52 Business Process Reengineering: Text and Cases Transforming the workforce will require an array of activities. It begins with an assessment of the current skills or capabilities of the workforce to include soft skills, operational skills, and technical skills. This inventory may require personal evaluations Gncluding areas of interest), peer evaluations, and supervisor evaluations. Feedback should be provided to all personnel to ensure accuracy of current skills and interests for all staff. With the help of an assessment of new process skill requirements and a current skills inventory, the gaps can be assessed. Is the new process feasible with the current skill eot? Which are the areas to focus on in order to enhance personnel ckills to moot the requirements of the new process? An educational curriculum needs to be established. to get all employees educated on the business and, most importantly, on how their jobs relate to the customer. ‘An cducational pyramid is an effective way to transfer knowledge of team building, self-mastery, and subject-matter knowledge. Systems training is essential for understanding the use of new information systems and how to take advantage of their capabilities. Process training may be needed to help employees think beyond a linear process to a more holistic interdependent proceso. Facilitation training for management is critical to develop their abilities to listen, allow mistakes, handle disputes among process experts, and transit to a couch facilitator role. Bducation may be movessary for ‘Total Quality Management (TQM), Statistical Process Control (SPC), or Continuous Process Luproveament (CPD, if diese aechanioms are desigued inl Uie new processes. Finally, a structured on-the-job training (OJT) programme is instrumental in providing continuity of the new process during periods of personnel turnover or attrition, ‘As in the case of any other dramatic change, people will have personal difficulties, lo varying degrees, with the paradigm shif. Uat has taken place. Almost all new process implementations are surrounded by confusion, frustration, and sometimes panic. The best transition strategy is one that minimizes, as much as possible, the interference caused to the overall environment. Attempts should be made to keep the new process chaos to a controlled level, to maintain the focus of the reengineering team, and the faith of the employees. ‘Transforming information systems to support the new process may involve retooling the hardware, software, and information needs for the new process. One approach to this transition could be a controlled introduction, The method would ensure that each part of the system is operational for a segment of the business before going on to the ‘next module to implement. Although the risk may be low whule the bugs in the new system are ironed out, it may be difficult to integrate the hybrid old or new systems in a stepwise manner. ‘The flash cut approach is where the entire system is developed in parallel to the existing system, and a complete transition occurs all at once. This may put the organization at a higher risk if the systems do not function properly at first, but it is the more common approach due to the “all-or-nothing” nature of BPR. Most reengineered processes function in an entirely different manner from existing processes; thus, a stopwise introduction would, most likely, not be fully functional until all steps were introduced anyway. An important reason to justify the flash cut approach is that the reengineering benefits can be realized much sooner than with a controlled introduction. Transitioning the information used to support the old process to become useful in the new process involves reducing some requirements while expanding others. Usually 30 to 40 percent of the old information ean be discarded, because it was administrative data needed to tie the old disjointed, linear processes together. On the other hand, theBPR Implementation Methodology 58 old systems may have poor data integrity, incorrect data, or insufficient data to support tho now businoss needs In these cases the data must ho expanded ta fil the gaps in the existing data and supply the new information requirements of the reengineered process, ‘The information blueprints help manage the development of the new information systems. DIFFERENT BUSINESS PROCESS REENGINEERING METHODOLOGIES Based on the studies of Business Process Reengineering, the following four representative methodologies from the academic, consulting and user fields have been developed: Source ‘Methodology Consultants (with academic Hammer/Champy background) ‘Academies Davenport Consultants Manganelli and Klein Users Kodak Hammer/Champy Methodology Hammer and Champy popularized Business Process Reengineering methodology. Hammer, an M.LT. professor-turned a consultant, and Champy, president of the world-wide consulting company CSC Index, defined Business Reengineering as a fundamental rethinking and radical redesign of mission-critical business processes. Hammer and Champy