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1 Business Process Reengineering Business Process Reengineering Class Session 3 Class Session 3 Fall 1385 Fall 1385 Reengineering the Corporation Hammer/Champy Chapters 5-9 o Process Documentation o Mission-Vision-Case for Action o Benchmarking o Success Cases

Business Process Reengineering Class Session 3 – …gsme.sharif.edu/~processreengineering/BPR_session3.pdf1 Business Process Reengineering Class Session 3 – Fall 1385 Reengineering

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Page 1: Business Process Reengineering Class Session 3 – …gsme.sharif.edu/~processreengineering/BPR_session3.pdf1 Business Process Reengineering Class Session 3 – Fall 1385 Reengineering

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Business Process ReengineeringBusiness Process ReengineeringClass Session 3 Class Session 3 –– Fall 1385Fall 1385

Reengineering the Corporation Hammer/Champy Chapters 5-9

o Process Documentationo Mission-Vision-Case for Actiono Benchmarkingo Success Cases

Page 2: Business Process Reengineering Class Session 3 – …gsme.sharif.edu/~processreengineering/BPR_session3.pdf1 Business Process Reengineering Class Session 3 – Fall 1385 Reengineering

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مثال مثال ‐‐كالن فرايندهاي سازمان كالن فرايندهاي سازمان Product Development

– Product Research– Product Engineering and Design– Process Engineering and Design

Obtaining Customer Commitment– Market Development– Marketing and Sales– Tendering

Order Fulfillment– Procurement & Inbound Logistics– Production Planning and Control– Manufacturing and Assembly– Distribution & Inbound Logistics– Order Processing

Customer Service– After Sales Service– Product Take Back

Support– Financial Management– Human Resource Management– Information Management– Maintenance– Internal Control of Health,

Environment, and Safety

Evolution– Continuous Business Process

Improvement / Reengineering– Product Research– Production Technology Research– Human Resource Development– Supplier Base Development– Development of External Relations– Strategic Planning

Prim

ary

Proc

esse

s

Seco

ndar

y Pr

oces

ses

Page 3: Business Process Reengineering Class Session 3 – …gsme.sharif.edu/~processreengineering/BPR_session3.pdf1 Business Process Reengineering Class Session 3 – Fall 1385 Reengineering

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Business Process MapBusiness Process MapCase of TI SemiconductorCase of TI Semiconductor

StrategyDevelopment

ProductDevelopment

CustomerDesign and

Support

OrderFulfillment

Manufacturing Capability Development

Market CustomerConceptsDevelopment

Manufacturing

Page 4: Business Process Reengineering Class Session 3 – …gsme.sharif.edu/~processreengineering/BPR_session3.pdf1 Business Process Reengineering Class Session 3 – Fall 1385 Reengineering

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مدل پورتر مدل پورتر Level 0 View of Entire Organization

Primary – Direct & Immediate to CustomerSupport – Assures Primary Processes

SupportProcesses

EvolutionProcesses

PrimaryProcesses

SecondaryProcesses

Page 5: Business Process Reengineering Class Session 3 – …gsme.sharif.edu/~processreengineering/BPR_session3.pdf1 Business Process Reengineering Class Session 3 – Fall 1385 Reengineering

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فرآيند فرآيند شناسنامهشناسنامه

نياز سنجي و برنامه ريزي

دانشكده

سياست هاي دولت و دانشگاه

رسالت و چشم انداز دانشكده

پيش بيني تقاضا و نياز منطقه

بودجه مالي و ظرفيت ها

برنامه گزينش ساله ٥

سمت هاي تمام وقت

سمت هاي نيمه وقت

الويت هاي بعدي

اهداف فرآيند ١.

محدوديت ها ٢.

كنترل٣.

شاخص ها ۴.

Page 6: Business Process Reengineering Class Session 3 – …gsme.sharif.edu/~processreengineering/BPR_session3.pdf1 Business Process Reengineering Class Session 3 – Fall 1385 Reengineering

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نمودار فرايندهااز كالن به خرد نمودار فرايندهااز كالن به خرد

استخدام بازنشستگي

استاد

ارزيابي ارتقاء و

نتقالا

توسعههيئتعلمي

ارائه خدمات رفاهي

اطالع رساني و انتخاب

استخدامقراردادي

تغيير وضعيت رسميبه

آزمايشي

و نياز تعيين برنامه ريزي تامين

تغيير وضعيت رسمي به

قطعي

باز نشستگياستاد

پردازش تقاضا

بستنقرارداد

دريافت تقاضا

Level 1 Map

Level 3 Map

Level 2 Map

Page 7: Business Process Reengineering Class Session 3 – …gsme.sharif.edu/~processreengineering/BPR_session3.pdf1 Business Process Reengineering Class Session 3 – Fall 1385 Reengineering

