Business Process Re-engineering

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Information about Business Process Re-engineering
Business & Mgmt

Published on February 20, 2014

Author: jimwarner980



Introduction to Business Process Re-engineering. A practical guide to positive change. Jim Warner, managing partner at Monument Cloud Solutions, discusses the background and application of BPR using a simple framework.

Business Process Reengineering A Practical Guide to Positive Change

Agenda • • • • • Background Process Complexity A Practical Approach to BPR Applying BPR to Software Selection Q&A Business Process Reengineering 2

Background • Most organizations want to: – Improve efficiency – Improve customer service – Simplify operations – Reduce costs Business Process Reengineering 3

Background • Organizations often look to: – Computer systems and software – Additional staff Business Process Reengineering 4

Background • This often results in: – Greater challenges – Greater expense • Without meeting the original goals Business Process Reengineering 5

Background • The term ‘Business Process Reengineering’ was first coined in 1990 by Michael Hammer in the Harvard Business Review • The main idea is to eliminate work that doesn’t add value, rather than automate it • BPR provides a framework for development and deployment of information systems within the context of simplifying operations and reducing costs Business Process Reengineering 6

Background • My experience with BPR goes back a little further… • Hewlett Packard in the early 1980’s: – Driving a renaissance of quality & customer service – Yokagowa HP & W. Edwards Demming • Demming Prize – Tom Peters ‘In Search of Excellence’ – Total Quality Control (TQC) Business Process Reengineering 7

Background • HP’s Roseville Division – Extensive work with process & quality improvement – High mix – low volume manufacturing – Created a predecessor to BPR – Had the insight to compare the distance a product travels with the dimensions of the building Business Process Reengineering 8

Process Complexity Building Floor Plan Length Business Process Reengineering 9

Avoid Complex Processes • Dimensions of building compared to length of process • Number of stops, translations, workarounds • Time in transit • Number of places where information can be lost • Complex decision processes cause errors & rework Business Process Reengineering 10

Keep It Simple Building Floor Plan Length Business Process Reengineering 11

Re-engineering? • The name suggests that processes were ‘engineered’ in the first place • Sometimes true, but most likely not • Processes tend to grow and change over time in an organic fashion Business Process Reengineering 12

Process Growth & Change • Processes grow and change over time • Most are simple to begin with • Organizations start with ‘One thing’, then move on to ‘Two things’, ‘Three things’, etc. • Exception handling is added • Key knowledge becomes siloed in various parts of the organization • Key knowledge often leaves with turnover Business Process Reengineering 13

Simple Beginnings Building Floor Plan 1 Length Business Process Reengineering 14

Adding An Option Building Floor Plan 1 Length Business Process Reengineering 15

Broadening Your Offering Building Floor Plan 1 Length Business Process Reengineering 16

Adding Systems Building Floor Plan 1 2 Length Business Process Reengineering 17

Micro-Managing Building Floor Plan 1 2 Length Business Process Reengineering 18

Human Nature - Short Cuts & Workarounds Business Process Reengineering 19

Common Outcomes • • • • • • • Short cuts & workarounds are added Key knowledge is lost or is in-accessible No one knows the whole process Customer satisfaction goes down Employee satisfaction goes down Costs go up Process won’t scale Business Process Reengineering 20

What to Do? The Four Steps: • Understand • Document • Simplify • Automate Business Process Reengineering 21

Understand • Understand what is happening in your organization right now • Organizations often think they understand their processes, but can be surprised! • One department often doesn’t know what the others do • The Four Questions Business Process Reengineering 22

The Four Questions • Who are my customers? – External? – Internal? • What is my product or service? • What is my process for delivering my product or service? • How can I improve my product or service? Business Process Reengineering 23

What Should You Ask? • • • • How is the system being used? Where are the bottlenecks? Where are errors commonly made? What are the workarounds? – Spreadsheets? – Documents? – Notes/emails? • Where is data being reentered? Business Process Reengineering 24

Capture Ideas • • • • • Activities to start? Activities to stop? Activities to continue? What’s working? What’s not working? Business Process Reengineering 25

Questionnaire Business Process Reengineering 26

Document • Document what’s happening now • If we can’t document it, then we haven’t understood it • Highlights duplicate processes • Highlights gaps in knowledge • Helps create a shared understanding Business Process Reengineering 27

Diagrams & Documents Business Process Reengineering 28

Simplify • Identify processes that don’t add value • Simplify where possible • Eliminate duplication of effort Business Process Reengineering 29

Simplify Business Process Reengineering 30

Automate • Can be existing or new systems • Can eliminate manual processes to reduce time and errors • Don’t have humans do things a computer can • Keep/Make/Buy decisions • Software selection process Business Process Reengineering 31

Deployment Options Cloud/Vendor Hosted Client Hosted • Simplifies client infrastructure and management • Lower up-front costs • Higher up-time of the application • Data security, backup and restore is build in • Easier to manage access beyond the building’s boundaries • Requires good internet access • Traditional approach that most IT operations are comfortable with • Can create a more secure feeling – we own/control the data • Higher upfront costs • More infrastructure & management required • Can be lower up-time Business Process Reengineering 32

Process Improvement • • • • • • • Selecting an issue Brainstorming Prioritizing Cause-Effect Analysis Brainstorm Solutions Implement a Solution Monitor & Stabilize Business Process Reengineering 33

Process Improvement - Cycle Monitor & Stabilize or Change Approach Create an Issue / Opportunity List Prioritize Issues Implement Improvement Brainstorm Cause & Effect Brainstorm Solutions Business Process Reengineering 34