saw poor management and unclear objectives as the main problems in Business Process Reengineering success. Only just recently did they acknowledge people's resistance as a major obstacle to Business Process Reengineering’s successful implementation. Their Business Process Reengineering methodology, which was fine-tuned by Champy's consulting company, can be divided into six steps as shown in Table 5.1. Table 5.1. Tho Hammer/Champy methodology ‘Sn Prnject steps Octo 1. | Introduction into Business The CEO initiates the project. He describes brielly and Process Reengineering Pragmaticaly the current business situation to start actions, 2. | Identification of business This step looks at the broad picture, of how processes interact processes within the company and in relation to the outside world. one dolverable is a graphical display ofall processes, 3. | Selection of business processes | This step serves to select such processes, which are re- engineered. This wil lead to high value for the company's customers. Also processes, that lend themselves to easy reengineering are being selected, 4. | Understanding the selected | This step does not dwell on a detailed analysis of tho business processes functioning ofthe selected business processes, rather con- Ccentrates on the performance of the current processes as ‘opposed to what ie expected from them in the future. 5. | Redesign of the selected This step is, according to Hammer and Champy, the most business processes creative of all. tis characterized by imagination, lateral thinking and some sor of craziness, (Cont)54 Business Process Reengineering: Text and Cases Table 5.1 The Hammer/Champy methodology (Cont) S.No. Project steps: Objectives ©. | implementation of redesigned | This step covers the implementation phase of the Business business processes Process Reengineering project. Hammor and Champy did not talk about implementation as much as about project planning, ‘They believed in the success of the implementation, once the five preliminary steps have been properly performed. Davenport Methodology Davenport puts Information Technology at the heart of Business Process Reengineering, For Davenport, Information Techolugy plays Whe suvst important rule in imuvvalings business processes. Davenport sees culture as a constraint when there is a poor process imnovation to culture fit. With regard w managing the change, Davenport enphasizes traditional management functions like planning, directing, monitoring, decision making and communicating. Davenport is convinced that Business Process Reengineering should better integrate with the other non-revolutionary (incremental) process approaches like Total Quality Management. His methodology covers 6 steps (see Table 5.2). Table 5.2 Davenport methodology ‘BNO. Project stops Objectives Ai | Visioning and goal setting This step is needed to focus all subsequent actions on company visions and process goals. Cost reduction considered an important goal, yet Davenport wars against concentrating too much on cost-cutting, because other goals such as worker satisfaction, reduction of time requirements, and improvement of process performance, might be di criminated against 2. | Identification of business This steo identifies the business orocesses which should be processes reengineered. Davenport advises Business Reengineering teams to concentrate on a few important (not more than 18) core processes. 3. | Understanding and measurement | This step studies the exact functioning and performance of ‘ot processes tie selected business processes. Thisulfereivates Davenpuit {rom the Hammer and Champy approach. Davenport in particularwante to make eure that during the process redecign ‘ld practices are not “reinvented and performance bench- ‘marks forthe redesigned processes are set up. 4. | Information technology Ths step serves to study the applicability of Information ‘Technology tools and applications for the newly designed work processes. 5. | Process prototype This step covers the design of a functioning prototype of the now business process. People in ie company study this prototype, develop ideas for enhancements and make them- selves comfortable withthe redesign af their work processes. 7. | Implementation ‘The last step serves to implement the tested prototype on a ‘companywide basis. Davenport considers this step crucial to the success of the overall effort, since implementation takes roughly tice as ong (minimum one year) asthe foregoing steps,BPR Implementation Methodology 55 Manganelli/Klein Methodology ‘Manganelli and Klein ask the organizations to concentrate only on those business esses that directly support the strategic goals of the company and the customer requirements, Product development (a knowledge process) is such a preferred business process. He see organizational impact, timo, risk, and cost as obstacles to success, They Claim that business reengineering is more successful than incremental change initiatives which tend to fail more often. ‘The Manganelli/Klein Business Reengineering methodology is divided into five steps (see Table 5.3). Table 5.3 Manageneli/Klein methodology [sno. Project steps Objectives 1, | Proparation “Thie top acke all diroctly invelvod poreane to define goals and ta prepare for the Business Process Reengineering project. 