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

2. Presentation Outline General Introduction General Introduction Business Process Reengineering Business Process Reengineering BPR Symbols BPR Symbols Understand and be able to implement a BPR Strategy Understand and be able to implement a BPR Strategy Understand the main challenges in implementing a BPR Strategy Understand the main challenges in implementing a BPR Strategy Conclusion: Summary Conclusion: Summary

3. Spectrum of Change Automation Automation Rationalization of procedures Rationalization of procedures Reengineering Reengineering Paradigm shift Paradigm shift

4. Automation refers to computerizing processes to speed up the existing tasks. refers to computerizing processes to speed up the existing tasks. improves efficiency and effectiveness. improves efficiency and effectiveness.

5. Rationalization of Procedures refers to streamlining of standard operating procedures, eliminating obvious bottlenecks, so that automation makes operating procedures more efficient. refers to streamlining of standard operating procedures, eliminating obvious bottlenecks, so that automation makes operating procedures more efficient. improves efficiency and effectiveness. improves efficiency and effectiveness.

6. Business Process Reengineering refers to radical redesign of business processes. refers to radical redesign of business processes. Aims at Aims at eliminating repetitive, paper-intensive, bureaucratic tasks eliminating repetitive, paper-intensive, bureaucratic tasks reducing costs significantly reducing costs significantly improving product/service quality. improving product/service quality.

7. Paradigm Shift refers to a more radical form of change where the nature of business and the nature of the organization is questioned. refers to a more radical form of change where the nature of business and the nature of the organization is questioned. improves strategic standing of the organization. improves strategic standing of the organization.

8. 3 Business Process Reengineering “Reengineering is 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.” “Reengineering is 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.”

9. 4 Key Words Fundamental Fundamental Why do we do what we do? Why do we do what we do? Ignore what is and concentrate on what should be. Ignore what is and concentrate on what should be. Radical Radical Business reinvention vs. business improvement Business reinvention vs. business improvement

10. 5 Key Words Dramatic Dramatic Reengineering should be brought in “when a need exits for heavy blasting.” Reengineering should be brought in “when a need 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 Process Business Process a collection of activities that takes one or more kinds of inputs and creates an output that is of value to a customer. a collection of activities that takes one or more kinds of inputs and creates an output that is of value to a customer.

11. BPR & The Organization

12. BPR is Not? BPR may sometimes be mistaken for the following five tools: BPR may sometimes be mistaken for the following five tools: 1. Automation is an automatic, as opposed to human, operation or control of a process, equipment or a system; or the techniques and equipment used to achieve this. Automation is most often applied to computer (or at least electronic) control of a manufacturing process. 1. Automation is an automatic, as opposed to human, operation or control of a process, equipment or a system; or the techniques and equipment used to achieve this. Automation is most often applied to computer (or at least electronic) control of a manufacturing process. 2. Downsizing is the reduction of expenditures in order to become financial stable. Those expenditures could include but are not limited to: the total number of employees at a company, retirements, or spin-off companies. 2. Downsizing is the reduction of expenditures in order to become financial stable. Those expenditures could include but are not limited to: the total number of employees at a company, retirements, or spin-off companies.

13. BPR is Not? 3. Outsourcing involves paying another company to provide the services a company might otherwise have employed its own staff to perform. Outsourcing is readily seen in the software development sector. 3. Outsourcing involves paying another company to provide the services a company might otherwise have employed its own staff to perform. Outsourcing is readily seen in the software development sector. 4. Continuous improvement emphasizes small and measurable refinements to an organization's current processes and systems. Continuous improvements’ origins were derived from total quality management (TQM) and Six Sigma. 4. Continuous improvement emphasizes small and measurable refinements to an organization's current processes and systems. Continuous improvements’ origins were derived from total quality management (TQM) and Six Sigma.

14. 16 Reengineering & Continuous Improvement--Similarities ReengineeringContinuous Improvement Similarities Basis of analysisProcess Performance measurementRigorous Organizational changeSignificant Behavioral changeSignificant Time investmentSubstantial

15. 17 Reengineering & Continuous Improvement--Differences ReengineeringContinuous Improvement Differences Level of changeRadicalIncremental Starting pointClean slateExisting process ParticipationTop-downBottom-up Typical scopeBroad, cross-functionalNarrow, within functions RiskHighModerate Primary enablerInformation technologyStatistical control Type of changeCultural and structuralCultural

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

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

18. Why Reengineer? Customers Customers Demanding Demanding Sophistication Sophistication Changing Needs Changing Needs Competition Competition Local Local Global Global

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? Competition Competition Local Local Global Global Change Change Technology Technology Customer Preferences Customer 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’t Reengineer? Complacency Complacency Political Resistance Political Resistance New Developments New Developments Fear of Unknown and Failure Fear of Unknown and Failure

23. Performance BPR seeks improvements of BPR seeks improvements of Cost Cost Quality Quality Service Service Speed Speed

24. BPR Symbols

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

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

27. Business Process Flowchart Symbols 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 Symbols An Activity A Document A Decision Flat Data File (input as outputs)

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

30. Rules For Data Symbols

31. 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 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 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 Management For different versions of a business process or data flow some mandatory information must be on the flowchart. For different versions of a business process or data flow some mandatory information must be on the flowchart. Name of the business process Name of the business process Unique number of the business process Unique number of the business process Revision number Revision number Date of last change Date of last change Author Author Page number with total pages Page number with total pages

