Business Process Reengineering CEM 515 For: By: Dr. Abdulaziz Bubshait

Business Process Reengineering CEM 515 For: By: Dr. Abdulaziz Bubshait Hassan Al-Bekhit

Presentation Outline General Introduction Business Process Reengineering BPR Symbols Understand and be able to implement a BPR Strategy Understand the main challenges in implementing a BPR Strategy Conclusion: Summary

Spectrum of Change Automation Rationalization of procedures Reengineering Paradigm shift

Automation refers to computerizing processes to speed up the existing tasks. improves efficiency and effectiveness.

Rationalization of Procedures refers to streamlining of standard operating procedures, eliminating obvious bottlenecks, so that automation makes operating procedures more efficient. improves efficiency and effectiveness.

Business Process Reengineering refers to radical redesign of business processes. Aims at eliminating repetitive, paper-intensive, bureaucratic tasks reducing costs significantly improving product/service quality.

Paradigm Shift refers to a more radical form of change where the nature of business and the nature of the organization is questioned. improves strategic standing of the organization.

Business Process Reengineering “Reengineering is 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.” 3

Key Words Fundamental Why do we do what we do? Ignore what is and concentrate on what should be. Radical Business reinvention vs. business improvement 4

Key Words Dramatic Reengineering should be brought in “when a need exits for heavy blasting.” Companies in deep trouble. Companies that see trouble coming. Companies that are in peak condition. Business Process a collection of activities that takes one or more kinds of inputs and creates an output that is of value to a customer. 5

BPR & The Organization

BPR is Not? BPR may sometimes be mistaken for the following five tools: 1. Automation is an automatic, as opposed to human, operation or control of a process, equipment or a system; or the techniques and equipment used to achieve this. Automation is most often applied to computer (or at least electronic) control of a manufacturing process. 2. Downsizing is the reduction of expenditures in order to become financial stable. Those expenditures could include but are not limited to: the total number of employees at a company, retirements, or spin-off companies.

BPR is Not? 3. Outsourcing involves paying another company to provide the services a company might otherwise have employed its own staff to perform. Outsourcing is readily seen in the software development sector. 4. Continuous improvement emphasizes small and measurable refinements to an organization's current processes and systems. Continuous improvements’ origins were derived from total quality management (TQM) and Six Sigma.

Improvement-Similarities Similarities Basis of analysis Performance measurement Organizational change Behavioral change Time investment Reengineering Continuous Improvement Process Rigorous Significant Significant Substantial Process Rigorous Significant Significant Substantial 16

Improvement-Differences Differences Level of change Starting point Participation Typical scope Risk Primary enabler Type of change Reengineering Continuous Improvement Radical Clean slate Top-down Broad, cross-functional High Information technology Cultural and structural Incremental Existing process Bottom-up Narrow, within functions Moderate Statistical control Cultural 17

What is a Process? A specific ordering of work activities across time and space, with a beginning, an end, and clearly identified inputs and outputs: a structure for action.

What is a Business Process? A group of logically related tasks that use the firm's resources to provide customer-oriented results in support of the organization's objectives

Why Reengineer? Customers Demanding Sophistication Changing Needs Competition Local Global

Customer Demands expect us to know everything to make the right decisions to do it right now to do it with less resources to make no mistakes expect to be fully informed

Why Reengineer? Competition Local Global Change Technology Customer Preferences

Business Process Reengineering WHY ? Integrate people, technology, & organizational culture To Respond to rapidly changing technical & business environment and customer’s needs to achieve Big performance gains

Why Organizations Don’t Reengineer? Complacency Political Resistance New Developments Fear of Unknown and Failure

Performance BPR seeks improvements of Cost Quality Service Speed

BPR Symbols

Business Process Flowchart Symbols An Activity A Document A Decision Data (input as outputs)

Business Process Flowchart Symbols A Predefined Process Start The Start of a Process End The End of a Process Representing a Relation

Business Process Flowchart Symbols Continuation of the process at the same page at an equal symbol with the same number. Used when a relation arrow crosses another relation arrow Off-Page Connector - Process will continue on the next page Integration Relation - A relation to another module is identified and described

Data Flowchart Symbols An Activity A Document A Decision Flat Data File (input as outputs)

Data Flowchart Symbols Manual Data Item A Database File Representing a Relation Continuation Off-Page Connector

Rules For Data Symbols

Rules For Data Symbols Start Symbol used to identify the start of a business process Generate Purchase Order OK? Activities must be described as a verb Yes Decisions have only two possibilities (Yes & No) No Crossing lines are not allowed End If one side of the decision has no further processes defined this symbol has to be used

Rules For Data Symbols I Purchase Order A Posting of Bonus Continuation symbol within the same number must be present twice on the same page Name the document Off- Page Connector is used to continue a process at the next page or to let the process to flow over at the previous to the next page. If more than one is needed use A, B, C, D Name the data

Rules For Data Symbols Sub-Process Delivery BC 4.04 Predefined Processes always have a relation to level and stream by a number in the line below a sub-process description A predefined process must be described in a different flowchart. To make the relation clear between the predefined process and the belonging flowchart a unique alpha numeric number should be assigned to this predefined process.