2. | Identtication ‘This step defines a customer-oriented process model of the ‘organisation, as wall as select key business processes, for redesign. 3. | Vision ‘This step serves to define at which performance level the processes ‘currently delivers, and which higher levels required forthe future. 4, | Re-Design: This step breaks into two parallel sub-steps:() Technical Design, () Technical design which deais with information Technology Design to suppor the (i) Social design ‘new processes. (i) Social Design, which serves to design new work environments forthe people, including organizational and personnel development plans. 5. | Transformation This stop is meant to imploment the redesigned procossos ‘and work environments within the organization, Kodak Methodology The international Kodak organization developed a Business Process Reengineering methodology that is being applied to Kodak facilities around the world. Similar to other practitioner approaches, the Kodak methodology has been influenced by Hammer/ Champy. The Kodak methodology is divided into 5 steps (see Table 5.4). Table 5.4 Kodak methodology ‘S.No, Project steps Objectives 1. | Project initiation This step is considered key. It covers project planning and definition of all project administration rules and procedures, “This ston cote the peojart taam up, dasigne a eamnrahansive process model for the organization, and assigns process ‘managers who willbe responsible for the redesigned process after implementation, 3. | New process design ‘Ths stop covers the redosign of selected business processes, taking into account the potential of Information Technology. ‘Ths step ends with the planning of a Pilot Implementation of the redesigned processes, 2. | Process understanding (Cont)56 Business Process Reengineering: Text and Cases Table 5.4 Kodak methodology (Cont) ‘S.No. Project steps Objectives 4. | Business transition ‘his Step Is focused towaras tne implementation of he newly designed processes within the organization. A part ofthis ‘step is the adaptation ofthe organization's infraetructure to the requirements ofthe newly designed processes. | 5. | Change management ‘Thi atopic porformad paraliolto theft four steps. The project team handles barriers which crop up during the course of the Bucinose Pracose Reonginearing nrajact COMPARISON OF VARIOUS BUSINESS PROCESS REENGINEERING METHODOLOGIES. ‘The four representative methodologies assume that Business Process Reengineering projects are being initiated by top management and carried out by specially formed project teams. Business Process Reengineering projects are typically not considered collaborative efforts, but rather top-down power-driven projects. Table 5.5 Comparison of select business process reengineering methodologies ‘Siop 7 ‘Gio E top 2 |__ Project preparation _| Redesign of processes Implementation Hammer/Champy 4. Introduction 4. Understanding 6. Implementation (Consuitants/Academics)| 2. Identification 5. Redesign 3. Selection | Davenport 1. Visloning and goa | 8. Understanding and | 5. Prototyping (Academic) setting measurement 6. Implementation 2. Identification 4. Information technology ManganelliKiein 1. Proparation | 8. Process vision 65, Transformation {Consunants) 2. teenncavon 4. () Tevinival desig (6) Social design ‘Kodak 1, Project ination | 2, Understanding 4, Business transition (sers) 5, Change management| 3. New process. 5, Change management ‘The comparison of the four selected methodologies shows many similarities. First, the overall approach of Business Reengincering projects is of a linear nature. Further, Business Reengineering projects take a route similar to Information Technology implementation projects. Within the three consecutive steps, the individual approaches differ in the scope of project preparation. Davenport asks for complete preparation including Visioning, whereas the other methodologies cutrast by auds-uu approaches right from the project start. Davenport, Manganelli/Klein and Kodak also address the people side of Business Process Reengineering, but only as far as implementation issues are concerned. Taking the conclusion further and applying it to the sourees of existing methodologies, consultants appear to see Business Process Keengineering as yet another systematic and marketable approach for fast and cost-efficient implementation of planned change.BPR Implementation Methodology 87 CONSOLIDATED BPR IMPLEMENTATION METHODOLOGY With an understanding of the basics of BPR, flve methodologies are sunuuatized ist Table 5.6. A few BPR methodologies from contemporary literature are given in this table. Table 5.6 BPR methodologies Aste iaiology 1 ‘Matedeogy 2 7 | wlan von and sai orem cure eautxnte end pone torte pores 2 | cast dosed outro Nap ard meaoure the enising