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7/31/2019 07. Business Process Reengineering
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Business ProcessReengineering
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7/31/2019 07. Business Process Reengineering
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David OSullivan, NUI Galway
What is Business Process Reengineering ?
The fundamental ... redesign ofbusiness processes to achieve dramaticimprovements in performance
e.g. costs, quality, speed, efficiency
RedesignProc ess
RedesignProc ess
Business Strateg ies,BPR Goals
Mod elling and Analy sis Tools
New Resource sState o f the ArtInformation
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David OSullivan, NUI Galway
Reengineer and Operate a Business Process
Proc essCustomer
Order
Proc ess
CustomerOrder
CustomerOrders
GoodsMaterials
MaterialOrders
RedesignProcess
RedesignProc ess
Business Strateg ies,BPR Goals
Mod elling and Analy sis Tools
New Resource s
State o f the ArtInformation
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David OSullivan, NUI Galway
Incremental vs. Radical Change
Many commentators agree that BPR means radical change
Reengineering strives to break away from old rules of continuousimprovement
A single step or radical change is required
Objectives of 5% and 10% must give way to 50% and 100%
Some argue that some companies need more time to changei.e. incremental change
..this is one extreme of a wide spectrum of opinion regarding themost appropriate BPR strategies for a firm to adopt
In reality most companies want to manage change effectivelyso BPR methods and tools should allow for both incrementaland radical change
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David OSullivan, NUI Galway
BPR and Information Technology
Reengineering is often lead by changes to theInformation Technology infrastructure e.g. PC Computer Networks, Software,
Telecommunications
Information Technology should be viewed as anautomating or mechanising force e.g. Simplify processes first, then integrate, then
automate
Rather than maximising the performance of individualsor individual business processes, BPR seeks to maximiseinterdependent activities e.g. Computers and networks provide integration and co-
ordination capabilities between people and processes
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David OSullivan, NUI Galway
Examples
IBM used BPR and information technology to reducelead times for requests on one particular process fromseven days to four hours. In addition the number ofrequests increased a hundred fold with no increase inheadcount.
Ford reduced the number of people involved in vendorpayment from 500 to 125 by carrying of businessprocess re-engineering and employing new informationtechnology software and hardware systems
Kodak reduced product development times by one halfafter using BPR on their product development process
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Elements of BPR
Methodology Steps, guidelines, roadmaps
Modelling and Analysis Tools Activity Modelling
Organisation Modelling
Object Modelling
etc.
State of the Art Information Information Technology
Operational Paradigms
Social Organisations Experience
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David OSullivan, NUI Galway
Business Environment
Environment Exploding in Scope
Demands on Modern Business
Problems with InformationTechnology
Radical versus Incremental Change
IT as an Enabler for BPR
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Problems with I.T.
Almost 40% ($97b) of US capital went into IT in 1987 -but in most cases work has simply been hastened ratherthan transformed
Up to 75% of all IT projects fail to meet project goals
Companies tend to use IT as a mechanism of changebecause they do not understand processes
Huge investments in IT over the last decade have notmade Western businesses better
Emphasis on software development, computer networkdevelopment has resulted in a lack of systemsperspective from managers and designers
The pace of development within IT has lead to moving
goal posts and managers who are frightened to takedecisions
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David OSullivan, NUI Galway
Incremental vs. Radical Change
Many commentators agree that BPR means radicalchange
Reengineering strives to break away from old rules ofcontinuous improvement
A single step or radical change is required
Objectives of 5% and 10% must give way to 50% and100%
Some argue that some companies need more time tochange i.e. incremental change
..this is one extreme of a wide spectrum of opinionregarding the most appropriate BPR strategies for a firm toadopt
In reality most companies want to manage changeeffectively so BPR methods and tools should allow forboth incremental and radical change
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David OSullivan, NUI Galway
IT as an Enabler for BPR
IT is seen as an essential enabler IT should be viewed as a force to fundamentally reshape
the way we do business
BPR and IT are natural partners, yet their relationship hasbarely been exploited at all. Companies that have used ITto reengineer boundary crossing, customer drivenprocesses have benefited enormously
Some companies need less IT and better processes BPR is a multidisciplinary approach to implementing
fundamental change in the way work is performed acrossthe organisation with the goal of improving performanceand shareholder value
no mention of IT !