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The Mission StatementThe Mission Statement

Why does this business exist? (purpose)Why will customers buy this product/service?Short/memorable/clear/communicate focusBalance needs of customers and companyNot about money! Passion & commitment Substance/staying power/independenceGrounding to see through rough times

Page 8: Business Process Reengineering Class Session 3 – …gsme.sharif.edu/~processreengineering/BPR_session3.pdf1 Business Process Reengineering Class Session 3 – Fall 1385 Reengineering

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The Vision StatementThe Vision StatementHow do you visualize your business?Your capture of the passion of the idea!Expansive, idealistic, your way (vision)Stimulate thinking, communicate passionPaint graphic picture of business you wantFun to read, emotional/sensory reactionsWhat if, why not? Inviting others’ ideas!Free flow, out of the box, your dream!

Page 9: Business Process Reengineering Class Session 3 – …gsme.sharif.edu/~processreengineering/BPR_session3.pdf1 Business Process Reengineering Class Session 3 – Fall 1385 Reengineering

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Case for ActionCase for ActionExample: Pharmaceutical CompanyExample: Pharmaceutical Company

We are disappointed with the length of time we require to ….Our leading competitors achieve significantly shorter cycles ...We have strong competitive and economic incentives to …Each extra week costs us $1 million in annual pretax profit …

– Business Context– Business Problem– Marketplace Demands– Diagnostics– Costs of Inaction

Page 10: Business Process Reengineering Class Session 3 – …gsme.sharif.edu/~processreengineering/BPR_session3.pdf1 Business Process Reengineering Class Session 3 – Fall 1385 Reengineering

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ترازيابي ترازيابي ‐‐بهينه كاوي بهينه كاوي

Benchmarking is the art of opening your mind to what has made other organizations successful combined with the ability to translate creatively insights into successful implementation of results.

صنعت تجربيات بهترين يافتن براي جستجو ترازيابي : تعريف . است عملكرد عالي سطوح به رسيدن براي آنها از استفادهو . است كارها انجام بهتر روشهاي به دستيابي هنر

كامال روشي . نمود اشتباه صنعتي جاسوسي با نبايد را ترازيابي .كارخود روش بهبود و ديگران كار از گرفتن ايده براي قانوني

Page 11: Business Process Reengineering Class Session 3 – …gsme.sharif.edu/~processreengineering/BPR_session3.pdf1 Business Process Reengineering Class Session 3 – Fall 1385 Reengineering

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همسنجي همسنجي،، ترازيابي ترازيابي،،بهينه كاوي بهينه كاوي BenchmarkingBenchmarking

If we don’t change directions, we might end up where we are headed(Chinese proberb)

Dantotsu, striving to the best of the best(Japanese method)

* Consistently researching new ideas & practices * Search for best practices /superior performance * Learn from other companies, even competitors

Page 12: Business Process Reengineering Class Session 3 – …gsme.sharif.edu/~processreengineering/BPR_session3.pdf1 Business Process Reengineering Class Session 3 – Fall 1385 Reengineering

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ياد گيري سازماني ياد گيري سازماني .سازمانها مانند افراد توان يادگيري دارند

. سازمانها از طريق يادگيري كاركنانشان ياد ميگيرند .در يادگيري سازماني يادگيري فردي الزم ولي كافي نيست يادگيري سازماني در شيوه هاي برخورد سازمان با مسائل

. و سياستها و رويه هاي جاري در آن منعكس شود .توان يادگيري مهمترين قابليت رقابتي يك سازمان است .چالش مهم مديريت افزايش توان يادگيري سازمان است

داستان قورباغه پخته داستان قورباغه پخته

Page 13: Business Process Reengineering Class Session 3 – …gsme.sharif.edu/~processreengineering/BPR_session3.pdf1 Business Process Reengineering Class Session 3 – Fall 1385 Reengineering

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ترازيابي ترازيابي ‐‐بهينه كاوي بهينه كاوي

بهبود كيفيت

كاهش هزينه ها

بهبود عمليات

عمليات جديد

بحرانپيشگيري

شناخت خود

و نتايجترازيابي معيارها

ترازيابي برنامه و استراتژي

و روشهاترازيابي فرآيندها ترازيابي داخلي ترازيابي از روي رقبا ترازيابي از بهترين ها

Page 14: Business Process Reengineering Class Session 3 – …gsme.sharif.edu/~processreengineering/BPR_session3.pdf1 Business Process Reengineering Class Session 3 – Fall 1385 Reengineering

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BenchmarkingBenchmarkingCompare to others / best in classSet ambitious / realistic targetsDevelop “it’s possible”, “let’s do it” cultureFind Relevant practice for your organizationLearn from Best Practice organizationsBetter prioritize and allocate resourcesContinue Performance improvements