proces 3. | megete and improve enterprise pelyze end modty ening process Bb] eel acing toe Taal seeped 5 4 Laird ie wma por [aay iMeoaoogy 3 waenodoeay # Metodotay 5 1. | Setarecton Motvaing eecgneeing | Preparation | Bana eet slate regneetag ientteaton 3 | Clecto te vison Munny mangnasey Vion 4. | tminen prbemsobieg projects | Seting up for ronghooing | Technical end veer 5 | Deen mroverents fate dascipton and enabaie | Transtormaten € | Implement hange Tobe desi and valdaton 7. | embed coninvous improvement | inplmeriaton ‘A consolidated methodology has been developed from the five methodologies presented and developed to provide a structured approach and to facilitate underetanding. Thie ie shown in Figure 5.4. Propare for BPR “6 Bulle coss- functional team (© genuty customer dtven objacives '¢ Develop strategic purpose ‘improve ccontinuousty reengineered Processes |» inate ongoing ote pi measurement mmontaton pion | « Review per Prototype and | formance against Simulate version} target plans «+ improve prooeds Intateraning | coninuovsly prorames Implement ‘vansiton Figure 5.4 Consolidated BPR implementation methodology. Activity 1: Preparing for Reengineering “If you fail to plan, you plan to fail”. Planning and preparation are vital factors for any activity or event to be successful, and reengineering is no exception. Before attempting58 Business Process Reengineering: Text and Cases reengineering, the question ‘Is BPR necessary” should be asked. There should be a significant need for the process to be reengineered. The justification of this need marks the beginning of the preparation activity. This activity begins with the development of executive consensus, on the importance of reengineering and the link between breakthrough business goals and reengineering projects. A mandate for change is produced, and a cross-functional team is established with a plan for the process of reengineering. While forming the cross-functional team, stops should he taken to ensure that tho organization continues to function in the abeence of several key players. As typical BPR projects involve cross-functional cooperation and significant changes to the status quo, the planning for organizational changes is difficult to conduct without strategic direction from the top. The impact of the environmental changes, that serve as the impetus for the reengineering effort, must also be considered in establishing guidelines for the reengineering project. Another important factor to be considered, while eolablishing the strategic goals for the reengineering effort, is to make it first priority to understand the expectations of the customers as well as where the existing process falls short of meeting those requirements. Having identified the customer- driven objectives, the mission or vision statement is formulated. The vision is what a company believes it wants to achieve when it is done, and a well-defined vision will sustain a company’s resolve through stress on the reengineering process Activity 2; Mapping and Analyzing As-Is Process Before the reengineering team ean proceed to redesign the process, they should understand the existing process. Although some BPR proponents (in particular Hammer and Champy) argue against analyzing the current enterprise, saying that it inhibits the ‘ereative process, that might not alwayo hold true. It varice from case to case. While some organizations which are in dire straits might go the Hammer and Champy way (that is, attempt a new process design while totally ignoring the existing processes), most organizations need to map the existing processes first, analyze, and improve on it to design new processes, The important aspect of BPR is that the improvement should provide dramatic results. Many people do not understand the value of an As-Is analysis aud rather prefer Wy speud # larger chunk of their valuable Gime um desiguing dhe To-Be model directly. A large manufacturer spent six million dollars over a period of one year in a bid to develop a parts tracking system and was all set to go online. Only then did he realize that he had totally overlooked a small piece of information—the mode of transmission of information between the scheduling staff and the shop floor was a phone call. Just because this small yet vital information had not been documented, all his efforts added up to nought and the whole system that he had so painstakingly developed had to be scrapped. He had recognized the need for an As-Is analysis way too late. The main objective of this phase is to identify disconnects (anything that prevents the process from achieving desired results and in particular information transfer between organizations or people) and value-adding processes. This is initiated by first creating and documenting Activity and Process models, making use of the various modelling methods available. Then the amount of time that each activity takes and the cost that each activity requires in terms of resources is calculated through simulation and activity based costing (ABC). When the groundwork