Business process-reengineering

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

2. Presentation OutlinePresentation Outline
 General IntroductionGeneral Introduction
 Business Process ReengineeringBusiness Process Reengineering
BPR SymbolsBPR Symbols
 Understand and be able to implement a BPR StrategyUnderstand and be able to implement a BPR Strategy
 Understand the main challenges in implementing a BPRUnderstand the main challenges in implementing a BPR
StrategyStrategy
 Conclusion: SummaryConclusion: Summary

3. Spectrum of ChangeSpectrum of Change
 AutomationAutomation
 RationalizationRationalization
of proceduresof procedures
 ReengineeringReengineering
 Paradigm shiftParadigm shift

4. AutomationAutomation
 refers to computerizingrefers to computerizing
processes to speed upprocesses to speed up
the existing tasks.the existing tasks.
 improves efficiency andimproves efficiency and
effectiveness.effectiveness.

5. Rationalization of ProceduresRationalization of Procedures
 refers to streamlining ofrefers to streamlining of
standard operatingstandard operating
procedures, eliminatingprocedures, eliminating
obvious bottlenecks, soobvious bottlenecks, so
that automation makesthat automation makes
operating proceduresoperating procedures
more efficient.more efficient.
 improves efficiency andimproves efficiency and
effectiveness.effectiveness.

6. Business Process ReengineeringBusiness Process Reengineering
 refers to radical redesign ofrefers to radical redesign of
business processes.business processes.
 Aims atAims at
 eliminating repetitive,eliminating repetitive,
paper-intensive,paper-intensive,
bureaucratic tasksbureaucratic tasks
 reducing costsreducing costs
significantlysignificantly
 improvingimproving
product/service quality.product/service quality.

7. Paradigm ShiftParadigm Shift
 refers to a more radicalrefers to a more radical
form of change whereform of change where
the nature of businessthe nature of business
and the nature of theand the nature of the
organization isorganization is
questioned.questioned.
 improves strategicimproves strategic
standing of thestanding of the
organization.organization.

8. 3
Business Process ReengineeringBusiness Process Reengineering
 ““Reengineering is theReengineering is the fundamentalfundamental
rethinking andrethinking and radicalradical redesign ofredesign of
businessbusiness processesprocesses to achieveto achieve dramaticdramatic
improvements in critical, contemporaryimprovements in critical, contemporary
measures of performance such as cost,measures of performance such as cost,
quality, service, and speed.”quality, service, and speed.”

9. 4
Key WordsKey Words
 FundamentalFundamental
 WhyWhy do we do what we do?do we do what we do?
 IgnoreIgnore what iswhat is and concentrate onand concentrate on whatwhat
should be.should be.
 RadicalRadical
 BusinessBusiness reinventionreinvention vs. businessvs. business
improvementimprovement

10. 5
Key WordsKey Words
 DramaticDramatic
 Reengineering should be brought in “when a needReengineering should be brought in “when a need
exits for heavy blasting.”exits for heavy blasting.”
 Companies in deep trouble.Companies in deep trouble.
 Companies that see trouble coming.Companies that see trouble coming.
 Companies that are in peak condition.Companies that are in peak condition.
 Business ProcessBusiness Process
 a collection of activities that takes one or more kindsa collection of activities that takes one or more kinds
of inputs and creates an output that is of value to aof inputs and creates an output that is of value to a
customer.customer.

11. BPR & TheBPR & The
OrganizationOrganization

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

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

14. 16
Reengineering & ContinuousReengineering & Continuous
Improvement--Improvement--SimilaritiesSimilarities
Reengineering Continuous Improvement
Similarities
Basis of analysis Process Process
Performance measurement Rigorous Rigorous
Organizational change Significant Significant
Behavioral change Significant Significant
Time investment Substantial Substantial

15. 17
Reengineering & ContinuousReengineering & Continuous
Improvement--Improvement--DifferencesDifferences
Reengineering Continuous Improvement
Differences
Level of change Radical Incremental
Starting point Clean slate Existing process
Participation Top-down Bottom-up
Typical scope Broad, cross-functional Narrow, within functions
Risk High Moderate
Primary enabler Information technology Statistical control
Type of change Cultural and structural Cultural

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

17. What is a Business Process?What is a Business Process?
 A group of logically related tasks that use theA group of logically related tasks that use the
firm's resources to provide customer-orientedfirm's resources to provide customer-oriented
results in support of the organization'sresults in support of the organization's
objectivesobjectives

18. Why Reengineer?Why Reengineer?
 CustomersCustomers
 DemandingDemanding
 SophisticationSophistication
 Changing NeedsChanging Needs
 CompetitionCompetition
 LocalLocal
 GlobalGlobal

