Upload
piers-terry
View
217
Download
0
Embed Size (px)
Citation preview
Copyright 2002 Monash University
IMS5042Information Systems Strategic Planning
Week 7: Elements of IS planning Theory:
4. Business Process Re-engineering
Copyright 2002 Monash University2
Agenda
1. Introduction to BPR (Hammer version)
2. Doing BPR (Hammer version)
3. BPR after Hammer: How do you do it?
4. BPR and its Implications for IS Planning
5. BPR and planning philosophy
Copyright 2002 Monash University3
Business Process Re-engineering (BPR): References
Hammer M (1990), ‘Re-engineering work: Don’t automate, obliterate’, HBR, Jul-Aug, pp104-112
Hammer M & Champy J (1993), Re-engineering the Corporation: A manifesto for business revolution, Harper Business
Hammer M & Stanton S (1995), The Re-engineering revolution, Harper Collins Al-Mashari M & Zairi M (1999) ‘BPR Implementation process: an analysis of key
success and failure factors’, Business Process Management Journal, Vol 5, No 1, pp87-112
Davenport T & Stoddard D (1994) 'Re-engineering: Business change of mythic proportions?', MIS Quarterly, Vol 18, No 2, pp121-127
Kettinger W, Teng J & Guha (1997), 'Business process change: A study of methodologies, techniques and tools', MIS Quarterly, March, pp55-79
Strassmann P (1994), 'The Hocus-pocus of re-engineering', http://www.strassmann.com/pubs/hocus-pocus.html
Copyright 2002 Monash University4
1. Introduction to BPR (Hammer version)
BPR achieved its initial fame/notoriety largely through the works of Michael Hammer
His works (listed in references) became huge best-sellers world-wide
Hammer was head of an IT consulting firm based near Harvard Business School; most of his work is industry-based
Style is that of a consultant rather than an academic (references? Supporting material?!)
Copyright 2002 Monash University5
What is BPR? Hammer’s “Official” Definition
Re-engineering is “… the fundamental rethinking and radical re-design of business processes to bring about dramatic improvements in performance”. (Hammer and Stanton, 1995)
Key terms:• ‘dramatic’ = quantum leaps in some aspect of performance• ‘radical’ = don’t improve; throw away and start again• ‘processes’ = group of related tasks that create value• ‘ redesign’ = change in how work is done - independent of
employees
Copyright 2002 Monash University6
Rationale for need for BPR
IT investments have not given the expected improvements in outcomes
Companies have used IT to automate and speed up old processes, but otherwise leave them intact
Old processes are geared towards efficiency and control; new need is for speed/innovation/service /quality
“It is time to stop paving the cow paths”. Use IT to create new business processes which are geared to current needs
Copyright 2002 Monash University7
Why did organisations design their existing inefficient processes? Sometimes they didn’t. Processes were not
designed, but just happened• Special cases and quick fixes became entrenched
practice• Ad hoc and temporary arrangements became standard• Work arrangements persisted long after the special
circumstances which created the need for them had passed
Processes which were designed are usually old• Design goals were usually related to control (like the
typewriter keyboard)• Processes preceded modern IT and were based around
‘information poverty’
Copyright 2002 Monash University8
Organisational outcomes of poor process design
Processes are treated as separate and fragmented - each controlled by a different organisational unit
Poor integration of processes and information
“Tunnel vision” among groups who have goals related only to their own processes
Lack of accountability to overall outcome No-one really understands the ‘big picture’ of
how it all fits together
Copyright 2002 Monash University9
Inadequacy of traditional remedies
Managers try to run their tasks as efficiently as possible, but this often has adverse effects on the next task in line (and the overall outcome)
Managers’ adaptations to changing circumstances tend to add new problems
Attempts to improve poor outcomes usually involve adding an extra task to the process (eg quality control procedures) which worsens the situation
Copyright 2002 Monash University10
The BPR remedy
Don’t try to improve existing processes. Destroy them!
Break free of out-moded principles on which existing processes are based and develop new ones relevant to current circumstances
Re-design processes from a cross-functional perspective
Challenge conventional wisdom and constraints; focus on the desired end result and look for the best way to achieve it
Copyright 2002 Monash University11
Outcomes of BPR
Replace people and tasks Eliminate geography as an issue Integrate processes across functions Manage and administer data across processes IS/IT function - friend or foe of process change?