required has been completed, the processes that need to be reengineered are identified.EPR Implementation Methodology 59 Activity Design To-Be Process ‘The objective of this phase is to produce one or more alternatives to the current situation, which satisfy the strategic goals of the enterprise. The first step in this phase is benchmarking. “Benchmarking is the comparing of both the performance of the ‘organization's processes and the way those processes are conducted with those relevant peer organizations to obtain ideas for improvement.” The peer organizations need not be ‘competitors or even from the same industry. Innovative practices can be adopted from anywhere, no matter what their source is. Having identified the potential improvements to the existing processes, the development of the To-Be models is done using the various ‘modelling methods available, bearing in mind the principles of process design. Then, just like in the case ofthe As-Is model, we perform simulation and ABC to analyze factors like time and cost involved. It should be noted that this activity is an iterative process and cannot be done overnight. The several 'To-Be models that are finally arrived at are validated. By performing Trade-off Analysis, the best possible To-Be scenarios are selected for implementation. Activity 4: Implement Reengineered Process ‘The implementation stage is where reengineering efforts meet the most resistance and hence it is by far the most difficult one. If we expect that the environment would be conducive to the reengineering effort, we are sadly mistaken. The question that confronts us would be: “If BPR promises such breathtaking results, then why wasn’t it adopted much earlier?” We could expect to face all kinds of opposition—from blatantly hostile ‘antagonists to passive adversaries—all of them determined to kill the effort. When so much time and effort is spent on analyzing the current processes, redesigning them and planning the migration, it would indeed be prudent to run & cullure change programme simultaneously with all the planning and preparation. This would enable the organization to undergo a much more facile transition. But whatever may be the juncture in time that the culture change programme may be initiated, it should be rooted in our minds that winning the hearts and minds of everyone involved in the BPR effort is most vital for the success of the effort. Once this has been done, the next step is to develop a transition plan from the As-Is to the redesigned process. This plan must align the organizational structure, information systems, and the business policies and procedures with the redesigned processes. Rapid implementation of the information system required to support a reengineered business process is crucial for the success of the BPR project. Additional requirements for the construction of the To-Be components can be added and the result organized into a Work Breakdown Structure (WBS). Recent developments in BPR software technologies enable automatic migration of these WBS activity/relationships into a process modeling environment. The benefit here is that we can now define the causal and time sequential relationships between the activities planned.” Using prototyping and simulation techniques, the transition plan is validated, and its pilot versions are designed and demonstrated. Training programmes for the workers are initiated and the plan is executed in full scale.G0 Business Process Reengineering: Text and Cases Activity 5: Improve Process Continuously ‘A process cannot be reengineered overnight. A vital part in the success of every reengineering effort lies in improving the reengineered process continuously. The first step in this activity is monitoring. Two things have to be monitored—the progress of action and the results. The progress of action is measured by seeing how much more informed the people feel, how much more commitment the management shows, and how well the change teams are accepted in the broader perspective of the organization. This can be achieved by conducting attitude surveys and discrete ‘fireside chats’ with those initially not directly involved with the change. As for monitoring the results, the monitoring should include such measures as employee attitudes, customer perceptions, supplier responsiveness, ete. Communication is reinforced throughout the organization, ‘ongoing measurement is initiated, team reviewing of performance against clearly defined targets is carried out, and a feedback loop is set up wherein the process is remapped, reanalyzed and redesigned. Thereby, continuous improvement of performance is ensured through a performance tracking system and the application of problem solving skills. Continuous improvement (TQM) and BPR have always been considered mutually ‘exclusive to cach other. But on tho contrary, if performed simultancouely, thoy would complement each other wonderfully well. In fact, TQM can be used as a tool to handle the various problems cneountered during the BPR cffort and to continuously