Page 15: Business Process Reengineering Class Session 3 – …gsme.sharif.edu/~processreengineering/BPR_session3.pdf1 Business Process Reengineering Class Session 3 – Fall 1385 Reengineering

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Key ReasonsKey Reasonsfor Benchmarkingfor Benchmarking

Defining Customer RequirementsEstablishing Effective Goals and Objectives Developing true measures of productivityBecoming competitiveIndustry best practices

Without Benchmarking With Benchmarking

Page 16: Business Process Reengineering Class Session 3 – …gsme.sharif.edu/~processreengineering/BPR_session3.pdf1 Business Process Reengineering Class Session 3 – Fall 1385 Reengineering

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BenchmarkingBenchmarkingGeneral RulesGeneral Rules

Numbers in a vacuum are dangerous!“Industrial Tourism” is misleading!What without How & Why can do harmMeasure what’s needed, not what’s easyAdapt – not copy - & customizeAccept you’re not always the best!

Significant Performance Gaps– Factor analysis - Reengineering

Page 17: Business Process Reengineering Class Session 3 – …gsme.sharif.edu/~processreengineering/BPR_session3.pdf1 Business Process Reengineering Class Session 3 – Fall 1385 Reengineering

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BenchmarkingBenchmarkingProcess StepsProcess Steps

Action– Develop action plans– Implement specific actions

and monitor processes– Recalibrate benchmarks

Maturity– Leadership Position Attained– Practices fully integrated

processes

Planning– Identify what is to be

benchmarked– Identify comparative companies– Determine data collection methods

and collect data

Analysis– Determine current performance

gaps– Project future requirement levels

Integration– Communicate Benchmark findings

and gain acceptance– Establish functional goals

Page 18: Business Process Reengineering Class Session 3 – …gsme.sharif.edu/~processreengineering/BPR_session3.pdf1 Business Process Reengineering Class Session 3 – Fall 1385 Reengineering

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Benchmarking Metrics=> Benchmark Gap

How much, Where, When

Benchmark Practices=> How to close the gap

Knowledge, Practices, Processes

Management CommitmentOrganization CommunicationEmployee Participation

BenchmarkingBenchmarkingProgramProgram

Page 19: Business Process Reengineering Class Session 3 – …gsme.sharif.edu/~processreengineering/BPR_session3.pdf1 Business Process Reengineering Class Session 3 – Fall 1385 Reengineering

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Example of Functional Example of Functional BenchmarkingBenchmarking

Company Comparison PartnerNASA Event Management DisneySouthwest Airlines Fast Changeover Grand Prix Ammunition Mfg. Producing Smooth RevlonRover Distribution Stone QuarryDomino’s Pizza Rapid Deployment Emergency

ServicesBritish Airways Cleaning British

Airways

Page 20: Business Process Reengineering Class Session 3 – …gsme.sharif.edu/~processreengineering/BPR_session3.pdf1 Business Process Reengineering Class Session 3 – Fall 1385 Reengineering

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بر عليه بهينه كاوي بر عليه بهينه كاوي بهانه هاي مديريت بهانه هاي مديريت

We’re not copy cats We’ll lose competitive advantage We’re already the best We’re too busy We’re different We’re too small

Performance Performance MeasurementMeasurement

You cannot manage . . . what you cannot measureHard vs. Soft MeasuresFinancial vs. Non-financial– Result– Diagnostic– competence

Page 21: Business Process Reengineering Class Session 3 – …gsme.sharif.edu/~processreengineering/BPR_session3.pdf1 Business Process Reengineering Class Session 3 – Fall 1385 Reengineering

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ذهن بكر ذهن بكر / / بازآفريني با صفحه سفيد بازآفريني با صفحه سفيد : : ١١راهكار راهكار

شروع مستقيم از نو با ايده جديد بدون رابطه با وضع موجود

شروع با ساده ترين مدل و روش ترازيابي و مدل كشورهاي ديگر

استفاده از طوفان مغزي استفاده از مدل هاي منطقي

اهداف/ شروع با داليل وجودي تفكر غيرخطي و غير متداول

Page 22: Business Process Reengineering Class Session 3 – …gsme.sharif.edu/~processreengineering/BPR_session3.pdf1 Business Process Reengineering Class Session 3 – Fall 1385 Reengineering

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انتقاد و ساده سازي ريشه اي وضع موجود انتقاد و ساده سازي ريشه اي وضع موجود : : ٢٢راهكارراهكار

