The document discusses business process reengineering (BPR) and process innovation. It defines some key concepts: 1) BPR involves fundamental, radical, and dramatic changes to processes with the goal of achieving dramatic improvements like 100-500% better results. 2) A business process is a collection of activities that takes inputs and creates outputs of value to customers. Processes have customers and cross organizational boundaries. 3) Process innovation goes beyond reengineering to envision new work strategies and implement complex technological, human, and organizational changes for order-of-magnitude improvements. 4) Innovation is more radical and risky than incremental improvement, starting from a clean slate rather than existing processes.

1. Teguh I Santoso, MBATeguh I Santoso, MBA
RETHINKING BUSINESS PROCESSRETHINKING BUSINESS PROCESS
Chapter 2Chapter 2

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BPR Four key wordsBPR Four key words
1. Fundamental
means business people have to ask themselves with a fundamental
question, such as why, what and how we do the business.
2. Radical
means, ‘if it did not exist today, how would we create it’ and then
destroying the old system to create the new one
3. Dramatic
means improvement in business result, not of 5%, not of 15% nor 20%,
but in term of quantum leaps of 100%, 300%, 500% better result
4. Process
means a group of distinct tasks that together create a product or service
desired by one or more stakeholders

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ProcessProcess
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
(Davenport, 1993)
Business Process
A collection of activities that takes one or more kinds of inputs and
creates an output that is of value to the customer
Examples of processes include:
- developing a new product;
- ordering goods from a supplier;
- creating a marketing plan;
- processing and paying an insurance claim; etc

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Process CharacteristicsProcess Characteristics
Processes have two important characteristics:
1. They have customers (internal or external)
2. They cross organizational boundaries
One technique for identifying business processes in an
organization is the Value Chain method proposed by
Porter and Millar (1985)

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Flow of ProcessFlow of Process
CEO
OPR ACC.MKT
Customer
Request
Order
Fulfillment

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Process DimensionsProcess Dimensions
Processes may be defined based on three dimensions
1. Entities
Processes take place between organizational entities.
They could be Interorganizational (e.g. EDI),Interfunctional or
Interpersonal.
2. Objects
Processes result in manipulation of objects. These objects could be
Physical or Informational.
3. Activities
Processes could involve two types of activities:
Managerial (e.g. develop a budget) and Operational (e.g. fill a customer
order)
(Davenport & Short 1990)

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InovasiInovasi
“ Peluncuran sesuatu yang baru dengan
tujuan untuk menimbulkan perubahan
besar yang radikal “

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Process InnovationProcess Innovation
Involves stepping back from a process to inquire into its overall
business objective, and then effecting creative and radical change to
realize order-of-magnitude improvements in the way that objective is
accomplished.”
“Re-engineering is only part of what is necessary in the radical change
of processes; it refers specifically to the design of the new process.”
“The term process innovation encompasses the envisioning of new
work strategies, the actual process design activity, and the
implementation of the change in all its complex technological, human,
and organizational dimensions.”

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Improvement vs. InnovationImprovement vs. Innovation
Dimension Improvement Innovation (BPR)
Level of Change Incremental Radical
Starting Point Existing Process Clean Slate
Frequency of Change One-time/Continuous One-Time
Time Required Short Long
Participation Bottom-Up Top-Down
Typical Scope Narrow, within function Broad, cross-functional
Risk Moderate High
Primary Enabler Statistical Control Information Technology
Type of Change Cultural Cultural/Structural
Source: Davenport, 1993

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Kerangka Inovasi ProsesKerangka Inovasi Proses
Mengidentifikasi Proses untuk Inovasi
Mengidentifikasi Pemungkin Perubahan
Mengembangkan Visi Proses
Memahami Proses-proses yang ada
Merancang & Membuat Prototype Proses Baru

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Thank You