3. HISTORY: Michael Martin Hammer (April 13, 1948 – September 13, 2008) was one of the founders of the management theory of Business Process Reengineering (BPR).

4. In 1990, Michael Hammer, a former professor of computer science at the Masssachusetts Institute of Technology (MIT), published an article in the Harvard Business Review,  In which he claimed that the major challenge for managers is to obliterate non-value adding work, rather than using technology for automating it.  Michael Hammer’s and John Champy’s wrote a book, "Reengineering the Corporation-A Manifesto for Business Revolution," published by Harper Collins, 1993.

5. WHAT BPR IS: TWO PARALLEL DEFINITIONS “The FUNDAMENTAL rethinking and RADICAL redesign of business PROCESSES to achieve DRAMATIC improvements in critical, contemporary measures of performance, such as cost, quality, service, and speed” It is more than automation. By – Micheal Hammer and Champy.  “BPR is a performance improvement philosophy that aims to achieve quantum improvements by primarily rethinking and redesigning the way that business processes are carried out.” (Omar. A. El Sawy, “Redesigning Enterprise Processes for e-Business”, McGraw-Hill, NY, 2001)

6. BPR DEFINITION Cont’d.., Fundamental Radical Dramatic Processes

7. Example FORD for BPR:

8. Ford Motor Company  500 Head Count,  Accounts Payble to Match 14 items between PO,GRN and Invoice.

9. Ford (cont)

10. Benefits to FORD..,  Automatic matching of 3 items (part no., Unit of measure, supplier code) between P.O. & G.R.N;  Faster, simpler, more accurate & efficient process; 75% reduction in head count.., ie, It reduced the number of people involved in vendor payment from 500 to 125 by BPR and employing new information technology software and hardware systems

11. Technology Human Resource Process Elements Information Technology Operation Technology Project Management Tech. Operation optimize Process standardize Work flow Organization structure Set up role-play Policy and custom Incentives Education/Training ELEMENTS/COMPONENTS OF BPR:

12. BPR and Information Technology: “Reengineering is often lead by changes to the Information Technology infrastructure” – e.g. PC Computer Networks, Software, Telecommunications “Information Technology should be viewed as an automating or mechanizing force” – e.g. Simplify processes first, then integrate, then automate “Rather than maximizing the performance of individuals or individual business processes, BPR seeks to maximize interdependent activities” Example: Computers and networks provide integration and coordination capabilities between people and processes

13. TECHNOLOGY ISSUES:  Careful use of unproved technologies  Quick deployment of cost effective technologies  Resistance to Change from Old technology; Why change when “NOT” Broke  Dealing with legacy systems  Changes in Information Systems Architectures. Example: Implementation ERP by many companies without the much knowledge of it.

14. “Reengineering” is not “Automation” “Reengineering” is neither “Restructuring” nor “Downsizing” “Reengineering” is neither “TQC” nor “TQM” - Automation only offers a tool to work more efficiently - These expressions are just reaction against decrease in demand - Reengineering shared its properties with TQM. However, reengineering reverses “Industry Revolution” - Adam Smith’s paradigm such as divisionalization, economy of scale, and hierarchy control are all removed. - Tradition is not important. Reengineering is manipulating totally new organization. WHAT BPR IS NOT

15. BPR Is NOT TQM:

16. GOALS/OBJECTIVES OF BPR  Increase service level  Reduce total process cycle time  Reduce waiting time  Reduce activity cost  Reduce inventory costs

17. PRINCIPLES OF RE-ENGINEERING RULES:- 1.Organise around outcomes, not tasks. 2. Have those who use the output of the process, perform the process. 3.Merge information processing work that produces information. 4.Treat geographically dispersed resources as though they work centralized. 5.Link parallel activities instead of integrating their results. 6. Put the decision point where the work is performed and build control in the process. 7. Capture information once –at the source.

18. WHY BPR IS NECESSARY The Virtual Organization: Three C’s Driving Change Customers take charge. Mass market v. a “market of one” various tastes of customers Informed consumers Competition intensifies. More and different kinds Technology changes the nature of competition.

19. Competitive Forces Model

20. WHY BPR IS NECESSARY CONT’D.., The Three C’s (continued) Change becomes constant. reduced product cycles reduced time to develop new products more environment scanning “Companies created to thrive on mass production, stability, and growth can’t be fixed to succeed in [such] a world.”

24. Four Revolutions Affecting Business Today New Competitors New Rules of Competition New Technologies New Work Force

25. FEASIBILITY TECHNICAL: Assess hardware, software, technical resources ECONOMIC: Will benefits outweigh costs? OPERATIONAL: Is solution desirable within existing conditions? INFORMATION REQUIREMENTS: Detailed statement of new system needs

26. BENEFITS OF REENGINEERING  By reengineering, an organization can achieve radical changes in performance.  It boost competitiveness in the operation network.  Reengineering encourage organizations to abandon conventional approaches to problem solving and to “think big”.  The slow, caution process of incremental improvements rapidly changing the market place and changes in the pace and quality of their response to customers needs.

