Chapter 7 Business Process Redesign Reference: Tan, A. (2007). Business Process Reengineering in Asia: A Practical Approach, Pearson Education, Singapore.

Objectives To understand the phases involved in Detailed Process Design To understand the process, technology and organization structure

Introduction Purpose: To establish a new organization structure and infrastructure for supporting the redesigned process. The stage consists of three key components: Process structure (what, when and how) Technology structure (which) Organization structure (who)

Introduction In developing a detailed process design: A simultaneously redesign of the process and technology structures are needed. An analysis to determine new resources and developmental needs for existing employees (part of implementation planning) Job positions should also meet the baseline requirements, ie: job responsibilities, outcomes, performance etc.

Process Structure The new process must be verified. This is to ensure it meets the performance goals under different setting / operating scenario. For simple processes, a modeling using a spreadsheet could be used. For complex processes, computer modeling and simulation would be preferable.

Process Structure- simulation Process simulation- experimenting with a model of a real system to determine how the system respond to changes. The simulation tool helps managers to study processes from a systems perspective. This include a better understanding of cause and effect

Process Structure - simulation In a reengineering effort, simulation assist managers to: Validate the vision Analyze the critical path Prototype the process Understand performance characteristics Communicate the new process Develop system thinking

Process Structure - simulation Business Process Simulation(BPS) tool: Flow diagramming based BPS tools, example, visio and ProcessModel System Dynamics based BPS tools, example, Vensim and Powersim Discrete-event Based BPS tools, example Arena and ProModel Using the tools, it helps to analyze and simulate the complex and dynamic business processes.

Technology Structure It is a support structure. It allows companies to automate business information processes. IT has contributed to intuitive GUI that enable inexperienced staff to apply technology in their work. IT allows users to manipulate data, images, charts, etc as well as quick access through multitasking and windows.

Technology Structure Examples: Internet/Intranet technologies Wireless computing Real-time applications Object-oriented technology Etc. During this stage, we need to determine the types of technologies that are required to support the new business processes.

Technology Structure Example - Staff Apply for claim HOD Evaluate applicationApprove/Reject Dean Evaluate applicationApprove/Reject Clerk Keep the recordInform staff Collect form Finance submit form to finance Check formApprove/ Reject Collect payment Figure 4.1: Process Chart for applying claims of research fund

Technology Structure The key activities involved: 1. Apply for claims 2. Evaluate the application 3. Approve or reject by HOD 4. Evaluate the application 5. Approve or reject by Dean 6. Keep the record by clerk 7. Inform the staff by clerk 8. Collect the form by staff 9. Submit to finance by staff 10. Check the form by finance 11. Make payment by finance

Technology Structure The activities listed can be classified as value-added or non-value added and potential IT can be identified for each activity. Class activity: Based on the scenario given and the listed key activities, identified the potential IT application to be used.

Key activitiesType of activity (VA/ non VA)Potential IT application (if any) Apply for claims Evaluate the application by HOD Approve or reject by HOD Evaluate the application by Dean Approve or reject by Dean Keep the record by clerk Inform the staff by clerk Collect the form by staff Submit to finance by staff Check the form by finance Make payment by finance Technology Structure Table 4.2: Identification of potential IT for new process

Technology Structure The identification of IT for the new processes must be based on the benefits or values that the technology brings. Not just the benefits to customers but how large its contribution will be on process improvement. Refer to the example given in page 51.

Organization Structure The detailed process design should include: necessary job positions, required skills and knowledge, number of people, teams and the supporting management structure.

Organization Structure The organization should have the following characteristics: Minimize number of interfaces Maximize proximity of internal customers and suppliers Optimize span of control number of direct reports per manager Minimize number of layer Clarify of role and responsibilities Avoid overlapping or fuzzy responsibilities

Organization Structure According to the advocate of BPR, the modern organization should abandon the old control mechanism. 3 reasons to support the claim By having modern IS, ex. Decision support system, expert system etc. By having a well educated workforce The business environment has changed

Organization Structure BPR emphasizes the value of reducing management levels and the number of managers within organizations. The role could have changed to maximize the skills and knowledge. Refer to table 4.3, 4.4 and Fig. 4.2 The BPR team will need to verify assumptions regarding expected operating condition for the new process and staff/task performance metric.

Summary The phases in detailed process design involved: Process structure Develop the detailed process and use the simulation tool for validating process Technology structure Scan the emerging technologies to support the new process. Require justification such as what, why and how? Organization structure Structure a new organization to support the new processes and assign a performance target for each.