بررسي دقيق وضع موجود

مرور و بازرسي زيرفرايندها مبادرت به حذف فعاليت ها

مبادرت به ساده سازي

ضرورت و اهميت هدف تلفيق اهداف / امكان حذف

كفايت هدفهاي فرعي نقش فرآيند وچگونگي انجام آن

ادغام فرآيندهاي مشابه تغيير توالي يا همزماني فرآيندها تغيير تكنولوژي انجام فرآيندها

محل مناسب انجام فرآيندها

Page 23: Business Process Reengineering Class Session 3 – …gsme.sharif.edu/~processreengineering/BPR_session3.pdf1 Business Process Reengineering Class Session 3 – Fall 1385 Reengineering

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IBM Reengineering ExperienceIBM Reengineering Experience

IntroductionIntroductionIBM: International Business Machines Corporation.Placed in: Armonk, New York.Has got the first place in manufacturing mainframes.Primary force behind the proliferation of the PC’s.

Problems show up:Problems show up:Serious competitors in PC market.

Primary Solution:Breaking up IBM into smaller units.

Page 24: Business Process Reengineering Class Session 3 – …gsme.sharif.edu/~processreengineering/BPR_session3.pdf1 Business Process Reengineering Class Session 3 – Fall 1385 Reengineering

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Reengineering brought by Gerstner:Reengineering brought by Gerstner:• He was an outsider.• He was a costumer of IBM.

As a result:• He had a new perspective.• He knew costumers’ needs.

He focused on:He focused on:• Near term company operations.

- reducing costs and cycle times.- increasing costumer satisfaction.

• Emphasizing strategy.- becoming one IBM.

• Assigning a senior executive as a leader of each reengineering effort.

• Establishing “Dear Colleague” letters.

• Checking the results of each initiative quarterly.

His initiatives:His initiatives:

Page 25: Business Process Reengineering Class Session 3 – …gsme.sharif.edu/~processreengineering/BPR_session3.pdf1 Business Process Reengineering Class Session 3 – Fall 1385 Reengineering

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Reengineering cycleReengineering cycleTransform the process.Build applications.Run IT systems to support the new process.Leverage the knowledge from these efforts to transform the processes again.

Transform the process

build applications

Run IT systems

Leverage the knowledge

Page 26: Business Process Reengineering Class Session 3 – …gsme.sharif.edu/~processreengineering/BPR_session3.pdf1 Business Process Reengineering Class Session 3 – Fall 1385 Reengineering

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keys to IBMkeys to IBM’’s success:s success:• Define core business process• Assigning each process to one

of the senior executives.• Team working

Transformation to an eTransformation to an e--business:business:• Copmanies above the e-line have already

linked their processes and IT.• Getting the promised benefits from the

initiatives smoothens the way.• Decision making is time consuming.• There’s not “ONE” right answer.

Page 27: Business Process Reengineering Class Session 3 – …gsme.sharif.edu/~processreengineering/BPR_session3.pdf1 Business Process Reengineering Class Session 3 – Fall 1385 Reengineering

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Personal business commitments:Personal business commitments:A key part of human resource process.Consistent approach to setting objectives, evaluating and getting paid.Payments based on unit performance.We measure this performance with: – Business results.– Process metrics.

Variable Pay:Variable Pay:An individual’s “variable pay” is calculated based on his/her individual performance within the overall performance of their group.IBM is giving them a direct stake in its success.

Page 28: Business Process Reengineering Class Session 3 – …gsme.sharif.edu/~processreengineering/BPR_session3.pdf1 Business Process Reengineering Class Session 3 – Fall 1385 Reengineering

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ChairmanChairman’’s Award:s Award:This award is given to one or two teams, based on:• Demonstrating excellence in costumer relations.• Improving business operations.In 1999, this reward went to procurement process.

Procurement Process Award:Procurement Process Award:• Reducing Purchase order processing time. • Reducing the time it takes to get a contract.• Internal satisfaction.• Decreasing the amount of “Maverick buying”. • Reducing contract length to 6 pages.

Page 29: Business Process Reengineering Class Session 3 – …gsme.sharif.edu/~processreengineering/BPR_session3.pdf1 Business Process Reengineering Class Session 3 – Fall 1385 Reengineering

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Reengineering includes:Reengineering includes:• The process.• IT systems which support it.• Organizations that use it.• Culture of the corporation.

Reengineering results:Reengineering results:The organization became flatter.Layoffs occurred.Moving to a collaborative environment.

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Keys To IBMKeys To IBM’’s Success:s Success:• Passionate embrace of reengineering.• Reengineering leading by top executives.• Defining a new vision: A company that would satisfy

costumers’ needs.• Constant communication.• Assigning responsibility for each process to a very senior

executive.

Lessons Learned:Lessons Learned:Reengineering has to be undertaken in a disciplined fashion.It is not managed as a stand-alone activity.It’s NOT a smooth way.It’s part of line management’s responsibility.