BPR 02 Principles

Business Process Re-engineering02 – Principles & Dimensions

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Dimensions & Characteristics

Fundamental changes to process, technology andhuman factors to achieve dramatic improvementsin key measures

The dimensions & characteristics:

• Balanced attention to processes, people andtechnology

• Cross functional, process based perspective • Judged by measurable results achieved

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Process: The Basic Concept

• What is a process?- “a collection of business activities that creates value for a customer- a transformation of inputs(s) into output(s): a state of change

• Re-engineer processes, not functions or organisations• Some typical processes:

- concept to prototype : develop product- target to customer order : acquire customer- customer order to pay : fulfill order- purchase request to payment : procure materials- enquiry to resolution : service

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Process viewpoint

• Identification and mapping- identify, name and relate the processes to each other

• Ownership- assigning owners for all processes

• Measurement- establishing and communicating end-to-end customer driven process measures and measurement mechanisms

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Process viewpoint

• Management- evaluate process performance against customer needs and competitive benchmarks

• Awareness- creating appreciation of the organisation’s processes and customers- develop a process-oriented mindset

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The Business operation

Business Processes

Values and Beliefs

Management andMeasurement

Systems

Jobs and Structure

deter

mine

require

enable

foster

The business operation diamond

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The Impact of BPRThe business operation diamond in context

Business Processes

Values and Beliefs

Management andMeasurement

Systems

Jobs and Structure INFRASTRUCTURE

Customer needsCompetitor actions Technological and

environmental factors

Assessment ofcapabilities

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Elements of BPR

• Process focus • Radical change• Dramatic improvement

BPR is about competitiveness.

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Process Focus

• A set of linked activities that adds value to the process to create an effective output

• Focus should be on core business processes that addresses the external customer and supplier

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Radical Change

• The objective is to address competitiveness and market-dominance

• Radical change provides a new way of building core competencies and good investment management

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Dramatic improvement

• To achieve major improvement in the core process• Planning, procedures and resources are required• Measure, control and manage the process

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BPR Model

Competitiveness

BPR

Process focus Radical change Dramatic improvement

Change and risk management

Best practices - the foundation for success

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Why re-engineer ?

• Downsizing / Rightsizing• Customer satisfaction• Quality improvement goals• Functional performance improvement• Reduce costs• Increase speed (of service)• Overcome a competitive threat• Change of organisational structure

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Process Improvement Possibilities

• Eliminate duplicate activities• Combine related activities• Eliminate multiple reviews and approvals• Eliminate inspections• Simplify processes• Reduce batch size• Outsource inefficient activities• Centralise or decentralise functions / activities

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Reasons to improve processes

• Invisible– Managers delegate their knowledge– Process performance is not measured

• Inconsistent– Jobs, measures and infrastructure are not aligned

with the current process• Ignored

– Processes often unmanaged and rarely updated• Ill conceived

– Processes and policies are developed piecemeal and informally rather than designed as a whole

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BPR is different

• High ambition– Improvements in key performance measures, such as

cost, quality, service or speed • Process focus

– A customer-oriented viewpoint. No organisationalboundaries

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BPR is different

• Creative rule-breaking– Finding assumptions about normal business practice

and customers’ needs• Information technology to enable the above

– IT enables new ways of working through substitution and automation

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Typical benefits BPR produces

• Improve customer service• Reduce cycle time• Improve quality• Reduce costs• Increase market share• Reduce product development time• Increase sales

Think of specific examples for various processes

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Value-chain analysis

• Developed by Michael Porter :– To classify, understand and analyse an organisation’s

value-added processes to achieve competitive advantage

– To analyse how to improve cost structure (productivity) and add value (differentiation)

– Applicable to any industry– Processes classifed into 5 Primary activities and 4

Support activities

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PROFIT

PROFIT

Firm Infrastructure

Human Resource Management

Technological Development

Procurement

Inbo

und

Logi

stic

s

Ope

ratio

ns

Out

boun

d Lo

gist

ics

Mar

ketin

g an

d Sa

les

Serv

ice

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Human ResourceManagement

TechnologicalDevelopment

Procurement

Inbound Logistics Operations Outbound Logistics Marketing & Sales Service

FinancialPolicy Accounting Regulatory

Compliance Legal CommunityAffairs

Flight/ Route andYield Analysis

Training

Pilot TrainingPilot Safety

Baggage Handling Training

Agent Training InflightTraining

Computer Reservation System/ Inflight System/ FlightScheduling System/ Yield Management System

Product DevelopmentMarket Research

Baggage Tracking System

Information Technology Communications

• Route selection• Passenger

service system• Yield

managementsystem (pricing)

• Fuel• Flight scheduling • Crew

scheduling• Facilities

planning• Aircraft

acquisition

• Ticket counteroperations

• Gate operations• Aircraft operations• Onboard services• Baggage handling• Ticket office

• Baggage system• Flight connections• Rental car and

Hotel reservationsystem

• Promotion• Advertising• Advantage

programmes• Travel agent

programmes• Group sales

• Lost baggage services• Complaint follow - up

BPR 02 Principles

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