Presentation by Prof. Sid Das
For EMBA
TABLE OF CONTENTS
Business process reengineering is the fundamental rethinking and radical
redesign of an entire "business system" the business processes,
jobs, organizational structures, management systems, and values and beliefs
to achieve dramatic improvements in critical measures of performance
Dramatic: Order of Magnitude breakthroughs
Radical: Using entirely new ways of working
Processes: See next page
A business process is a set of business activities that combine to produce a business result.
Business processes are a set of logically related tasks performed to achieve a defined business outcome.
The logical organization of people' materials, energy equipment, and procedures into work activities designed to produce a specified end result (work product).
A business process is a sequence of activities that creates something
of value for customers, be they internal or external.
Processes are generally independent of formal organizational structure,
they cross organizational boundaries.
Business processes are rarely reflected in organizational structures
and are seldom defined or described in the same way by those who participate
directly in them.
Most business processes were developed before modern computers and communications
even existed. When technology has been applied, it is usually to automate
or speed up isolated components of an existing process.
Redesign of entire processes should be undertaken with a specific business
vision and related objectives in mind.
Examples of Processes
Developing a new product;
Ordering goods from a supplier;
Creating a marketing plan;
Processing and paying an insurance claim; and
Writing a proposal for a government contract.
What Work?
Who Does the Work? Function ------ P -------Where is the work
performed?
R
C
O
C
E
S
S
How is the work performed?
The Practitioner's
Perspective: The Core of Business Reengineering
Three important Premises:
A business will have relatively few core business processes through
which it fulfills its business purpose Examples are:
Develop Business Vision and Process Objectives
Prioritize objectives and set stretch targets
Identify processes to be redesigned
Identify critical or bottleneck processes
Understand and Measure Existing Processes
- Identify current problems and set baseline
Identify IT Levers
Brainstorm new process approaches
Design and Build a Prototype of the Process
implement organization and technical aspects
Two Approaches:
The exhaustive approach attempts to identify all processes within
an organization and then prioritize them in order of redesign urgency.
For example: "Information engineering" in which an organization's
use of data dictates the processes to be redesigned.
The high impact approach attempts to identify only the
most important processes or those most in conflict with the business vision
and process objectives.
Can normally be identified using senior management workshops, or through
extensive interviewing.
High impact processes should have owners. In virtually all the
process redesigns studied, an important step was getting owners to buy
in to both the idea and the scope of process redesign at an early stage.
Classify each redesign process in terms of beginning and end points' interfaces, and organization "nits (functions or departments) involved, particularly including the customer unit.
Information Technology
The capabilities offered by computers, software applications, and telecommunications
IT plays a critical role in reengineering: it is the enabler of new
business processes. It allows US to move from task oriented specialists
to results oriented generalists.
Information technology should be viewed as more than an automating or
mechanizing force; it can fundamentally reshape the way business is clone.
Business activities should be viewed as more than a collection of individual
or even functional tasks; they should be broken down into processes that
can be designed for maximum effectiveness, in both manufacturing and service
environments.
Thinking about information technology should be in terms of how it supports
new or redesigned business processes rather than business functions or
other organizational entities. And business processes and process improvements
should be considered in terms of the capabilities information technology
can provide.
Individual tasks and jobs change faster than they can be redesigned. Today, responsibility for an outcome is more often spread over a group rather than assigned to an individual as in the past. Companies increasingly find it necessary to develop more flexible, team oriented, coordinative, and communication based work capability. In short, rather than maximizing the performance of particular individuals or business functions, companies must maximize interdependent activities within and across the entire organization.
| Capability | Organizational Impact / Benefits |
| Transactional | IT can transform unstructured processes into routinized transactions |
| Geographical | IT can transfer information with rapidity and easeacross large distances, making processes independent of geography |
| Automational | IT can replace or reduce human labor in a process |
| Analytical | IT can bring complex analytical method to bear on a process |
| Sequential | IT can enable change in the sequence of tasks in a process' often allowing multiple tasks to be worked on simultaneously |
| Knowledge Management | IT allows the capture and dissemination of knowledge and expertise to improve the process |
| Tracking | IT allows the detailed tracking of task status, input, and outputs |
| Disintermediation | IT can be used to connect two parties within a process that would otherwise communicate through an intermediary (internal or external) |
| Process Dimension and Type | Typical Example | Typical IT Role |
| Entities | ||
| Interorganizational | Order from supplier | Lower Transaction Costs Eliminate intermediaries |
| Interfunctional | Product Development | Work across geography Greater simultaneity |
| Interpersonal | Loan approval | Role and Task integration |
| Objects | ||
| Physical | Manufacture a product | Increased flexibility Process Control |
| Informational | Create a proposal | Routinizing Complex Decisions |
| Activities | ||
| Operational | Fill customer orders | Reduce time and costs Increase Output Quality |
| Managerial | Develop a Budget | Improve Analysis Increase Participation |
For a Successful Reengineering
Effort Remember the Following Rules