Outsourcing Examples:
• Ford Motor Company accounts payable processing (see diagrams, Hammer (1990))
• Mutual Benefit Life Insurance application processing
Copyright 2002 Monash University12
2. Doing BPR (Hammer version) Almost all organisations have to do BPR in order to
remain competitive. “reengineering is the only solution” (H&S, p12)
“No-one in an organisation wants re-engineering. It is confusing and disruptive and affects everything people have grown accustomed to.” (H, p112)
“… the strain of implementing a re-engineering plan can hardly be over-estimated” (H, p112)
“Re-engineering cannot be planned meticulously and accomplished in small and cautious steps. It’s an all-or-nothing proposition with an uncertain result.” (H, p105)
Copyright 2002 Monash University13
Success and failure in BPR
50-70% of re-engineering efforts fail This has been interpreted as a normative statement,
but it was not meant to be so BPR has no inherent failure rate; failure is due to not
knowing what you are doing or not doing it properly
Copyright 2002 Monash University14
The top ten rules for successful BPR (H&S 1995)
Make sure you know what BPR is Re-engineer only processes; identify them first Limit the time spent analysing existing processes Get strong committed top-level leadership Be bold, creative and innovative in re-design Test new ideas before implementing them Do it quickly; one year maximum Allow no limits on what can be changed Don’t use standard implementation approaches; be
fast, improvisational and iterative Take account of the concerns of the affected people
Copyright 2002 Monash University15
3. BPR after Hammer: How do you do it?
A tidal wave of literature in the business and IS/IT worlds describing:• Variations on Hammer’s definition of BPR;• Case studies demonstrating the success or failure
of BPR• Methods for conducting and implementing BPR
studies• Issues in BPR implementation and philosophy
Considerable controversy over whether BPR is possible or desirable and whether Hammer or anyone else’s version is better
Copyright 2002 Monash University16
BPR after Hammer
For a good overview of literature on some of the key issues in BPR, see Al-Mashari & Zairi (1999)• Changing systems and culture• Management support• Organisational structure• Project management• IT infrastructure
Figure 1 from p106
Copyright 2002 Monash University17
Methods for doing BPR?
Hammer’s ‘rules’ and principles for BPR are extremely vague (and in parts contradictory). Clear on what to do, but not much advice on how to do it
The academic literature which followed produced nothing much more specific
Consultants produced lots of methodologies, but often without much justification
Copyright 2002 Monash University18
Methods for doing BPR: Kettinger & Teng (1998)
Attempted a consolidation of existing BPR practice
Reviewed academic literature Examined case studies Analysed consultants’ methodologies Produced a composite BPR framework
comprising the most popular elements of existing approaches
Copyright 2002 Monash University19
Kettinger & Teng method for doing BPR (just one example!)
See diagram (p96/97 Phase 1: Strategy linkage Phase 2: Change planning Phase 3: Process problems Phase 4: Social redesign Phase 5: Technical redesign Phase 6: Process re-generation Phase 7: Continuous improvement
Copyright 2002 Monash University20
5. Implications for ISP
IT and IS are critical to the success of BPR Not much written about the specifics of what IS
could/should contribute, but the IS is a key element of business process re-design
Some key issues begin to emerge about IS and IT infrastructure
Copyright 2002 Monash University21
4. Planning with CSFs: Assumptions and implications
What does the CSF approach assume about IS and IS strategy?
What does the CSF approach assume about planning? How does BPR compare with the other methods?
Copyright 2002 Monash University22
BPR: Some of its assumptions about IS strategy
Strong concern with explicitly tying IS strategy to business planning (IS and business inter-linked)
IS strategy is concerned with improving the efficiency of internal operations
IS is the enabling force behind revolutionary change in business processes
Implementation of IS initiatives to support dramatic business change is non-problematic
Copyright 2002 Monash University23
BPR: Some of its assumptions about planning
The basic objective of strategic planning is to completely re-design business processes to improve operational efficiencies
Planning is a visionary creative design activity Achievement of change will be resisted by
established organisational interests which must be fought and overcome
Planning is a process of constant on-going revolutionary change
Revolution is a necessity; stagnation means death
Copyright 2002 Monash University24
Planning philosophy behind the BPR approach??
Formalised
Unified
Comprehensive
Utopian
Rational
Deterministic
Directed
Dictatorial
Democratic
Emergent
Political
Contingent
Pluralist
Pragmatic
Ad hoc
Incrementalist