Business Process Reengineering

An Organizational Makeover

Business Process Re-engineering

(1990s)
is also known as business process redesign,
business transformation, or business process
change management.
focuses on the analysis and design of
workflows and business processes within an
organization.

Business Process Reengineering

The fundamental rethinking and
radical redesign of business processes
to achieve dramatic improvements in
critical contemporary measures of
performance such as cost, quality,
service and speed.

A workflow is a sequence of operations, declared

as work of a person or group, an organization of
staff, or one or more simple or complex
mechanisms.
Business process is a set of logically related
tasks performed to achieve a defined business
outcome.

BPR aimed
improve customer service,
cut operational costs, and
become world-class competitors.

OBJECTIVES
Customer focus
Speed
Compression
Flexibility
Quality
Innovation
Productivity

METHODOLOGIES
Envision stage
Initiation stage
Diagnosis stage
Redesign stage
Reconstruction stage
Evaluation stage

Scope
BPR
Project

Learn
From
Others

Create
To-Be
Process
es

Plan
Transitio
n to Fill
Gaps

Impleme
nt Plan

Key Components of BPR

Redesign
Retool
Re-orchestrate

The 3 Rs of Reengineering

Examples of BPR

Ford

Ford Accounts Payable Process

Purchasing
Purchasing

Vendor
Vendor

Purchase order

Receiving
Receiving

Goods

Copy of
purchase
order

Accounts
Accounts
Payable
Payable

Receiving
document

Invoice

PO?
= Receiving Doc.?
= Invoice

Payment

Trigger for Fords AP

Reengineering
Mazda only uses 1/5 personnel to do the same
AP. (Ford: 500; Mazda: 5)
When goods arrive at the loading dock at
Mazda:
Bar-code reader is used to read delivery data.
Inventory data are updated.
Production schedules may be rescheduled if
necessary.
Send electronic payment to the supplier.

Ford Procurement Process

Purchasing
Purchasing

Vendor
Vendor

Purchase order

Receiving
Receiving

Goods

Purchase
order
Goods
received

Data base

Accounts
Accounts
Payable
Payable

Payment

Ford Accounts
Payable

Before
Before

After
After

More than 500 accounts

payable clerks matched
purchase order, receiving
documents, and invoices
and then issued payment.

Reengineer procurement
instead of AP process.
The new process cuts head
count in AP by 75%.
Invoices are eliminated.
Matching is computerized.
Accuracy is improved.

It was slow and

cumbersome.
Mismatches were
common.

Mutual Benefit Life

Insurance

New Life Insurance Policy Application Process at Mutual Benefits

Life Before Reengineering
Department A
Step 1

Department A
Step 2

Issuance
Application

Issuance
Policy

Department E
Step 19

30 steps, 5 departments, 19 persons

Issuance application processing cycle time:
24 hours minimum; average 22 days
only 17 minutes in actually processing the
application

....

The New Life Insurance Policy Application Process

Handled by Case Managers

Mainframe

Physician

Underwriter

Case Manager
PC
Workstation

LAN
Server

application processing cycle time:

4 hours minimum; 2-5 days
average

Application handling capacity

double

BPR SUCCESS AND FAILURE

FACTORS

BPR success & failure factors

BPR projects and efforts have revealed some interesting findings for both
academics and practitioners. Some BPR researchers have focused on key
factors in the BPR process that enabled a successful outcome. Many lessons
were learned and many elements were identified as essential to the success
of a BPR activity. Some important BPR success factors, which will be
discussed in further details later, include, but are not limited to the following:

BPR team composition.

Business needs analysis.

Adequate IT infrastructure.

Effective change management.

Ongoing continuous improvement

THANK YOU