Brainstorm Issues • Generate as many ideas as possible in 20-30 minutes • Don’t debate or change ideas (quantity more important than quality) • Encourage everyone to participate – go around the room • Keep going until all the ideas have been presented Business Process Reengineering 35

Prioritizing Consider various aspects of each issue: • Importance/benefit of an improvement • Penalty • Cost • Time • Risk Business Process Reengineering 36

Prioritizing - Methods Goal is to find the most important issue • Gut feel – fastest but can be biased • Trial & error – make the list ‘look right’ • Priority groups – high, medium & low • Bubble sort – thorough & fairly simple • Prioritization matrix – most thorough – ranks issues according to criteria Business Process Reengineering 37

Bubble-Sort Prioritizing • Start at the bottom position • Compare the item on the bottom with each of those above • If the bottom item is a higher priority with it’s comparison item, swap them • Continue comparing the bottom item until you’ve compared all the way to the top • Move up to the second to the last item & repeat • Repeat until you’ve moved up to the top of the list Business Process Reengineering 38

Cause/Effect Analysis The 4 Categories (4 M’s) • Man • Machine • Materials • Methods Business Process Reengineering 39

Fish-Bone Diagram No training Turnover No integration No security Example: Data takes too long to move from shops to foundation In-box not clearly labeled Poor form layout Lost form Business Process Reengineering 40

Brainstorm Solutions • Same approach... • Prioritize… • Can start with low $ / low risk first Business Process Reengineering 41

Implement Solution • Pick an implementation team – Key stakeholders – The right disciplines • Can be phased • Remember the 4 M’s Business Process Reengineering 42

Monitor & Stabilize • Monitor key process measures – Time to complete something – Error rate – Time spent in re-work • Stabilize – Train & manage for consistent results – Understand out of bounds data – Implement minor corrections Business Process Reengineering 43

Applying BPR to Software Selection A Managed Approach

Why is it important? Early Influences • IT – Definition of system failure: – Not being used • Auto industry experience – Auto workers – if they don’t like it, it will break • Aviation industry experience – It must not break – Critical systems Business Process Reengineering 45

Software Satisfaction • Two choices: – Adapt your process to fit the software – Select/Configure/Customize the software to fit your process • If the process is core to your mission, the latter is much better Business Process Reengineering 46

Kano Model Business Process Reengineering 47

Methodology • Based on Business Process Reengineering • We recommend 6 steps: 1: 2: 3: 4: 5: 6: Preparation (Understand, Document, Simplify) Evaluation Selection Planning Implementation (Automate) Monitor, stabilize & enhance • Scalable to client needs Business Process Reengineering 48

Benefits • The BPR process raises the team awareness with what you’re looking for and why • Takes current technology into account • Reduces vendor bias • Reduces the chance of buying vaporware • Ensures the best software fit with your organization Business Process Reengineering 49

Step 1: Preparation • • • • • • • • • • • • • Select the project team & roles (those that will be involved in the selection process) Review your organization’s mission and objectives Interview the existing users and document the existing processes Interview the stakeholders beyond the system boundaries & document needs/concerns Identify integration points with other systems Identify gaps and workarounds such as spreadsheets, documents, emails, etc. Simplify or eliminate process steps where possible Conduct an IT review of the existing servers, network & workstations Evaluate the organizations IT plans for growth and new technology (Cloud, Mobile, BYOD, etc.) Evaluate deployment options (Client hosted, vendor hosted, SaaS) Develop the software business case (Optional) Develop a shared vision for the new system Develop preliminary budget Business Process Reengineering 50

Step 2: Evaluation • • • • • • • • • • • • • • • • Gather & prioritize requirements Create a Request for Proposal (RFP) document Create an initial list of potential vendors Define decision criteria Send out the RFP Initial review of RFP responses Schedule demos Check references Review customer support and service (vendor, reseller, consultant, ect) Review Implementation expertise Review vendor stability (financial, business plans, leadership team, customer base) Review vendor product/technology roadmap Review Total Cost of Ownership (TCO) Fit/Gap analysis Review 1 to 5 year budget for each vendor Trim the list of potential vendors Business Process Reengineering 51

Step 3: Selection • • • • • • • • • • • Inviting shortlisted vendors for a site visit Review further demos Evaluate implementation plans Identify the best-fit solution Audit the selection process Management approval Internal selection announcement Notify winning and losing vendors Legal review of contract Negotiate contract Initial data conversion strategy Business Process Reengineering 52

Step 4: Planning • • • • • • Refine implementation plan & develop milestones & schedule Review & negotiate any scope changes Review/Finalize data conversion strategy Review/Finalize implementation plan & schedule Develop training plan Plan for parallel operation of new & old systems Business Process Reengineering 53

Step 5: Implementation • • • • • • • • • Implementation kickoff Track progress vs. schedule & milestones Execute training plan Execute data conversion Verify integration with other systems Verify & signoff on new system Go-live on new system Ramp up users on new system Restrict access to old system Business Process Reengineering 54

Step 6: Monitor, Stabilize & Enhance • • • • • Review system acceptance (user feedback) Collect issues/change requests Report issues/change requests to vendor Conduct additional training Implement fixes/enhancements Business Process Reengineering 55

Questions & Answers ? Business Process Reengineering 56

Contact Info We’re happy to help you with any of your BPR needs! Monument Cloud Solutions LLC Business Process Reengineering 57

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