improve the process. In corporations that have not adopted the TQM culture as yet, application of TQM to the newly designed processes should be undertaken as a part of the reengineering effort. STEPS OF PROCESS REENGINEERING Figure 5.5 shows the flowchart for process reengineering. The steps involved in the process have been shown in Table 5.7. ORGANIZATIONAL REDESIGN USING BPR BPR is intended not to preserve the status quo, but to fundamentally and radically change what 1s done; it is dynamic. ‘Therefore, it is essential for a BPR effort to focus on outcomes rather than tasks, and the required outcome determines the scope of the BPR exercise. It has been highlighted by researchers how focusing on results rather than just nearby concentrating on activitios makes the difference between success and failure in change programmes. ‘The measures used. however. are crucial. At every level of reengineering. a focus on outcome gives direction and measurability—whether it be cost reduction, head count reduction, increase in efficiency, customer focus, identification of core processes and non-value-adding components, or strategic alignment of business processes. Renchmarking is a powerful tool for BPR and is the trigger for many BPR projects, a8 in Ford's accounts payable process.BPR Implementation Methodology 61 gage ienememes Y tau aa eau Sooners 1 mrsrmen - ee—| renece } ed t falimmaod baa ents ’ Implement the reengineered process. Footbck noua 63. Rowena for pioess eigeatrg Totso 5:7 Sips of proces reengnesing She Biepe ‘ates ‘State a case for process reangineering Establish process objectives Identity process for reengineering ‘The need for change should be identified and effectively com- ‘municated throughout the organization to all employees. This Is achieved primary through educational campaigns such as, ‘workshops. Communication with employees 1s a necessity. ‘The objectives for reengineering must be clearly stated to all ‘employees. The objectives should include goals for cost and time reduction, increased quality and increased customer satisfaction levels, Objectves can be used to measure progress, {Al principal processes in an organization should be initially Inentitied Hawevar, not all prinsinal prorasses should he reengineered at the same time. The current performance of each process should be questioned before selecting those processes to be reengineered. Typical questions may inciude: ‘Which processes are the most problematic? Which processes are likely tobe redesigned? What costs are involved? What is the commitment fram the workforce? Is the process antiquated fris the technolegy used outdated? Rasponsas tn these {questions could be weighed in accordance with organization and employee needs. (Cont)62 Business Process Reengineering: Text and Cases Table 5.7 Steps of process reengineering (Cont) ‘S.No. ‘Stops ‘Activities 4. | Understand and measure warrant] itis necessary that the current process is diagnosed and fully process Understood, Performance parameters for the existing process fare raquired. These could be primarily obtained from the ‘organization's quality system, 5. | Identity and evaluate enablers | Information Technology (IT). organizationel, human resources ‘and TQM act as enablers of process reengineering. The enablers required need to be identified and evaluated. Enablers constraints and addtional requirements, ie. new skills training, etc. should be identified. «6. | Create and design new process | Process reengineering requires the existing process to be ‘abolished. Apply the principles of process reenginosring to Coeate und design a new process. Use tools and techniques: ‘such as simulation to create and design the process. 1. | Test new process “The newly Uesiyiied proves should be tested before itis Implemented. Estimated benchmarks should be established. ‘The process should be viewed as.a prototype with successive iterations expected. The use of simulation is ertical for testing the new process. 8. | Implement reengineered process| Management should be constantly involved and seen to support the reengineering exercise. Commitment throughout the organization is needed. Employees need to be supported, ‘encouraged, and praised for their fforts. This could be Undertaken by traning employees. in additonal skils ang establishing work groups. A post-implementation assessment {is requlted. The process implemented should be bench ‘marked and compared against the old process. Reengineering may ho requieed again hatara tha peoneee chews any drastic improvement. People need to be equipped to assess, reengineer, and support—with the appropriate technology—the kev processes that contribute to customer satisfaction and corporate objectives. Therefore, BPR efforts can involve substantial investment, but they also require considerable top management support and commitment. Critical to the success of the redesign is the make-up of the reengineering team. Most authors suggest that the team should comprise the following: @ Senior manager as sponsor 1G Steering committee of senior