The document discusses reengineering the organization. It defines reengineering as fundamentally rethinking and radically redesigning business processes to achieve dramatic improvements in performance. The key aspects of reengineering covered include preparing the organization for global competitiveness, defining the process, features like fundamental rethinking and radical redesign, and the role of information technology as an initiator, facilitator, or enabler of reengineering. The expected outcomes include redefining the business domain and processes as well as implementing new information systems.
2. Agenda
Purpose of Reengineering
What is Reengineering
Many faces of Reengineering
Definition of Reengineering
Features of reengineering
Process of Reengineering
Role of IT
Outcome of the Reengineering
Conclusion
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3. Purpose of the Reengineering
Reengineering is tool to prepare the
organization run effectively in the globally
competitive environment
To maintain competitiveness , and value
addition in our services and product for
customer .
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4. What is Reengineering
Hammer and Champy state, “A business process” is a collection of activities that
takes one or more kinds of input and creates an output that is of value to the
customer
Business Process Reengineering represents a radical rethinking of company
procedures and organizational structure aimed at obtaining substantial improvements
in terms of costs, quality, service, drawing on the analysis of the value of the activities
of the company.
Reengineering is significant changes tobasic business processes that yield 50-100%
rates of improvement
“a methodological process that uses information technology to radically
overhoul business process and thereby attain major business goals”
“the reconfiguration of the business using IT as a central lever”
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5. Many Faces of Reengineering
Business process reengineering (BPR)
Business process improvement
Core process redes
Process innovation
Business process transformation
Breakpoint business process redesign
Organisational reengineering
Business process management
Business scope redefinition
Organisational change ecology
Structured analysis and improvement
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6. Definition
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
-Michael Hammer and James Champy
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7. Features of Reengineering
Fundamental rethinking refers What the
organization is doing and Why ?
Appropriate question may not be
How can we do it better?
but
Do we really need to do this at all?
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8. Radical Redisign refers not a modification but a
reinvention
Radical change means asking ‘’What if we could
disregard our existing organization and
procedures and start with blank piece of paper?’’
What would the organization look like?
What business processes would we use to
achieve the desired result ?
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9. Competitive environment demands that the
change will take place , because in many cases
it does result fewer people being needed due to
implement new technology
Misconception arises of Downsizing or
Rightsizing, people can be displaced and hurt in
the process , it leads to effect the team spirit .
Achieving major goals or dramatic performance
improvements
Business process as opposed to departments or
functional areas
IT as a critical enabler Is typically initiated from
the top down
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10. focus on processes
questions the logic of existing designs
New design of work should not be based on the
classical hierarchical arrangement or division of
work but on end to end processes and creation
of new values for the customer eg. Total
customer satisfaction , meeting competition
is usually a one-shot attempt at achieving
improvements
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11. Reengineering Process
Preparation – What the customer actually want
from organization
Developing Strategy – Develop Strategic
Processes, Analysis & Prioritization
Design an Organizational System- Create a
Core team of People
Implementation – realization of technical and
social plans
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12. Role of IT
an initiator, a facilitator, or an
enabler
13. Role of IT - Initiator
Agent of change
New requirements
e.g. Internet
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14. Role of IT - Facilitator
Make work/workload easier
e.g. Flow of Information
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15. Role of IT - Enabler
Most attention
Offers the ability/necessary assistance to
accomplish
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16. Role of IT – E-Commerce
Personalized service
Lower transaction & material costs
e.g. E-tickets
Save cost of print/mailf
Reduced commission payable to travel
agency
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17. Role of IT - Coordination
Shared Databases
Information dissemination
Facilitate distribution
Networking
Assistscollection/dissemination
Rapid implementation of decisions
Telecommunication
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18. IT in Integration
Functional Area Information Technologies
Marketing Multimedia, Internet, database
Distribution Online Inventory and shipment controls,
Internet, Database, Barcodig, satellite
positioning
Accounting Computerized Data collection, shared
Database, Spread Sheets
Design & Engineering CAD
Purchasing Internet, Database, ERP
Production CAM, Database, Scheduling, barcoding,
ERP, EDI
Maintenance Expert Systems, Scheduling
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19. Benefits of IT
Cost reduction
Time elimination
Error minimization
Facilitating Integration
Enhancing decision Making
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20. Positive Preconditions for BPR
Senior Management Commitment
The organization has to believe in the change;
The whole organization must be involved in the change;
Realistic Expectations
Theoretical and practical training is required to create
new professionalism
Sound Management Practices
People Participating
Sufficient Budget
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21. Negative Preconditions for BPR
Unsound Financial Condition
Too Many Projects Under Way
Fear and Lack of Optimism
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22. Outcome of the Reengineering
Business domain Redefinition
Redefinition role and responsibility
Information system Implementation
Processes innovation
Elimination of obsolete processes
Training for achievement motivation
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23. BPR Project Problems
70% of the
BPR projects
fail
Biggest obstacles that reengineering faces are
(i) Lack of sustained management commitment and
leadership
(ii) Unrealistic scope and expectations
(iii) Resistance to Change.
Other problems:
the danger of another inefficient system
discontinues in the leadership
lack of communication
selecting wrong IT vendors
lack of awareness of the lead times associated with IT
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24. Conclusion
BPR must be seen as a strategic, cross-functional
activity that needs to be integrated with other
aspects of management
The key requirement is that managers understand
in detail the current business processes before
starting on a BPR project.
The application of IT can provide major
improvements in the performance of business
systems, and while considered a major part of
the reengineering activity, must be integrated with
the needs of customer in mind.
