MIS 792 - Section 2 - Fall 1996

Business Process Reengineering

Minder Chen, Ph.D.

Institute of Graduate and Professional Business Studies

George Mason University

703-993-1788 (F) 703-993-1870

Internet: MCHEN@OSF1.GMU.EDU Office: Enterprise Hall 273 Office Hour: 3:00 ~ 6:00 p.m.

Home Page: http://mason.gmu.edu/~mchen/bpr/

A recent cover story in Fortune Magazine, entitled "Reengineering: The Hot Management Tool," claims "It (reengineering) is hot. It is happening. It is now." Ford reduced its accounts payable department by 75% via reengineering. Bell Atlantic cuts the cycle time for installing carrier access services for customer from 15 days to 3 days. Union Carbide has used reengineering to scrape $400 million out of fix costs in just three years. IBM Credit Co. reduced loan application turn-around time from 6 days to 4 hours while loan applications increase by 100 times (not 100%). No personnel has been added. No wonder, Peter Drucker asserted "Reengineering is new, and it has to be done." Reengineering is so hot that the label is being slapped on everything from requests for new chairs to across-the-board layoffs. However, true reengineering is the radical redesign of core business processes to achieve major gains in cost, service, and time.

This course is designed will introduce the concepts and principles of reengineering. Students will learn how to initiate and implement a reengineering project in their own companies. Examples of reengineering will be studied to illustrate how companies are profiting from reengineering, and a life-cycle approach to reengineering will be presented. The role of information technologies as an enabler of process innovation will also be explored. The workshop will also cover techniques and tools that can be used to support the reengineering team including: static process modeling techniques (e.g., IDEF0), activity-based costing, process simulation tools, and group requirements elicitation tools (e.g., GroupSystems for Windows). How to integrate reengineering with Total Quality Management (TQM) will be suggested. Issues in implementing reengineering and change management in organizations are discussed. This seminar will teach you how to focus on your core business processes and dramatically improve it in order to compete in this global market. A group BPR project is required. Students will form team to work on a real-world BPR project that they identify and apply the skills that they have learn from this class.

Text Books:

1. James Martin, The Great Transition: Using Seven Disciplines of Enterprise Engineering to Align People, Technology, and Strategy, AMACOM, 1995. [JM]
2. "Reengineering the Organization: Transforming to Compete in the Information Economy" A Set of Harvard Business School's Case Studies and Readings Coursebook available from GMU Bookstore. [HBC]

Reference Books:

1. Hammer, Michael and Champy, James, Reengineering the Corporation: A Manifesto for Business Revolution, New York: HarperCollins Publishers, Inc., 1993. Paper back.
2. Hammer, Michael, Beyond Reengineering: How the Process-Centered Organization Is Changing Our Work and Our Lives, New York: HarperCollins Publishers, Inc., 1996.
3. Manganelli, R. L. and Klein, M. M., The Reengineering Handbook, New York: AMACOM, Stock Number 00236, September 1994. (1-800-262-9699-405)
4. Davenport, Thomas H., Process Innovation: Reengineering Work through Information Technology, Harvard Business School Press, 1993.
5. AT&T, Reengineering Handbook, AT&T Quality Steering Committee, Select Code 500-449, 1991. (1-800-432-6600)
6. Champy, James, Reengineering Management: The Mandate for New Leadership, New York: HarperCollins Publishers, Inc., 1995. 1-800-331-3761
7. Peter B. B. Turney, Common Cents: The ABC Performance Breakthrough, Cost Technology, 1-800-368-COST.

Course Outlines

• A soft and hard copy of presentation slide in PowerPoint (5 points)
• Post your PowerPoint Slides on the WWW (1 point)
• A 15~20 minutes presentation in class (5 points)

• Identify major events in the history of the firm
• Describe or develop visions for the company under study
• A case for action report
• Define the scope and scale for the BPR project
• Develop a high-level process map for the company
• Identify a critical process to be reengineered
• Recommend a suitable team structure for the project
• Results of culture audit

• Identify problems/opportunities/issues critical to the process.
• Use IDEF0 and Functional Flowchart to develop a AS-IS (existing) process model for the selected process.
• Identify the customers and customer's customer of the process.
• Identify all the moment of truth (MOT) contacts that the process may have with customers. Define the satisfiers (What make the customer happy) at these Moment Of Truths.
• Identify core subprocesses of the current process.
• Provide analysis of the current process models (current performance measure and data, bottleneck, cycle time vs. process time, activity-based costing, etc.)

• Describe the conceptual breakthrough or a new process vision in the new process redesign.
• Redesign and define the TO-BE process model(s).
• Evaluate alternative designs.
• Define the new process model using IDEF0 and Functional Flowchart.
• Describe how the new process may improve the MOT contacts with customers.
• Define the infrastructure requirements for your client in order to the new process. Describe possible change to:
• Organizational structure
• Job skills
• Reward systems
• Information technologies
• Culture, value, and beliefs
• Performance measures for the new process

• Conduct stakeholder analysis for the process change
• Identify the barriers for implementation changes
• Develop transition strategies
• Develop an implementation plan/schedule

1. Business Process Reengineering: Its Past, Present, and Possible Future [9-196-082]
2. Reengineering: Competitive Advantage and Strategic Jeopardy [9-196-019]
3. State Street Boston Corporation: Leading with Information Technology [9-195-135]
4. CIGNA Corporation, Inc.: Managing and Institutionalizing Business Reengineering [9-195-097]
5. Pacific Bell: Centrex Reengineering [195-098]
6. Reengineering a Business Process [396-054]
7. Order Management Reengineering at Heatway [996-005]
8. FMC: Corporation: Ground Systems Division [193-009]
9. Nokia Telecommunications Redesign of International Logistics [996-006]
10. Reengineering Work: Don't Automate, Obliterate [90406]
11. Digital Equipment Corporation: Complex Order Management [690-081]
12. The Internal Revenue Service: Automated Collection System [490-042]
13. Corporate Research Group in a High-Tech Firm: Improving Research Effectiveness [996-007]
14. Procter & Gamble: Improving Consumer Value Through Process Redesign [195-126]
15. ISSC Solution Center - Dallas: Transforming Software Development [996-008]
16. CIGNA Property and Casualty Reengineering (A) [196-059]
17. Managing Information: The IT Architecture [193-059]
18. Air Products and Chemicals, Inc.: IT Organization and Architecture Challenges [196-017]
19. Lotus Development Corporation in 1994 [794-114]
20. Xerox: Outsourcing Global Information Technology Resources [195-158]
21. Digital Equipment Corporation: The Internet Company (A) [996-009]
22. Digital Equipment Corporation: The Internet Company (B) [996-010]
23. J. C Penney: fashioning a Retailing Nervous System for the Future [996-011]
24. Rank Xerox U.K. (A) [192-071]
25. Rank Xerox U.K. (B) [192-072]
26. Reengineering Design Is Radical; Reengineering Change Is Not! [196-037]
27. Safeway Manufacturing Division: The Manufacturing Control System (MCS) (A) [193-134]
28. Safeway Manufacturing Division: The Manufacturing Control System (MCS) (B) [194-014]
29. Capital Holding Corporation - Reengineering the Direct Response Group [192-001]
30. KPMG Peat Marwick: The Shadow Partner [492-002]
31. The Process of Creative Destruction: Business Transformation [196-018]
32. Siemens Rolm Communications Inc.: Integrated Logistics Core Process Redesign (ILCPR) [195-214]
33. Mrs. Fields' Cookies [189-056]
34. VeriFone: The Transaction Automation Company (A) [195-088]