managers to overoce overall reengineering otratogy Process owner Q Team leader @ Redesign team But the research has revealed that executive improvement teams and process improvement teams are a better choice than the steering committees and reengineering teams. Champions (team leaders) and ezars (sponsors) were also referred to; as per the scope of the reengineering effort, the sponsor, process owner, and leader may be one or mare people. The process owner is someone who is given the responsibility for the overall reengineering of a specific process.BPR Implementation Methodology 68 IMPACT OF BPR ON ORGANIZATIONAL PERFORMANCE ‘the two cornerstones of any organization are the people and the processes. If individuals are motivated and working hard, yet the business processes are cumbersome and non- essential activities remain, organizational performance will be poor. Business Process Reengincering is the key to transforming how people work. What appear to be minor ‘changes in processes can have dramatic effects on cash flow, service delivery, and ‘customer satisfaction. Even the act of documenting business processes alone will typically improve organizational efficiency by 10 percent, PERFORMANCE MEASURES OF BPR ‘The performance measures of BPR are as follows: @ Sales © Profit and loss @ Inventory levels 0 Market share ‘These measures have been shown in Figure 5.6. Reenginoeredprocase Technical procoss Normal nancial ‘naoaoremerte parameters Spee Mapp. Prot * Accuracy © Maree share '® Cycle-time reduction '» Retum on investment Figure 5.6 BPR performance measures. BUSINESS PROCESS REENGINEERING PROJECT MANAGEMENT ‘One way to classify Business Reengineering projects is on the basis of their organizational scope, which can be either narrow or broad. Another way is to classify by objective. ‘Table 5.8 combines both views; matrix rows describe the organizational view, while columns describe the objective view. Most business process reengineering projects fall into the following categories: (@) Intra-functional: best-in-class and break-point. (b) Inter-functional: process improvement and best-in-class (©) Inter-organizational: process improvement and best-in-class of some project managers for gai is questionable whether the small-scope project of intra-functional process improvement type can be classified as a Business Process Reengineering project at all. The high failureG4 Business Process Reengineering: Text and Cases Table 5.8 Classification of business process reengineering projects, Project ype Process improvement | Achieving bestin-class Break-point Cost reduction ‘competitive parity Rewsiting the rules Iniva-tunctional Instance Instance Instance Projects are aimed at | Eliminating costly papor| Reenginecring tho _| Using a digital voico single and isolated | work by introducing an | sourcing process to | recording system to tasks, actviies, or a | e-mail system for ‘ensure that the lowest | streamline the acqui- single function. internal communication. | cost suppliers arw being] siton proves, and to solected. limprove communications. Intra-tunctional Instance Instance Instance Projects targot cross- | Creating a simplified, | Introducing self-directed | A bank dissolving al its functonal business | one-page form for loan | work teams to the order| existing branches and processes, but are ppications for those | management process in| introducing an extremely Contained within customers, seeking up to| a manufacturing user-friendly direct business unt Fs, 7,00,000. company. ‘baniang system on the Internet Intor-organizational Instance Instance Instance Projects bridge between | Linking up with one | Reengineering the | A manufacturing ‘wo oF more business | particular vendor for | delvery process between| company extrenalizing units, such as the cost saving purposes | a machine manufacturer | all employees, excopt a company and its in product design and | and all its automotive | small specialized staff. customers and suppliers.| parts delivery (single | parts suppliers (ust-in- | Former employoes ‘source concept). time processes). turing into entre prenours and forming a network of suppliers together with other vendors rate of Business Reengineering efforts is primarily due to the fact that many programmes are poorly conceived and executed, focusing tactically on small-scale functional makeovers and not really well-integrated. They maintain that Business Reengineering can achieve the potential success only if it is deployed strategically and linked to business goals. ‘There is a large number of project management methodologies available for Business Reengineering. Some are of a theoretical nature, while others are of practical nature. Manganelli and Klein list and compare eleven important Business Reengineering project, management approaches. Hess and Brecht, published a comprehensive study of fifteen Business Reengineering methodologies. They concentrated on the Information Technology elements of Business Reengineering, They concluded that next to Information Technology, teamwork