/IT is the key enabler of BPR

30
Typical benefits BPR produces
Re-engineered Process
Resulting Benefits

• Lower inventory levels
• Reduced scrap and rework

Materials Management

• Higher materials quality
• Reduced materials costs

Procurement

• Faster cash availability
• Reduced manual labour

Invoicing/Accts receivable

• Lower order errors and rework
• Improved customer satisfaction

Order Management

• Faster product to market
• Increased innovation

Product Development

• Faster customer response
• Higher market penetration

Customer Support
31
The BPR Life Cycle?
32
BPRLifecycle
Process (Re)design
Strategic Analysis
Process Analysis
Strategy Definition
33
Strategic Analysis

• STEEP
• Porters 5 Forces
• SWOT

34
Strategy Definition

• Mission Statements/Aims
• Objectives

35
Process Analysis

• Metrics
• Data Capture
• Benchmarking
• Process Modelling

36
Process (Re)design

• Metrics
• Process Modelling
• Job Design (Socio-Technical issues)
• IT
• Selling
• Management