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BUSINESS PROCESS RE-ENGINEERING

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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.
(Davenport, 1993)
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What is a Business Process?

• A group of logically tasks that use the firm's
resources to provide customer-oriented results in
support of the organization's objectives
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Business Process Redesign

• The term business process redesign refers to a complete overhaul of a company's key
business process with the objective of achieving a quantum jump in performance
measures such as return on investment (ROI), cost reduction, and quality of service.
Business processes that can be redesigned encompass the complete range of critical
processes, from manufacturing and production to sales and customer service.
Businesses may call in consultants to direct or assist with the redesign.
• Business process redesign is a complete overhaul of a company's key business
processes.
• A BPR improves efficiency by cutting slack and excess, reducing costs, and
sharpening management.
• Success is often measured using profitability metrics.
• BPRs may be costly and time-consuming, and may also lead to layoffs and the
disruption of workflow.
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What is Re-engineering
• Reengineering is the fundamental rethinking and
redesign of business processes to achieve
dramatic improvements in critical, contemporary
measures of performance, such as cost, quality,
service and speed.
(Hammer & Champy, 1993)
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Why Reengineer?
• Customers
– Demanding
– Sophistication
– Changing Needs

• Competition
– Local
– Global
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Why Reengineer?
• Change
– Technology
– Customer Preferences
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Business process re-engineering is a

business management strategy, originally
pioneered in the early 1990s, focusing on the
analysis and design of workflows and processes
within an organization. BPR aimed to help
organizations fundamentally rethink how they do
their work in order to dramatically improve
customer service, cut operational costs, and
become world-class competitors.
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What is BPR?

• Reengineering is the fundamental rethinking

and redesign of business processes to achieve
dramatic improvements in critical,
contemporary measures of performance, such
as cost, quality, service and speed.
(Hammer & Champy, 1993)
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BPR -Defination
• Hammer and Champy, founders of the theory of Business Process
Reengineering (BPR), define BPR as: “the fundamental
rethinking and radical redesign of the business processes to
achieve dramatic improvements in critical, contemporary
measures of performance, such as cost, quality, service and
speed.“
• As Kliem points out in his paper “Risk Management for Business
Process Reengineering projects”, because of the drastic impact
that BPR may bring, BPR projects often end in failure. Ambitious
companies who are willing to take risks and desiring big payoff
are in favor of BPR.[9]
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Characteristics of Business Process Reengineer

• Controls, checks, other nonvalue-added work is

minimized
• Reconciliation is minimized - minimize external
contact points
• Hybrid centralized / decentralized operation is
used
• A single point of contact is provided for the
customer
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Key Characteristics
• Systems Philosophy
• Global Perspective on Business Processes
• Integrated Change
• People Centred
• Focus on End-Customers
• Process-Based
• Clarity of Purpose
• Simplified and Streamlined Operation
• Increased Efficiency
• Better Results and Products
• Maximized ROI
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Performance Improvement
• Improvement is always essential to continue your position in the
global economies even it is the most effective choices to fierce
the global competition.
• In performance improvement team members involve on part time
basis at the same time they consider process in the extended time
frame.
• Here organisational changes also take place, there are no time &
limitation.
• Here focus is one on the narrowly defined process that mean the
employee puts effort to achieve higher level process.
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Advantages Of The Continuous Improvement:

• Workflow:
– Continuous improvement highly supports the improvement of workflow in your organization. At the same
time, it is the most important aspects to identify specific problems.
• Problems Solving Technique:
– Continuous improvement supports solving problems associated with the process; at the same, it offers
great control to the project team members by how they can easily uncover problems. Also, it is the finest
way to determine the finest solution to solve problems.
• Reduced Root Causes:
– the Continuous improvement process is mainly designed to overcome all the problems; it is a great remedy
for any situation. Most business people determine the problem by using this method; at the same time, they
also find suitable techniques for how to fix them.
• Improved Streamline:
– the streamlined processes also require less time, efforts, and money requirement, which is also less. This
process automatically cut down the operational costs, but it quickly produces desired results. Normally the
process improvements create the best service outputs, so you no need to involve in the rework process.
• Affordability:
– the business people experience great benefits by investing fewer amounts. This process offers wonderful
benefits; by using this method, every person can enjoy an operational advantage; alternatively, it is the
greatest choices to beat your competitors with ease
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Difference Between Re-Engineering And Continuous Improvement