Version Management For different versions of a business process or data flow some mandatory information must be on the flowchart. Name of the business process Unique number of the business process Revision number Date of last change Author Page number with total pages

Implementing a BPR Strategy

The C’s related to Organization Re-engineering Projects The 3C’s of organization Reengineering: The 4C’s of effective teams: - Customers - Commitment - Competition - Change - Cooperation - Communication - Contribution

Key Steps Select The Process & Appoint Process Team Understand The Current Process Develop & Communicate Vision Of Improved Process Identify Action Plan Execute Plan

1. Select the Process & Appoint Process Team Two Crucial Tasks Select The Process to be Reengineered Appoint the Process Team to Lead the Reengineering Initiative

Select the Process Review Business Strategy and Customer Requirements Select Core Processes Understand Customer Needs Don’t Assume Anything

Select the Process Select Correct Path for Change Remember Assumptions can Hide Failures Competition and Choice to Go Elsewhere Ask - Questionnaires, Meetings, Focus Groups

Appoint the Process Team Appoint BPR Champion Identify Process Owners Establish Executive Improvement Team Provide Training to Executive Team

Core Skills Required Capacity to view the organization as a whole Ability to focus on end-customers Ability to challenge fundamental assumptions Courage to deliver and venture into unknown areas

Core Skills Required Ability to assume individual and collective responsibility

Use of Consultants Used to generate internal capacity Appropriate when a implementation is needed quickly Ensure that adequate consultation is sought from staff so that the initiative is organization-led and not consultantdriven Control should never be handed over to the consultant

2. Understand the Current Process Develop a Process Overview Clearly define the process Mission Scope Boundaries Set business and customer measurements Understand customers expectations from the process (staff including process team)

2. Understand the Current Process Clearly Identify Improvement Opportunities Quality Rework Document the Process Cost Time Value Data

3. Understand the Current Process Carefully resolve any inconsistencies Existing -- New Process Ideal -- Realistic Process

3. Develop & Communicate Vision of Improved Process Communicate with all employees so that they are aware of the vision of the future Always provide information on the progress of the BPR initiative - good and bad. Demonstrate assurance that the BPR initiative is both necessary and properly managed

3. Develop & Communicate Vision of Improved Process Promote individual development by indicating options that are available Indicate actions required and those responsible Tackle any actions that need resolution Direct communication to reinforce new patterns of desired behavior

4. Identify Action Plan Develop an Improvement Plan Appoint Process Owners Simplify the Process to Reduce Process Time Remove any Bureaucracy that may hinder implementation

4. Identify Action Plan Remove no-value-added activities Standardize Process and Automate Where Possible Up-grade Equipment Plan/schedule the changes

4. Identify Action Plan Construct in-house metrics and targets Introduce and firmly establish a feedback system Audit, Audit, Audit

5. Execute Plan Qualify/certify the process Perform periodic qualification reviews Define and eliminate process problems Evaluate the change impact on the business and on customers Benchmark the process Provide advanced team training

Information Technology & BPR

Benefits From IT Assists the Implementation of Business Processes Enables Product & Service Innovations Improve Operational Efficiency Coordinate Vendors & Customers in the Process Chain

BPR Challenges

Common Problems with BPR Process Simplification is Common True BPR is Not Desire to Change Not Strong Enough Start Point the Existing Process Not a Blank Slate Commitment to Existing Processes Too Strong REMEMBER - “If it isn’t broke ”

Common Problems with BPR Process under review too big or too small Reliance on existing process too strong The Costs of the Change Seem Too Large BPR Isolated Activity not Aligned to the Business Objectives Allocation of Resources Poor Timing and Planning Keeping the Team and Organization on Target

How to Avoid BPR Failure To avoid failure of the BPR process it is recommended that: BPR must be accompanied by strategic planning, which addresses leveraging Information technology as a competitive tool. Place the customer at the centre of the reengineering effort, concentrate on reengineering fragmented processes that lead to delays or other negative impacts on customer service. BPR must be "owned" throughout the organization, not driven by a group of outside consultants. Case teams must be comprised of both managers as well as those who will actually do the work.

How to Avoid BPR Failure The Information technology group should be an integral part of the reengineering team from the start. BPR must be sponsored by top executives, who are not about to leave or retire. BPR projects must have a timetable, ideally between three to six months, so that the organization is not in a state of "limbo". BPR must not ignore corporate culture and must emphasize constant communication and feedback.

Summary Reengineering is a fundamental rethinking and redesign of business processes to achieve dramatic improvements BPR has emerged from key management traditions such as scientific management and systems thinking Rules and symbols play an integral part of all BPR initiatives

Summary Don’t assume anything - remember BPR is fundamental rethinking of business processes