Purpose of this module:

1. Gain an understanding of what is meant by "business process".

2. Understand and contrast continuous process improvement and business process
reengineering (BPR.
!f you have ever waited in "ine at the grocery store# you can appreciate the need for process
improvement. !n this case# the "process" is ca""ed the chec$%out process# and the purpose of
the process is to pay for and bag your groceries. &he process begins with you stepping into
"ine# and ends with you receiving your receipt and "eaving the store. 'ou are the customer
(you have the money and you have come to buy food# and the store is the supp"ier.
&he process steps are the activities that you and the store personne" do to comp"ete the
transaction. !n this simp"e e(amp"e# we have described a business process. !magine other
business processes) ordering c"othes from mai" order companies# re*uesting new te"ephone
service from your te"ephone company# deve"oping new products# administering the socia"
security process# bui"ding a new home# etc.
Business processes are simp"y a set of activities that transform a set of inputs into a set of
outputs (goods or services for another person or process using peop"e and too"s. +e a"" do
them# and at one time or another p"ay the ro"e of customer or supp"ier.
'ou may see business processes pictured as a set of triang"es as shown be"ow. &he purpose
of this mode" is to define the supp"ier and process inputs# your process# and the customer and
associated outputs. ,"so shown is the feedbac$ "oop from customers.
So why business process improvement?
!mproving business processes is paramount for businesses to stay competitive in today-s
mar$etp"ace. .ver the "ast 1/ to 10 years companies have been forced to improve their
business processes because we# as customers# are demanding better and better products
and services. ,nd if we do not receive what we want from one supp"ier# we have many others
to choose from (hence the competitive issue for businesses. 1any companies began
business process improvement with a continuous improvement model. &his mode" attempts to
understand and measure the current process# and ma$e performance improvements
according"y.
&he figure be"ow i""ustrates the basic steps. 'ou begin by documenting what you do today#
estab"ish some way to measure the process based on what your customers want# do the
process# measure the resu"ts# and then identify improvement opportunities based on the data
you co""ected. 'ou then imp"ement process improvements# and measure the performance of
the new process. &his "oop repeats over and over again# and is ca""ed continuous process
improvement. 'ou might a"so hear it ca""ed business process improvement# functiona" process
improvement# etc.
&his method for improving business processes is effective to obtain gradua"# incrementa"
improvement. 2owever# over the "ast 1/ years severa" factors have acce"erated the need to
improve business processes. &he most obvious is techno"ogy. 3ew techno"ogies ("i$e the
!nternet are rapid"y bringing new capabi"ities to businesses# thereby raising the competitive
bar and the need to improve business processes dramatica""y.
,nother apparent trend is the opening of wor"d mar$ets and increased free trade. 4uch
changes bring more companies into the mar$etp"ace# and competing becomes harder and
harder. !n today-s mar$etp"ace# ma5or changes are re*uired to 5ust stay even. !t has become a
matter of surviva" for most companies.
,s a resu"t# companies have sought out methods for faster business process improvement.
1oreover# companies want brea$through performance changes# not 5ust incrementa"
changes# and they want it now. Because the rate of change has increased for everyone# few
businesses can afford a s"ow change process. .ne approach for rapid change and dramatic
improvement that has emerged is Business Process Reengineering (BPR.
Business Process Reengineering (BPR)
BPR re"ies on a different schoo" of thought than continuous process improvement. In the
extreme# reengineering assumes the current process is irre"evant % it doesn-t wor$# it-s bro$e#
forget it. 4tart over. 4uch a c"ean s"ate perspective enab"es the designers of business
processes to disassociate themse"ves from today-s process# and focus on a new process. !n a
manner of spea$ing# it is "i$e pro5ecting yourse"f into the future and as$ing yourse"f) what
shou"d the process "oo$ "i$e6 +hat do my customers want it to "oo$ "i$e6 +hat do other
emp"oyees want it to "oo$ "i$e6 2ow do best%in%c"ass companies do it6 +hat might we be ab"e
to do with new techno"ogy6
4uch an approach is pictured be"ow. !t begins with defining the scope and ob5ectives of your
reengineering pro5ect# then going through a "earning process (with your customers# your
emp"oyees# your competitors and non%competitors# and with new techno"ogy. Given this
$now"edge base# you can create a vision for the future and design new business processes.
Given the definition of the "to be" state# you can then create a p"an of action based on the gap
between your current processes# techno"ogies and structures# and where you want to go. !t is
then a matter of imp"ementing your so"ution.
!n summary# the e(treme contrast between continuous process improvement and business
process reengineering "ies in where you start (with today-s process# or with a c"ean s"ate# and
with the magnitude and rate of resu"ting changes.
.ver time many derivatives of radica"# brea$through improvement and continuous
improvement have emerged that attempt to address the difficu"ties of imp"ementing ma5or
change in corporations. !t is difficu"t to find a sing"e approach e(act"y matched to a particu"ar
company-s needs# and the cha""enge is to $now what method to use when# and how to pu"" it
off successfu""y such that bottom%"ine business resu"ts are achieved. 4uch are the topics for
this modu"e series.