Business process Re engineering with good examples

1. Business Process Reengineering
and Information Technology

2. Objectives
 The impact of IT
 The reengineering of work
 IT and Business Process Redesign

3. The role of information technology
 Information technology (IT) has historically played an important role in the
reengineering concept.[10] It is considered by some as a major enabler for new
forms of working and collaborating within an organization and across
organizational borders[
 Early BPR literature [11] identified several so called disruptive technologies that
were supposed to challenge traditional wisdom about how work should be
performed.
 Shared databases, making information available at many places
 Expert systems, allowing generalists to perform specialist tasks
 Telecommunication networks, allowing organizations to be centralized and
decentralized at the same time
 Decision-support tools, allowing decision-making to be a part of everybody's job
 Wireless data communication and portable computers, allowing field personnel to
work office independent
 Interactive videodisk, to get in immediate contact with potential buyers
 Automatic identification and tracking, allowing things to tell where they are,
instead of requiring to be found
 High performance computing, allowing on-the-fly planning and revisioning

4.  Business process reengineering (BPR) is the analysis and
redesign of workflow within and between enterp
 Organize around outcomes, not tasks.
2. Identify all the processes in an organization and prioritize
them in order of redesign urgency.
3. Integrate information processing work into the real work
that produces the information.
4. Treat geographically dispersed resources as though they
were centralized.
5. Link parallel activities in the workflow instead of just
integrating their results.
6. Put the decision point where the work is performed, and
build control into the process.
7. Capture information once and at the source.rises.

5.  Business process re-engineering is a business
management strategy, originally pioneered in the early
1990s, focusing on the analysis and design of workflows and
processes within an organization. BPR aimed to help
organizations fundamentally rethink how they do their work
in order to dramatically improve customer service, cut
operational costs, and become world-class competitors. [1] In
the mid-1990s, as many as 60% of the Fortune 500
companies claimed to either have initiated reengineering
efforts, or to have plans to do so.
 Business process re-engineering is also known as business
process redesign, business transformation, or business
process change management.

6. The Impact of IT
 To improve efficiency
 To improve effectiveness
 To facilitate transformation

7. The Impact of IT
 On individual
Efficiency Task Word processing
mechanization Spreadsheet
Effectiveness Work Using database to
improvement generate sales
letters
Transformation Role expansion Doing what if
analysis for
investment client

8. The Impact of IT
 On individual
Efficiency Task Word processing
mechanization Spreadsheet
Effectiveness Work Using database to
improvement generate sales
letters
Transformation Role expansion Doing what if
analysis for
investment client

9. The Impact of IT
 On functional unit
Efficiency Process Order entry, credit
automation checking
Effectiveness Functional CAD, CAM
enhancement
Transformation Functional CD ROM disks for
redefinition business research

10. The Impact of IT
 On the organization
Efficiency Boundary Linking customers
extension and suppliers
Effectiveness Service Online
enhancement diagnostics
databases
Transformation Product videoconferencing
innovation

11. Reengineering of Work
 Historically, organizations have become
hierarchies of complex functions over time.
 The division of labor
 Command and control structure
 Nature of post-world war II market
 What has changed??
 BPR changes processes not functions , geographies, department or
tasks. It is not reorganizing or downsizing.

12. Reengineering of Work
 Customers have power over suppliers
 Competition has changed
 Technology
REASONS FOR RE-ENGINEERING :-
. HIGH dEmANd , EFFIcIENcy ANd cONtROl.
INNOvAtION , SpEEd , SERvIcE & quAlIty.

13. Reengineering of Work (examples)
Wal-Mart’s inventory management
process
 Wal- Mart lets Proctar & Gamble know how
much stock it moves from its distribution
centers into its stores.
 P&G inturn tells Wal-Mart how much it needs
to order
 P&G can anticipate the demand and schedule
its production
 Wal-Mart offloads its inventory mgmt. to
vendor and receive inventory into its stores
even before it pays P&G

14. Reengineering of Work (examples)
Ford’s accounts payable system
Traditional process Reengineered process
 Multiple deptts.  We pay when we rec. the
goods
receiving
purchasing vendor
ase order
purchasing Purch
Purc
hase s
orde
od
Co rcha
r vendor go
Pu
py s e
c.
do
of
receiving
c.
ice
Re
o
ord
inv
ent
er
m
Accounts payable
pay
Database
Acc. payable

17. Reengineering of Work (examples)
Ford’s accounts payable system
 Technology is an important part of the
new process.
 The shared purchasing/ rec./accounts
payable database integrates the three
functions to accomplish the overall
business process, order procurement,
successfully

18. Reengineering Principles
 Organize around outcomes and not
around tasks
 Assigning a person or a team to
accomplish a task, rather than using
assembly line approach
 Have those who use the output of the
process actually perform the process

19. Reengineering Principles
 Have those who use the output of the
process actually perform the process
 Why does a marketing manager have to be
a customer of the purchasing deptt?

20. Reengineering Principles
 Treat geographically dispersed units as
if they are centralized
 Greatest inefficiencies occur because
decentralized divisions maintain their own
information systems

21. Reengineering Principles
 Link parallel activities during the
process rather than at the end
 Capture information once at the source
 At mutual benefit life, the same information
was entered into as many as five different
databases. When the process was
reengineered, integrated databases were
designed.

22. Roles in Business
Reengineering
Sponsor Sees the big picture
Provides the resources
Steering committee Oversees the reengineering project
Design teams Knowledgeable operating
managers, creative
Champion Middle manager with leadership role
Direct line to sponsor
Implementation team Focuses on implementation
Open to change, motivate others

23. Steps in Business Process
Redesign (case Mutual Benefit Life)
 Develop business vision and process
objectives
 To reduce time and cost of underwriting an
insurance policy in order to provide timely and
competitive service to its customers
 Identify processes to be redesigned
 Underwriting an insurance policy. The current
process involves 40 steps, more than 100
people, 12 functional areas and 80 separate
jobs

24. Steps in Business Process
Redesign (case Mutual Benefit Life)
 Understand and measure existing
processes
 Management established a goal of improving
productivity by 40 percent
 Identify IT levers
 Created a new role, the case manager, to
perform and coordinate all underwriting tasks
centrally. This decision making process was
made possible by work station based computer
system capable of pulling data from all over the

25. Steps in Business Process
Redesign (case Mutual Benefit Life)
 Design and build a prototype of the process
 In the prototyping process the company made
some organizational changes. After a brief start
up period, the firm learned that some
underwriting cases needed two additional roles:
specialists like lawyers and clerical assistance.
With the new roles and redesigned processes, senior
managers believed the firm will reach the 40% productivity
improvement goal

26. Management challenges in
Business Process Redesign
?

27. THANK YOU!!
Reference Book: MIS by Mary Summer and Robert