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In its various manifestations, information technology (IT) processes data, gathers information, stores collected materials, accumulates knowledge, and expedites communication. In prior years, IT had been viewed only as a supporting player within the overall strategy of the firm. But IT is now taking significant roles in business processes - creating new needs, causing new product development, and commanding new procedures. Following full implementation of IT in an organization, these internal changes may also lead to broader shifts in products, markets, and society as a whole. A framework of the roles of IT as an initiator, a facilitator, or an enabler is proposed. Initiator - an initiator acts as an agent of change. A causal relation may be involved and some establishments of needs will be aroused. That is, new requirements are imposed and need to be resolved by the usage of certain existing IT. We can treat it as a "Why" decision. For example, the need for using computer scanning may be caused by the decision of using computer imaging (Chan and Choi, 1997). Hammer and Champy (1993) also stated that "An important technology first creates a problem, and then solves it". This statement shows that new operations may be initiated by the use of the available IT. Thus, IT becomes an initiator as it lets people recognize a powerful solution before seeking the problem it may solve (Hammer and Champy, 1993). Furthermore, new operations may be caused by the decision of using certain current ITs. So, we can say that the availability of IT is an initiator of change. We also observe that Davenport argued for limiting IT's role (in BPR) to an enabler only (Davenport, 1993) and it is indeed true that a change effort should never be driven by technological goals (Manganelli, 1993). But, as discussed in Chan and Choi (1997), for example, imaging technology was used and initiated a total change in the process of ward ordering in a hospital. Thus, we observe that it is possible to have the initiator role for IT. Facilitator - IT may also be a facilitator. In other words, IT may serve as something to make work or a workload easier. Thus, we note that there is a need to design some new product to fulfill those new requirements or to create some new operations to accomplish those new functions. These products may not be new inventions. They may actually be forms of current technology, repackaged for the new need and current environment (Chan and Choi, 1997). This can be viewed as a "What" decision. For example, in order to facilitate the use of computer imaging, an imaging system would have to be developed to include the operations of image preparation, image capturing, image transmitting, and image receiving, and image database management. IT also acts as a facilitator because the design of a new operation may necessitate the creation of a new product. The availability of IT in this case serves as a facilitator. In other words, IT can be viewed as a part of the product itself by virtue of increasing the electronization of products and is frequently used to do things that could not be done before. Enabler - this role of IT has received the most attention. As discussed in Chan and Choi (1997), an enabler is something that offers the ability or the necessary assistance to accomplish something. In order to perform the necessary operations, procedures have to be followed and implemented. From another point of view, some new products will be innovated after a "What" decision. So, in order to utilize these innovations, we may develop some new procedures to maximize gains and to meet the intended objectives (Chan and Choi, 1997). Those procedures can be defined as the answers to the "How" question and are steps to be followed in order to achieve successful operations. When IT is to accomplish process innovation, IT serves as an enabler. IT is designed to accelerate specific process steps and was viewed "as an enabler for working smarter and more productively" (Kanter, 1996). We also have seen that IT acts as "an enabler which provides rapid processing and analytical capabilities, parallel access and information capture" (Alavi and Yoo, 1995). For example, networking enables both collection and dissemination of data. Information technology in business processes Stephen L. Chan . Business Process Management Journal . Bradford: 2000 .Vol.6, Iss. 3; pg. 224
Creating a fit between BPR and IT infrastructure: A proposed framework for effective implementation Majed Al-Mashari , Mohamed Zairi . International Journal of Flexible Manufacturing Systems . Boston: Oct 2000 .Vol.12, Iss. 4; pg. 253
Peter O’neil – Sayfa 577 – BANU Some of the reengineering literature advises starting with a blank sheet of paper and redesigning the process anew. The problems inherent in this approach are: I the danger of designing another inefficient system, I ignoring the embedded system knowledge accumulated over many years, and I not appreciating the scope of the problem (Petrozzo and Stepper, 1994; O’Neill and Sohal, 1998). && Telecom Case 70% of the BPR projects fail. Biggest obstacles that reengineering faces are: (i) Lack of sustained management commitment and leadership; (ii) Unrealistic scope and expectations; and (iii) Resistance to Change. Based on the BPR consultants' interviews, Bashein et al. (1994) outline the positive preconditions for BPR success as: Senior Management Commitment and Sponsorship; Realistic Expectations; Empowered and Collaborative Workers; Strategic Context of Growth and Expansion; Shared Vision; Sound Management Practices; Appropriate People Participating Full-Time (cf: CIGNA: BPR as a way of life); and Sufficient Budget. They also identify negative preconditions related to BPR as: The Wrong Sponsor; A "Do It to Me" Attitude; Cost-Cutting Focus; and, Narrow Technical Focus. The negative preconditions relating to the Organization include: Unsound Financial Condition; Too Many Projects Under Way; Fear and Lack of Optimism; and, Animosity Toward and By IS and HR Specialists. To turn around negative conditions, firms should: Do Something Smaller First (CIGNA's pilot); Conduct Personal Transformation (CIGNA's change of mindset); and Get IS and HR Involved (CIGNA's CIO initiated the change and HR factors were given due emphasis). King (1994) views the primary reason of BPR failure as overemphasis on the tactical aspects and the strategic dimensions being compromised. He notes that most failures of reengineering are attributable to the process being viewed and applied at a tactical, rather than strategic, levels. He discusses that there are important strategic dimensions to BPR, notably, Developing and Prioritizing Objectives; Defining the Process Structure and Assumptions; Identifying Trade-Offs Between Processes; Identifying New Product and Market Opportunities; Coordinating the Reengineering Effort; and, Developing a Human Resources Strategy. He concludes that the ultimate success of BPR depends on the people who do it and on how well they can be motivated to be creative and to apply their detailed knowledge to the redesign of business processes (cf: Davenport & Stoddard 1994, Markus et al. 1994).