27. .  Transformed from a rule driven and job centred organization structure.  Radically new organizational designs.  The corporate culture and the basic principles by which departments operate.  Create more challenging and more rewarding jobs. BENEFITS OF REENGINEERING Cont’d..,

28. LIMITATIONS OF REENGINEERING It is not a panacea. It is not simple or easily done. Significant process improvements cannot be realized without use of information technology. It is not enough if a firm improves its cross-functional processes within each functional areas must be improved. Moderate gains that better fit corporate strategy and culture might give greater cumulative results than the pursuit of break through.

29. CASE STUDY

30. Early 1980s Mommy~ I’m the king! -_-; Early 1990s Your regime is over.. IBM – POWERFUL REENGINEERING:

31. IBM outsourced CPU & OS Terrible decision Instead, Intel and MS became huge elephants. Crisis of IBM (Mid 1980s ~ 1993) No downsizing No CRM Repeated attempt’s A loss of billion dollars per year Someday… I’ll be back. IBM – POWERFUL REENGINEERING:

32. Louis V. Gerstner, Jr. IBM Chairman and CEO (1994~2002) Strong Leadership Tough Reengineering I’m back!!!! Who say elephants can’t dance? IBM – POWERFUL REENGINEERING:

33. IBM as a Global Innovation Leader Downsizing Over 100,000 layoffs Integrating dispersed organizations into one Global IBM BPR using IT Transforming from a hardware-centered company to a services-centered e-business and product development company About half of total sales is owing to offering various kinds of services Largest services company in the US (2002) IBM – POWERFUL REENGINEERING:

34. IBM(changes made across dimensions) From a country orientation to a customer segment and industry based strategy Changed the structure of company’s management levels Assigned the senior executives to lead re-engineering effort Reviewed the Results every Quarterly IBM – POWERFUL REENGINEERING:

35. PRACTICAL APPLICATION OF BPR IN GOAL OF SELLING SOLUTION Created separate service team for each business, specifically to concentrate on growth. Reconfigured and reoriented software,hardware,and technology teams so that they focused on groups of products for office networks. Reoriented everyone’s focus on to the customer regardless of the immediate concern. Emphasized on supporting to IBM research, common business process, shared information system, and applications, and our common management system.

36. BPR IS DONE IN FOLLOWING WAYS New kind of passionate leadership. Using information technology. Employed holistic structured approach. Emphasized more on CRM. Team work. Decision making responsibility is given to line management. Consistent approach to set objectives evaluating ourselves is a key part of reengineered hr process. Reward system. Team based culture. To reduce cycle cost.

37. How We Can Complete BPR Well? An unclear definition of just what BPR is Unrealistic expectations Inadequate resources Taking too long Too great (or to little) reliance on new IT Wrong scope Not to Do 1. Preparation Manganelli and Klein’s division of the BPR process How We Can Complete BPR Well? 2. Identification3. Vision4. Solution5. Transformation

38. BIBLIOGRAPHY:  Text Books:  Re-engineering the Corporation --Micheal Hammer & Champy.  Total Quality Management -- Sridhar Bhat,  Total Quality Management -- B. Janakiraman & R.K. Gopal  Websites:  www.wikipedia.org  www.ford.com  www.ibm.com/in  www.authorstream.com  www.dwp.gov.uk  www.pittsburghpmi.org

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41. ADDITIONAL SLIDES

42. KEY STEPS IN RE-ENGINEERING PROCESS:

43. 1.Select the Process & Appoint Team Two Important Tasks Select the process to be reengineered Appoint a process team

44. Select the Process Review business strategy and customer requirements Select core processes Understand customer needs No assumption

45. Appoint the Process Team Identify process owners Develop executive improvement team Provide training to executive team

46. 2. Understand the Current Process Develop a process overview Clearly define the process Mission Scope Boundaries Set business and customer measurements Understand customers expectations from the process

47. Understand the Current Process Cont’d.., Identify Improvement Opportunities Quality Rework Document the Process Cost Time Value Data

48. 3.Develop & Communicate Vision of Improved Process Communicate with all employees so that they are aware of the vision of the future Always provide information on the progress of the BPR initiative - good and bad. Demonstrate assurance that the BPR initiative is both necessary and properly managed Promote individual development by indicating options that are available Indicate actions required and those responsible

49. 4.Identify Action Plan Develop an improvement plan Appoint process owners Simplify the process to reduce process time Remove no-value-added activities Standardize process and automate where possible Up-grade equipment Plan/schedule the changes

50. 5. Execute Plan Qualify/certify the process Perform periodic qualification reviews Define and eliminate process problems Evaluate the change impact on the business and on customers Benchmark the process Provide advanced team training