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Business Process Re-engineering
(BPR)
PK Solutions, Inc.Pat Vaia, PMP
President & Executive Adviser
Date: May 11, 2006
Business Process Re-engineering BPR Concepts & Good Project Management Practices
Capture, communicate and verifying current and redesigned business processes
Practical aspects of conducting a BPR effort
Produce deliverables
Know who your customer/s are – everyone you interface with !!!!!!
Objectives of a BPR EffortConsider general process redesigning principles
Improve business processesOpportunity identificationFeasibility analysis
Set goals for redesigned process components
ProcessesActivitiesDeliverables
Principles of BPROrganizational Structure
Remove barriersSupport business processes
Customer InterfacesWork from the customer perspective
AutomationAutomate to advantage
General PrinciplesSimplicityEmpowerment
Process DesignThink horizontally
Simpler is BetterAvoid Over-engineering
Work hard to simplify
Eliminate multiple points of contact with & for the customer
Eliminate errors resulting from multiple contactsEliminate need to reconcile differing informationReduce delays resulting from reconciliation
REMEMBER: Simple ProcessesLess CostlyMore Flexible
Enable Workers to Make Decisions
Vertical CompressionProcess decision-making is not strictly a management taskWorkers are empoweredDecision-making becomes part of work
AdvantagesFewer Communication DelaysLower Management OverheadBetter Customer Response
Perform Steps in Natural Order
Parallel tasks rather than sequential procedure
Precedence set only by need
Speed up the process by:Accomplishing tasks simultaneouslyReducing time lag between early and late steps
• Less chance of changing requirements
• Less need for rework
Multiple Version Processes Single solution processOne-size-fits-allToo complex for standard/simple cases
Processes require flexibility for:Different marketsDifferent situationsResource variationsSpecial customer requests
Reengineered process contains:Simple, standard path (80% - 90%)Exception handling path (8% - 18%)Large complex path (2%)
Perform Work Where It Makes SenseAdministrative tasks performed by the process team
Small purchases
Tasks not requiring a specialist
Work off-loaded from team
Specialized capabilitiesMore cost-efficient
Reduce AuditsChecks and Controls
Controls cost more than purchasesUse only when it makes economic senseImplement aggregate or deferred controls
Reviews and InspectionsDesigns quality into a processIdentifies problems when they occurDownstream inspections
• breaks down team spirit• does little to improve
quality• adds higher costs
• Ex: ReworkChecks, controls and inspectionsadd no value for the customer
Combine Several Jobs into One
Assign multiple process activities to one person
Avoid the Industrial Revolution
Division of tasksSpecialization of laborUnskilled work forceNo need for communication
Create Task Inter-relationships
Organize Around ProcessesFormation of teams to perform an entire process
Do not split work by function (organization)Teams co-locatedEach person understands another's responsibility
• Cross-Training
Eliminate/minimize hand-offsReduces delays, errors and rework
Reduces management overhead
Adopt Customer PerspectiveAccessibility
Be available when the customer wants to interact
Information
Require only the data which cannot be captured elsewhere
Wants and Needs
What are the customers goals, objectives - wants and needs?
Are we meeting these?
Are there unknown wants?
Provide Single Point of Contact
Case manager roleSingle point of contactProcess “owner”Has access to all people and information systems involved in the processEmpowered by management to change the process
Automate AppropriatelyAvoid Costly Automating for Automation’s Sake
Weigh automation benefits against costs
• Technology acquisition
• System development and maintenance
• Work force training• Obsolescence
Avoid automating current processes unless needed
Do wrong things fasterSlows changes to effect improved processes
Automate Repetitive Tasks
Automation strong pointLeave interesting jobs for people
Business Decision are made by “people” not machines or software
Where to Look for Process Improvement
Process ImprovementOpportunity Driven
Begins with current process workflowFocuses on process componentsIdentifies opportunities for incremental improvementUse as a checking mechanism for approach
IncrementalProducts and servicesResourcesActivitiesOrganizationsInterim deliverables
Performance InhibitorLook for “A factor which negatively affects the business’s ability to attain its goals”
Result from:• Poorly designed or not
designed processes• Invalid assumptions• Environmental influences
Presents a source for process improvement or reengineering opportunities
Opportunity“A chance for improvement in a business process that allows goals to be attained (fully or partially)”
Business process may have multiple opportunitiesEach opportunity should be weighed
• Costs• Benefits• Risks• Priority of the goals it
supports
Product and Service OpportunitiesCustomer
How can the customer’s wants and needs be better understood?Are the customer’s wants and needs being met?Are there other markets for the products?
Product / ServiceWhat improvements or added value canbe made to products and services?Are products and services providedin a correct and convenient form?
Resource OpportunitiesSuppliers (Who are the Suppliers – Inputs)
How can we communicate our wants and needs?Can we assist in improving our supplier’s performance?Are there other suppliers capable of providing resources?
ResourcesWhat is state of the art?
• Material - quality, technology• Finances - cost of funding• Labor - skill set, training
Are resources provided in a correct and convenient form?Are resources provided in a timely form?Is there additional value suppliers can provide?
Activity OpportunitiesCost
Can the activity make more efficient use of resources?How can non-value-adding activities be minimized?
TimelinessHow can wait time (in-queue time) be reduced?How can lag time (out-queue time) be reduced?
PerformanceIs the activity performed by the proper organization or role?Do the performers of the activity possess the proper skills, training, etc.?Is the proper environment and equipment available to the activity’s performers?
Organizational OpportunitiesManufacturing Companies
Field Operations
Finance
Production
EffectivenessIs the location structured to effectively perform its activities?Do the proper skills exist within the organization?
InteractionHow can the number be reduced to minimize hand-offs (workflows)?Is it conveniently located to pass work to other organizations?
Interim Deliverable OpportunitiesQuality
How can the quality of the deliverables be improved?How can deliverables be made more usable by the receiving activity?
TimelinessHow can deliverables be passed between activities more quickly?How can the number of workflows be minimized?
Opportunity AnalysisCost / Benefit Analysis
Immediate (one time) costsOn-going costsImmediate (one time) benefitsOn-going benefits
Risk AnalysisRisk identificationCostLikelihood
Goal AnalysisGoal/s are met (supported) by the opportunityPriority of these goals
Classification of Goals
Operational GoalsQuantify the redesigned business process
Target the day-to-day operations of the business process
AddressThe process as a wholeIndividual activitiesInterim and ultimate deliverables
Business Process GoalsSet performance levels for the entirebusiness process in term of:
Responsiveness• What will be the interval from the initiating event
to the ultimate deliverable?Financial
• What is the value of this process?• How much does/will the process cost
to perform?Organization
• What will the organizational structure look like?• What will be the staffing levels?
Activity GoalsSet performance levels (Metrics) for individual activities in terms of:
Timing• How long will it take to perform?• How long will work wait (in-queue, out-queue)
before it is performed?Cost
• How much will it cost to perform?• What is the value added to the ultimate
deliverable?Performance
• What are the performance measures assigned to the person (organization) performing this activity?
• What incentives and/or consequences are in place for meeting this activity’s goals?
Deliverable GoalsSet performance levels for interim and ultimate process deliverables in terms of:
Quality• How will we measure quality?• Of these measurements, what level will we
attain?Efficiency
• How quickly will this deliverable be passed between activities?
• What form will the deliverable be in when passed?
Cost• How much will it cost to pass
this deliverable to the next activity?
THANK YOU
Defining & Quantifying Goals