Clearly BPR can involve changes to processes, IT
infrastructure, and organisations either on their own ortogether.
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David OSullivan, NUI Galway
Process Framework
DesignDesign
Production/Service
Production/Serv ic e
OperationsPlanning
OperationsPlanning
SuppliersSuppliers CustomersCustomers
Designs
Capabilities Requirements
Product Mix
RawMaterials
Goods
Designs/
Capabilities
Orders
Capabilities
Plans/
PerformanceSche dules
Queries
Co-eng ineering Process Supp ly Chain Proce ss Design Co-ordination Process Order Fulfilment Proce ss
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David OSullivan, NUI Galway
Methodologies
A methodology is a systematic or clearlydefined way of accomplishing an end
Individual experts tend to use a clean sheetapproach to accomplishing an end
Groups or complex systems developmentoften require a methodology
As a rule each design group should agree amethodology before a project is initiated
Many methods exist from published references- others are available from consulting firms
Ideally a design group develop their own afterunderstanding the key stages and parameters
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David OSullivan, NUI Galway
Context for BPR
PreBPR
Pre
BPR
BPRBPR
PostBPR
PostBPR
Business StrategiesPerformance Framew orkManagem ent CultureOperations Philosophy
Detailed SpecificationsSoftware Engineering
Project EngineeringFac ilities Impleme ntation
Develop Goals andObjectives
Find Cha nge Leversand Define Projects
Cost and ImplementProjects
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David OSullivan, NUI Galway
Davenports Methodology
Step 1 Identify processes for innovation: Select top10-20 key
processes, identify key processes for analysis.
Step 2 Identify change levers: IT, Structural, Cultural and Human
Resource type levers.
Step 3 Develop Process Visions:Develop process objectives and
key operational parameters
Step 4 Understand Existing Processes:Model existing processes in
terms of performance, organisation, information, and skills
Step 5 Design and Prototype New Processes: Design at threelevels - process level, subprocess level and activity level
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David OSullivan, NUI Galway
Manganellis Methodology
Stage 1 Preparation: Defining business goals and objective; defining
reengineering project parameters; training of BPR team.
Stage 2 Identification: Develop customer-oriented models; identify value
adding processes; maps organisation, processes, information.
Step 3 Vision: Identify breakthrough opportunities; analyse and
structure ideas for change.
Step 4 Technical Solution: Workflow analysis; performance
measurement; strategic automation
Social Solution: Empowerment; skills modelling; team building;employee reward and incentives.
Step 5 Transformation: Launch pilot and implement full BPR plan
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David OSullivan, NUI Galway
iTeams Methodology
Understand Rqmts and Define Goals
Engage Users and Model Processes
Create A c t i ons and Empower Team s
Develop Migration Plan
Implement Actions and Monitor Resul ts
Requirements
Projects
Results
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David OSullivan, NUI Galway
Understand Rqmts and Define Goals
DefineGoals
DefineGoals
Requirements
Results Goals
Statements Tool
Requirements ToolStrategies Tool
Indicators Tool
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David OSullivan, NUI Galway
Engage Users and Model Processes
Engage Usersand Model
Process
Engage Usersand Model
Process
Goals
Problems
Process Data
Benchmarking
Models
Ideas
Problems Tool
Ideas ToolModels Tool
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Create Actions and Empower Teams
Create Actionsand Empower
Teams
Create Actionsand Empower
Teams
Goals
Ideas
Models
QuickWins
Projects
Teams
Projects Tool
Gantt Tool
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David OSullivan, NUI Galway
Develop Migration Plan
DevelopMigration Plan
DevelopMigration Plan
Goals
Project Portfolio
QuickWins
Projects
Teams
Portfolio Management Tool
Project Scoring Tool
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MonitorResults
MonitorResults
BusinessDirectives
ResultsProject Portfolio
Process Results
Implement Actions and Monitor Results
Portfolio Management Tool
Traffic Lights ToolDeployment Tool
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Implementation ofLarge Pro j ects
(child of Implement Actions and Monitor Results)
Bid Specification
System Ramp-up
Vendor Selection
Detailed Specification
System Installation
Goals