35. Implementing a BPR Strategy

36. The C’s related to Organization 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 Steps Select The Process & Appoint Process Team Understand The Current Process Develop & Communicate Vision Of Improved Process Identify Action Plan Execute Plan

38. 1.Select the Process & Appoint Process Team Two Crucial Tasks Two Crucial Tasks Select The Process to be Reengineered Select The Process to be Reengineered Appoint the Process Team to Lead the Reengineering Initiative Appoint the Process Team to Lead the Reengineering Initiative

39. Select the Process Review Business Strategy and Customer Requirements Review Business Strategy and Customer Requirements Select Core Processes Select Core Processes Understand Customer Needs Understand Customer Needs Don’t Assume Anything Don’t Assume Anything

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

41. Appoint the Process Team Appoint BPR Champion Appoint BPR Champion Identify Process Owners Identify Process Owners Establish Executive Improvement Team Establish Executive Improvement Team Provide Training to Executive Team Provide Training to Executive Team

42. Core Skills Required Capacity to view the organization as a whole Capacity to view the organization as a whole Ability to focus on end-customers Ability to focus on end-customers Ability to challenge fundamental assumptions Ability to challenge fundamental assumptions Courage to deliver and venture into unknown areas Courage to deliver and venture into unknown areas

43. Core Skills Required Ability to assume individual and collective responsibility Ability to assume individual and collective responsibility

44. Use of Consultants Used to generate internal capacity Used to generate internal capacity Appropriate when a implementation is needed quickly Appropriate when a implementation is needed quickly Ensure that adequate consultation is sought from staff so that the initiative is organization- led and not consultant-driven Ensure that adequate consultation is sought from staff so that the initiative is organization- led and not consultant-driven Control should never be handed over to the consultant Control should never be handed over to the consultant

45. 2.Understand the Current Process Develop a Process Overview Develop a Process Overview Clearly define the process Clearly define the process Mission Mission Scope Scope Boundaries Boundaries Set business and customer measurements Set business and customer measurements Understand customers expectations from the process (staff including process team) Understand customers expectations from the process (staff including process team)

46. 2.Understand the Current Process Clearly Identify Improvement Opportunities Clearly Identify Improvement Opportunities Quality Quality Rework Rework Document the Process Document the Process Cost Cost Time Time Value Data Value Data

47. 3.Understand the Current Process Carefully resolve any inconsistencies Carefully resolve any inconsistencies Existing -- New Process Existing -- New Process Ideal -- Realistic Process Ideal -- Realistic Process

48. 3.Develop & Communicate Vision of Improved Process Communicate with all employees so that they are aware of the vision of the future 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. 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 Demonstrate assurance that the BPR initiative is both necessary and properly managed

49. 3.Develop & Communicate Vision of Improved Process Promote individual development by indicating options that are available Promote individual development by indicating options that are available Indicate actions required and those responsible Indicate actions required and those responsible Tackle any actions that need resolution Tackle any actions that need resolution Direct communication to reinforce new patterns of desired behavior Direct communication to reinforce new patterns of desired behavior

50. 4.Identify Action Plan Develop an Improvement Plan Develop an Improvement Plan Appoint Process Owners Appoint Process Owners Simplify the Process to Reduce Process Time Simplify the Process to Reduce Process Time Remove any Bureaucracy that may hinder implementation Remove any Bureaucracy that may hinder implementation

51. 4.Identify Action Plan Remove no-value-added activities Remove no-value-added activities Standardize Process and Automate Where Possible Standardize Process and Automate Where Possible Up-grade Equipment Up-grade Equipment Plan/schedule the changes Plan/schedule the changes

52. 4.Identify Action Plan Construct in-house metrics and targets Construct in-house metrics and targets Introduce and firmly establish a feedback system Introduce and firmly establish a feedback system Audit, Audit, Audit Audit, Audit, Audit

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

54. Information Technology & BPR

55. Benefits From IT Assists the Implementation of Business Processes Assists the Implementation of Business Processes Enables Product & Service Innovations Enables Product & Service Innovations Improve Operational Efficiency Improve Operational Efficiency Coordinate Vendors & Customers in the Process Chain Coordinate Vendors & Customers in the Process Chain

56. BPR Challenges

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

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

59. How 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, which addresses leveraging Information technology as a competitive tool. BPR must be accompanied by strategic planning, which addresses leveraging Information technology as a competitive tool. Place the customer at the centre of the reengineering effort, concentrate on reengineering fragmented processes that lead to delays or other negative impacts on customer service. Place the customer at the centre of the reengineering effort, concentrate on reengineering fragmented processes that lead to delays or other negative impacts on customer service. BPR must be "owned" throughout the organization, not driven by a group of outside consultants. BPR must be "owned" throughout the organization, not driven by a group of outside consultants. Case teams must be comprised of both managers as well as those who will actually do the work. Case teams must be comprised of both managers as well as those who will actually do the work.

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

61. Summary Reengineering is a fundamental rethinking and redesign of business processes to achieve dramatic improvements Reengineering is a fundamental rethinking and redesign of business processes to achieve dramatic improvements BPR has emerged from key management traditions such as scientific management and systems thinking BPR has emerged from key management traditions such as scientific management and systems thinking Rules and symbols play an integral part of all BPR initiatives Rules and symbols play an integral part of all BPR initiatives

62. Summary Don’t assume anything - remember BPR is fundamental rethinking of business processes Don’t assume anything - remember BPR is fundamental rethinking of business processes