can be considered key to most methodologies. They also concluded that there is no generally aceepted method of analyzing and defining business processes. REENGINEERING RECOMMENDATIONS ‘The following recommendations made by various experts should be kept in mind: Q BPR must be accompanied by strategic planning, which addresses the leveraging of IT as a competitive tool.BPR Implementation Methedology 65 1 Place the customer at the centre of the reengineering effort—concentrate on reengineering fragmented processes that lead to delays or other negative impacts ‘on customer service. a BPR must be “owned” throughout the organization, not driven by a group of outside consultants. @ Case teams must comprise both managers as well as those who will actually do the work. a The IT group should be an integral part of the reengineering team from the initial stages. @ BPR must be sponsored by top executives, who are not about to leave or retire soon. a BPR projects must have a timetable, ideally between three to six months, so that the organization is not in a state of “limbo. a BPR must not overlook corporate culture and must emphasize constant ‘communication and feedback. THREADS OF BPR IN VARIOUS PHASES Business process re-engineering activities occur primarily within the requirements, definition and design phases of an ERP implementation effort, However, BPR should be given consideration first in the Initiation phase and carried through the entire life eyele of the project. This ‘thread’ is depieted in Figure 5.7. Sustainment and continuous Initiation ‘Acquisition Implementation Improvement sucess Integration ree Canis ‘servcas races maa RFP ReOaY, improvernent Exooute a get REP apr o requirement rmathodotogy Incorporete nto eosign task order Bile task order to spectications OTRICE onjects Figure 5.7 Business process reengineering thread. REP: Request for ProposalG6 Business Process Reengineering: Text ond Cases Initiation ‘One of the key reasons for implementing an ERP project is to run the business in a more efficient, effective and flexible manner. Therefore your ‘tn-he’ husiness processes will have to be efficient, effective and flexible, To this end, BPR must be part of the overall visiuu ur sategy for undertaking an ERD project, and ehould bo stated as such in the business case, Subsequently, your acquisition strategy must include finding a solution and a systems integrator who has the requisite skills and methodology to meet this vision. Acquisition ‘The solicitation of systems integration services must specifically include a request for information about the vendor's BPR methodology, including approach, tools and templates, deliverables, and roles and responsibilities. The task of executing the BPR methodology then Deculues pas uf the requirements and design contract taok erdor, The results of the BPR effort, the number of development objects required, and the costs to develop the objects, become fixed in subsequent task orders. Implementation BPR is executed during the requirements and design phases of implementation. Also, it is at the beginning of design when the data repository must be utilized to leverage work already done. Sustainment and Continuous Improvement Tiocess improvement is not a one time oxorcise. Responding ta custamors’ nerds, improved interaction with vendors, and making processes more efficient and effective should be an ongoing process. Even though a process has been radically redesigned, this does not mean that the process does not have to be validated and continuously improved. REVIEW QUESTIONS Short Questions 1, Explain the reason for implementation of BPR. 2. Define BPR methodology. 8. What are the characteristics of BPR teams? 4. List some key concepts of BPR. 5. Describe the -step approach to BPR. 6. What are the 6 design principles for successful reengineering design? 7. What are the roles played by people in reengineering? 8. What are the common steps to perform BPR implementation? 9. List the activities involved in beginning organizational change. 10. Name some activities related to performing the transformation. 11, Compare the various Businese Prosess Reengineering methodologies.BPR Implementation Methodology 67 12, What is the impact of BPR on organizational performance? 13. List some performance measures of BPR. 14. Write a few Reengineering recommendations. Essay Type Questions 1. Discuss different phases of BPR briefly. 2. Explain BPR model with a drawing. 3. Discuss in detail the BPR methodology selection guidelines. 4. Explain briefly about implementation of Business Process Reengineering. 5. Explain briefly about identifying BPR opportunities. 6. How do you understand the existing process? Explain. 7. What are the activities involved in reengineering the process? Discuss in detail. 8. Explain various types of Business Process Reengineering methodology. 9. What are all the activities involved in BPR implementation technology? Explain. 10. Draw a flowchart for process reengineering and explain. 11. Discuss briefly about Request for Proposal (REP).