19. 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

20. Why Reengineer?Why Reengineer?
 CompetitionCompetition
 LocalLocal
 GlobalGlobal
 ChangeChange
 TechnologyTechnology
 Customer PreferencesCustomer Preferences

21. 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

22. Why Organizations Don’tWhy Organizations Don’t
Reengineer?Reengineer?
 ComplacencyComplacency
 Political ResistancePolitical Resistance
 New DevelopmentsNew Developments
 Fear of Unknown and FailureFear of Unknown and Failure

23. PerformancePerformance
 BPR seeks improvements ofBPR seeks improvements of
 CostCost
 QualityQuality
 ServiceService
 SpeedSpeed

24. BPR SymbolsBPR Symbols

25. Business Process FlowchartBusiness Process Flowchart
SymbolsSymbols
An Activity
A Document
A Decision
Data (input as outputs)

26. Business Process FlowchartBusiness Process Flowchart
SymbolsSymbols
A Predefined Process
The Start of a Process
The End of a Process
Representing a Relation
Start
End

27. Business Process FlowchartBusiness Process Flowchart
SymbolsSymbols
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

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

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

30. Rules For DataRules For Data
SymbolsSymbols

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

32. Rules For Data SymbolsRules For Data Symbols
Purchase
Order
Posting
of Bonus
I
A
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

33. Rules For Data SymbolsRules 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.

34. Version ManagementVersion Management
 For different versions of a business process orFor different versions of a business process or
data flow some mandatory information must bedata flow some mandatory information must be
on the flowchart.on the flowchart.
 Name of the business processName of the business process
 Unique number of the business processUnique number of the business process
 Revision numberRevision number
 Date of last changeDate of last change
 AuthorAuthor
 Page number with total pagesPage number with total pages

35. Implementing a BPRImplementing a BPR
StrategyStrategy

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

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

38. 1.1. Select the Process & AppointSelect the Process & Appoint
Process TeamProcess Team
 Two Crucial TasksTwo Crucial Tasks
 Select The Process to be ReengineeredSelect The Process to be Reengineered
 Appoint the Process Team to Lead theAppoint the Process Team to Lead the
Reengineering InitiativeReengineering Initiative

39. Select the ProcessSelect the Process
 Review Business Strategy and CustomerReview Business Strategy and Customer
RequirementsRequirements
 Select Core ProcessesSelect Core Processes
 Understand Customer NeedsUnderstand Customer Needs
 Don’t Assume AnythingDon’t Assume Anything

40. Select the ProcessSelect the Process
 Select Correct Path for ChangeSelect Correct Path for Change
 Remember Assumptions can Hide FailuresRemember Assumptions can Hide Failures
 Competition and Choice to Go ElsewhereCompetition and Choice to Go Elsewhere
 Ask - Questionnaires, Meetings, Focus GroupsAsk - Questionnaires, Meetings, Focus Groups

41. Appoint the Process TeamAppoint the Process Team
 Appoint BPR ChampionAppoint BPR Champion
 Identify Process OwnersIdentify Process Owners
 Establish Executive Improvement TeamEstablish Executive Improvement Team
 Provide Training to Executive TeamProvide Training to Executive Team

42. Core Skills RequiredCore Skills Required
 Capacity to view the organization as a wholeCapacity to view the organization as a whole
 Ability to focus on end-customersAbility to focus on end-customers
 Ability to challenge fundamental assumptionsAbility to challenge fundamental assumptions
 Courage to deliver and venture into unknownCourage to deliver and venture into unknown
areasareas

43. Core Skills RequiredCore Skills Required
 Ability to assume individual and collectiveAbility to assume individual and collective
responsibilityresponsibility

44. Use of ConsultantsUse of Consultants
 Used to generate internal capacityUsed to generate internal capacity
 Appropriate when a implementation is neededAppropriate when a implementation is needed
quicklyquickly
 Ensure that adequate consultation is soughtEnsure that adequate consultation is sought
from staff so that the initiative is organization-from staff so that the initiative is organization-
led andled and notnot consultant-drivenconsultant-driven
 Control shouldControl should nevernever be handed over to thebe handed over to the
consultantconsultant

45. 2.2. Understand the Current ProcessUnderstand the Current Process
 Develop a Process OverviewDevelop a Process Overview
 Clearly define the processClearly define the process
 MissionMission
 ScopeScope
 BoundariesBoundaries
 Set business and customer measurementsSet business and customer measurements
 Understand customers expectations fromUnderstand customers expectations from
the process (staff including process team)the process (staff including process team)

46. 2.2. Understand the Current ProcessUnderstand the Current Process
 Clearly Identify ImprovementClearly Identify Improvement
OpportunitiesOpportunities
 QualityQuality
 ReworkRework
 Document the ProcessDocument the Process
 CostCost
 TimeTime
 Value DataValue Data