• Management Involvement:
– Continuous Process Improvement involves the improvement of the work processes; simultaneously, Process
Re-engineering involves the managers in the hands-on role that means PR often makes great changes in your
organizational structures, even it supports the redesigning of the jobs.
• Involvement Of Team:
– team members also involve part-time simultaneously; they consider the process in the extended time frame.
Alternatively, in PR, employers work regularly even they put effort to enhance your organization grow in a
shorter time frame.
• Improvement Goals:
– Business people achieve successive incremental improvements in the process of CPI in a short period of time.
The Process reengineering is also done based on the time period, which means it will be done periodically. So
it is a great support to achieve dramatic improvement
• Implementation Approach:
– a lot of incremental improvements made within the CPI it adds significant improvements. Still, the process of
reengineering is the process of paying more attention to the outcome; even it is the process of achieving
breakthrough improvements over the CPI.
• Organizational Change:
– organizational changes have also taken place. There are no time limitations; In the PR, radical process changes
only occur in the management system, training, organizational, etc.
• Extent Of Focus:
– the focus is one of the narrowly defined processes that mean the employees put efforts to achieve a higher-
level process.
• Information Systems:
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Systems Perspective

Feedback

Inputs Transformation Outputs

Environment
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Process Based
• Added Value
– BPR Initiatives must add-value over and above the
existing process

• Customer-Led
– BPR Initiatives must meet the needs of the customer
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Integrated Change
• Viable Solutions
– Process improvements must be viable and practical

• Balanced Improvements
– Process improvements must be realistic
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People-Centred
• Business Understanding
• Empowerment & Participation
• Organizational Culture
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Focus on End-Customers
• Process improvements must relate to the needs of
the organization and be relevant to the end-
customers to which they are designed to serve
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Principles for BPR

Principles Practice
Organize around outcomes, not tasks. Do not create jobs based on task
Create jobs based on outcome
E.g., Creating a dedicated small team to complete the raw material
procurement, design, manufacture, promotion and related jobs for a
particular product.

Have those who use the output of the process Reduce overhead associated with coordinating two connected
perform the process. processes.

Subsume information-processing work into Take advantage of new technology and let front-line employees
the real work that produces the information. process information by themselves.

Treat geographically dispersed resources as Use databases, cloud computing, and other related technologies to
though they were centralized. optimize the company’s resources so that it can get benefits of scale
and flexibility.

Link parallel activities instead of integrating Use networking, telecommunication, and sharing database to forge
their results. links between parallel functions and to coordinate them while their
activities are still in process

Put decision points where the work is Let employees have the right to make the decision during their works.
performed and build controls into the
process.

Capture information once and at the source. Reduce information errors and workload associate with data entry
E.g., Using Electronic Data Interchange (EDI) to eliminate
duplicating data
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Tools for BPR

• Simulation
• Flow diagrams
• Work analysis
• Application development
• Workflow software
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Implementing a BPR Strategy : Key Steps

Select The Process & Appoint Process Team

Understand The Current Process

Develop & Communicate Vision Of Improved Process

Identify Action Plan

Execute Plan
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BPR Process-steps in BPR Process

1. Develop Vision & Objectives

2. Understanding the existing Process
3. Identify process for Re-Design
4. Identify Change levers
5. Implement the new process
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Information Technology & BPR

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Benefits From IT
• Assists the Implementation of Business
Processes
– Enables Product & Service Innovations
– Improve Operational Efficiency
– Coordinate Vendors & Customers in the Process
Chain
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Computer Aided BPR (CABPR)

• Focus
– Business Processes
– Process Redesign
– Process Implementation
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Role of IT
• Shared databases, making information available
at many places
• Expert systems, allowing generalists to perform
specialist tasks
• Telecommunication networks, allowing
organizations to be centralized and decentralized
at the same time
• Decision-support tools, allowing decision-
making to be a part of everybody's job
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• Wireless data communication and portable

computers, allowing field personnel to work
office independent
• Interactive videodisk, to get in immediate contact
with potential buyers
• Automatic identification and tracking, allowing
things to tell where they are, instead of requiring
to be found
• High performance computing,and school,
allowing on-the-fly planning and revisioning
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Myths of BPR
• Simply implementing a new ERP system will drive process improvements
• Business process improvements can be done without organizational change
management
• You can’t reengineer business processes before knowing which software you are
going to implement
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Advantages of BPR
• Performance improvement
• Increase in profits
• Increase in productivity
• Better business practices
• Enormous cost reduction
• Speed up business processes
• Streamline business processes and systems
• Companies easily adapt to changing times and reduce operating expenses
• Improve company profitability and sustain competitive advantage
• Boost employee productivity
• Increase customer satisfaction by improving the quality of products and
services
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Disadvantages of BPR
• BPR has bad reputation for major layoffs.
• It never change management thinking.
• Lack of management support for the initiative
and thus poor acceptance in organization.
• Exaggerated expectations regarding the benefits
of BPR
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Disadvantages of BPR
• Underestimation of resistance to change within
organization.
• Implementation of generic best practices that do
not fit specific company needs.
• Over-trust in technology solutions.
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TQM vs BPR
• Since TQM and BPR concepts have a cross-functional relationship, it is helpful to
know the difference between TQM and BPR for a better understanding of these
concepts.
• Both these concepts are related to improving the efficiency in an organization
• What is TQM?
• Total quality management (TQM) is a management philosophy practiced in many organizations, focusing on
continuously improving the quality of its products and services in order to fulfill the customer expectations
without influencing the ethical values. Therefore, everybody who is related to the organization from top to
bottom has a huge responsibility in providing quality products or services.
• In order to achieve TQM by fulfilling the requirements of the customers, one needs to be thoroughly
concerned about the following principles.
– Necessity of producing quality output in the first time.
– Focusing on satisfying the customer expectations.
– Encouraging mutual respect and teamwork.
• Benefits of TQM
– Organization becomes more competitive.
– Helping to establish a new culture which enables growth and long-term success.
– Creates a productive working environment in which everyone can succeed.
– Helps to reduce stress, waste and defects.
– Helps to build partnerships, teams and co-operation.
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What is the difference between TQM and BPR?

