Business

Process
Reengineering

Sessions Agenda
1) Introduction to module
2) Assessments
3) Source of information
Text Books
On-line sources
4) Assignment

Text Books:
Business Process Reengineering in Asia: A Practical
Approach (2nd Edition) by Albert Tan
Beyond Re-Engineering: How the Process-centred
Organization is changing our work and our lives by
Michael Hammer

What is a Business Process?

A business process is a collection of activities
which together produce something of value to
a customer
e.g. Customer Order Entry

What is Reengineering
Reengineering is the fundamental rethinking and radical
redesign of business processes to achieve dramatic
improvements in critical, current measures of
performance, such as cost, quality, service, and speed.

BPR Definition and History

Reengineering is the radical redesign of
business processes for dramatic improvement.
Popularized by Michael Hammer, Tom
Davenport, and others: 1988-1995.
Hammer et al. argued that many things were
done in organizations because that was the way
they had always been done, not because they
added value.

What to Reengineer?
BPR changes Processes
not
Functions, Departments,
Geographies or Tasks.

Application of BPR
Retail
Service
Manufacturing
All processes are subject to potential
reengineering!

Manufacturing/Retail
Complete reevaluation of how to bring new
cards to market
Goal: Cycle Time Reduction
Result: Cycle Time Reduced

How the Cycle Time was Reduced

Hallmarks original product cycle time was

approximately 3 years. They wanted to
shorten that to 1 year. After a closer look at
their process, they found most of their cycle
time was ideas spent in peoples in box.
After a cross-functional team was called upon
to implement the reengineering process,
Hallmark brought new cards to market 8
months ahead of schedule.

Service

Manufacturing or Service?
K-minus Program
Focused on Core Competency
Went from a $500 Million regional company
to a $3 Billion national chain

Reengineering at Taco Bell

Taco Bell evaluated their processes and discovered

that there was no reason to be preparing the raw
materials for their food onsite. They centralized
their production of those materials (effectively
insourcing to a central commissary), and turned
themselves into a service company (rather than a
manufacturing company).
The reengineering has led to increased job
satisfaction, customer satisfaction, and profitability

BPR Another Example

Before:
Financing Credit Approval Issuance
checking
Credit
Credit
request
decision
After:
Credit
request

Case manager

Credit
decision

IBM Credit (Source: Sia and Neo, JMIS 1997, p.71)

How to start Process Reengineering

Evaluate your processes

How do we do this process?

Why do we do it this way?

How can we do it better?

How do we do this process?

Guidebooks or Manuals are a useful resource

Call in the experts

Flowchart, flowchart, flowchart

Model, model, model

Why do we do it this way?

Keep those experts onboard!

Every step of the process should have a

purpose

Does it make sense?

How can we do it better?

Ask the experts
Only benchmark if absolutely necessary
Initially disregard viability, cost, etc.
BE OPEN TO SUGGESTIONS!

A cross-functional team becomes crucial in this stage.

A cross-functional team, in business, consists of a
group of people working toward a common goal and
made of people with different functional expertise. It
could include people from finance, marketing,
operations, and human resources departments.
Members may also come from outside an
organization (in particular, from suppliers, key
customers, or consultants).
Benchmarking should be used if your processes are
not competitive, but reengineering also provides
opportunity for competitive advantage.

What it is not?

Reengineering is not downsizing.

Downsizing focuses on the reduction of workforce
to achieve short-term cost savings.
Reengineering, on the other hand, focuses on
rethinking from the ground up, finding more
efficient ways of working including eliminating
work that is unnecessary.

Why Reengineering
The 3Cs
Customer
Competition
Change

Nothing is constant or Predictable

Change is the only Constant

Primary Ingredient of Reengineering is

Leadership

It is an unalterable saying of reengineering that it only

succeeds when driven from the top most levels of an
organization.

In our experience, the quality of an organizations

leadership is an absolute predictor of its reengineering
success. Companies with strong leadership will succeed
because they will do what it takes to ensure

Another Ingredient of Reengineering is The

Reengineering Team

A well-rounded team includes a mix of people and skills.

The team should include:
Some individuals who intimately understand the current
process (experts could be at any level in the
organization)
Some individuals who actively use the process and work
closely with customers (including union involvement
when applicable)
Continue

Some individuals who are completely

objective toward the process and outcome
(consultants may fall into this category)
Customers of the process (when possible) and
suppliers (those people who are involved with
the process at the boundaries

Do you need help?

Consultants

Business people dont all share the same feelings

about consultants:
Some hate them, while others hate them a lot.
Those who attempt a Himalayan climb for the first
time usually hire an experienced Sherpa guide.

The Hardest Part of Reengineering

Reengineering is painfully, heartbreakingly tough

(CEO Aetna Life, Hammer and Stanton)

In our experience with companies struggling to

implement reengineering, the number one source of
their difficulties has been in this area of coping with
the reactions of the people in the organization to the
enormity of the change.

Why Reengineering fails

Poor leadership of the effort
Trying to make reengineering happen from the
bottom up
Ignoring impact on other processes/scope
Failing to account for the overall impact on the
people in the organization

Other Obstacles to BPR

Resistance to Change
Job Losses
Lack of Management Support
Unrealistic Expectation (E.g. ERP Implementation)
Inadequate Team Skills

Exercise/Application

Lets start small . . .

Evaluate the process of cleaning your home

Is it as clean as youd like?

How does it get clean?
Who cleans what?
Why do we/I do it that way?
Do I do it as efficiently as those around me?

Cleaning house (cont)

If I could change anything I wanted about the
way my house got clean, what would it be?
What would it take to implement the change?
How would this impact me/my family?
Do I have the resources to make this possible?
Write out an implementation program/schedule
and begin the reengineering application.

BPR Success Factors

Leadership
Availability of Resources
Organizational Awareness
Methodology and Project Management
Information Technology
New Management Style

One confusion need to be clear that BPR is

not the synonyms to
TECHNOLOGY
but it is highly dependent on
TECHNOLOGY
because

End OF Topic