47. 3.3. Understand the Current ProcessUnderstand the Current Process
 Carefully resolve any inconsistenciesCarefully resolve any inconsistencies
 Existing -- New ProcessExisting -- New Process
 Ideal -- Realistic ProcessIdeal -- Realistic Process

48. 3.3. Develop & Communicate VisionDevelop & Communicate Vision
of Improved Processof Improved Process
 Communicate with all employees so that theyCommunicate with all employees so that they
are aware of the vision of the futureare aware of the vision of the future
 Always provide information on the progress ofAlways provide information on the progress of
the BPR initiative - good and bad.the BPR initiative - good and bad.
 Demonstrate assurance that the BPR initiative isDemonstrate assurance that the BPR initiative is
both necessary and properly managedboth necessary and properly managed

49. 3.3. Develop & Communicate VisionDevelop & Communicate Vision
of Improved Processof Improved Process
 Promote individual development by indicatingPromote individual development by indicating
options that are availableoptions that are available
 Indicate actions required and those responsibleIndicate actions required and those responsible
 Tackle any actions that need resolutionTackle any actions that need resolution
 Direct communication to reinforce new patternsDirect communication to reinforce new patterns
of desired behaviorof desired behavior

50. 4.4. Identify Action PlanIdentify Action Plan
 Develop an Improvement PlanDevelop an Improvement Plan
 Appoint Process OwnersAppoint Process Owners
 Simplify the Process to Reduce Process TimeSimplify the Process to Reduce Process Time
 Remove any Bureaucracy that may hinderRemove any Bureaucracy that may hinder
implementationimplementation

51. 4.4. Identify Action PlanIdentify Action Plan
 Remove no-value-added activitiesRemove no-value-added activities
 Standardize Process and Automate WhereStandardize Process and Automate Where
PossiblePossible
 Up-grade EquipmentUp-grade Equipment
 Plan/schedule the changesPlan/schedule the changes

52. 4.4. Identify Action PlanIdentify Action Plan
 Construct in-house metrics and targetsConstruct in-house metrics and targets
 Introduce and firmly establish a feedback systemIntroduce and firmly establish a feedback system
 Audit, Audit, AuditAudit, Audit, Audit

53. 5.5. Execute PlanExecute Plan
 Qualify/certify the processQualify/certify the process
 Perform periodic qualification reviewsPerform periodic qualification reviews
 Define and eliminate process problemsDefine and eliminate process problems
 Evaluate the change impact on the business andEvaluate the change impact on the business and
on customerson customers
 Benchmark the processBenchmark the process
 Provide advanced team trainingProvide advanced team training

54. InformationInformation
Technology & BPRTechnology & BPR

55. Benefits From ITBenefits From IT
 Assists the Implementation of BusinessAssists the Implementation of Business
ProcessesProcesses
 Enables Product & Service InnovationsEnables Product & Service Innovations
 Improve Operational EfficiencyImprove Operational Efficiency
 Coordinate Vendors & Customers in the ProcessCoordinate Vendors & Customers in the Process
ChainChain

56. BPR ChallengesBPR Challenges

57. Common Problems with BPRCommon Problems with BPR
 Process Simplification is Common - True BPR isProcess Simplification is Common - True BPR is
NotNot
 Desire to Change Not Strong EnoughDesire to Change Not Strong Enough
 Start Point the Existing Process Not a BlankStart Point the Existing Process Not a Blank
SlateSlate
 Commitment to Existing Processes Too StrongCommitment to Existing Processes Too Strong
 REMEMBER - “If it isn’t broke …”REMEMBER - “If it isn’t broke …”

58. Common Problems with BPRCommon Problems with BPR
 Process under review too big or too smallProcess under review too big or too small
 Reliance on existing process too strongReliance on existing process too strong
 The Costs of the Change Seem Too LargeThe Costs of the Change Seem Too Large
 BPR Isolated Activity not Aligned to theBPR Isolated Activity not Aligned to the
Business ObjectivesBusiness Objectives
 Allocation of ResourcesAllocation of Resources
 Poor Timing and PlanningPoor Timing and Planning
 Keeping the Team and Organization on TargetKeeping the Team and Organization on Target

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

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

61. SummarySummary
 Reengineering is a fundamental rethinking andReengineering is a fundamental rethinking and
redesign of business processes to achieveredesign of business processes to achieve
dramatic improvementsdramatic improvements
 BPR has emerged from key managementBPR has emerged from key management
traditions such as scientific management andtraditions such as scientific management and
systems thinkingsystems thinking
 Rules and symbols play an integral part of allRules and symbols play an integral part of all
BPR initiativesBPR initiatives

62. SummarySummary
 Don’t assume anything - remember BPR isDon’t assume anything - remember BPR is
fundamental rethinking of business processesfundamental rethinking of business processes