• TQM and BPR have a cross-functional relationship.

• TQM is concerned about improving productivity through quality
improvements while BPR is about making process improvements through
radical redesign and use of advanced technologies.
• TQM is focusing on continuous improvements while BPR is concerned about
product innovations.
• TQM emphasis on the use of statistical process control while BPR emphasis
on the use of information technology.
• • Both top down and bottom up approaches can be used in implementing
TQM, but BPR can be implemented only through a top-down approach.
• Both BPRE and TQM primarily focus on customers. Success of BPRE and
TQM is reflected in adequate response to the changing needs of customers in a
competitive business environment. Even though BPRE does not explicitly
high-light the concept of internal customers like TQM, its success very much
depends on satisfaction of internal customers.
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• Both BPRE and TQM are process-oriented concepts involving cross-functional

activities. While TQM may or may not involve break-through improvements, BPRE
always attempts to achieve major or dramatic improvements in the existing business
processes. For process improvement, TQM and TQC tools such as Pareto analysis,
cause-and-effect diagram, control charts etc., to identify the root causes of problems
and to eliminate them. BPRE aims at drastic changes to improve the processes which
are markedly different from the existing processes.
• Both BPRE and TQM emphasise cultural changes in the organisation and behavioural
changes in employees by introducing customer focus and process-orientation in the
minds of employees. Employees are motivated to behave not just as job holders in the
organisation but as part of the whole process of the business.
• Both BPRE and TQM require top management support. The chief executive of the
company has to play the role of a leader for successful implementation of BPRE and
TQM. Since both BPRE and TQM are supporting processes to achieve business goals,
it is necessary that the top management must take initiative in these processes, rather
than delegating the responsibility to middle management.
• Both BPRE and TQM are not “one-time” experiments. Both need to be implemented on
a continuous basis.
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WHAT IS ISO CERTIFICATION?

• ISO certification certifies that a management system, manufacturing process, service,
or documentation procedure has all the requirements for standardization and quality
assurance.
• ISO (International Organization for Standardization) is an independent, non-
governmental, international organization that develops standards to ensure the quality,
safety, and efficiency of products, services, and systems.
• ISO certifications exist in many areas of industry, from energy management and social
responsibility to medical devices and energy management.
• ISO standards are in place to ensure consistency.
• Each certification has separate standards and criteria and is classified numerically. For
instance, the ISO certification we currently hold at Mead Metals is ISO 9001:2015.
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• ISO 9001 DEFINITION

– The certification ISO 9001:2008 includes three components: ISO, 9001, and 2015. Here's
what each component represents:
• ISO
– As mentioned above, ISO refers to the International Organization for Standardization. This
organization develops the standards, and it does in order to certify businesses or
organizations. Certification is handled third-party and tested annually.
• 9001
– The number appearing after ISO classifies the standard. All standards within the ISO 9000
family refer to quality management. ISO 9001 is among ISO's best-known standards, and it
defines the criteria for meeting a number of quality management principles. It helps
businesses and organizations be more efficient and improve customer satisfaction.
• 2015
– The final number in an ISO certification refers to the version of the standard that's being met
and is represented by the calendar year those standards were launched. 2015 is the fifth
edition of ISO 9001. It was launched in September 2015, and Mead Metals has updated its
processes to meet the specifications of this newest version.
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What is ERP software?

• Enterprise resource planning (ERP) software is software that integrates and

organizes data for the front and back offices operations. ERP solutions
combine a company’s key operations, such as manufacturing, distribution,
finance, and human resources, into a single software system. The platforms
centralize data in order to reduce manual entry, make business data visible
across teams, and can even integrate partner data to ensure high transparency
and fluid operations. Top best ERP software can guarantee all the above
activities are controlled.
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SAP ERP software

• The word “SAP” stands for System Application Programming, this is the name of a unit
established in 1972 by five members of the IBM company. Nowadays, SAP has grown
to become a leading ERP software company with more than 232,000 customers, 30,000
companies, having branches in 188 different countries globally. SAP’s position is now
as valuable as the big guys in the software industry such as Oracle, IBM, Microsoft, etc.
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Summary
• 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

• Rules and symbols play an integral part of all BPR initiatives

• Don’t assume anything - remember BPR is fundamental
rethinking of business processes