Prof.Dr. Jean-Paul Thommen, University of Zagreb

Slide 1.1

Business Process Reengineering

Prof.Dr. Jean-Paul Thommen, University of Zagreb

Slide 1.2

Example Division of Work

• 1776 Adam Smith: The Wealth of Nations

• Example: producing needles

Comparison in productivity: With division of work increasing by factor 240

• without division of work:

• 1 worker• all performings

result:20 needles/day20 needles/worker

• with division of work:• 10 workers• 2 to 3 performings each

result:48000 needles/day4800 needles/worker

Prof.Dr. Jean-Paul Thommen, University of Zagreb

Slide 1.3

Hypothesis of Division of Work

• Productivity rises with increasing division of work

Productivity

Division of Work

Results of Division of Work:

• increasing dependencies

• increasing complexity

Prof.Dr. Jean-Paul Thommen, University of Zagreb

Slide 1.4

Limits in Division of Work

• Co-ordination• Technology• People

Productivity

Division of Work

Prof.Dr. Jean-Paul Thommen, University of Zagreb

Slide 1.5

How to Start Organising

• Why does a company have to organise?

• Which Division of Work (organisational structure) does a company have to choose?

General task

Different tasks

Multipersonal completion of the general task

Division of Work

Useful Division of Work

Prof.Dr. Jean-Paul Thommen, University of Zagreb

Slide 1.6

Yesterday:

Structure Follows Strategy

Today:

Structure Follows Process Follows Strategy

Prof.Dr. Jean-Paul Thommen, University of Zagreb

Slide 1.7

What We Have Inherited

Themes: specialisation of labour, hierarchical management,

task efficiency, control

Consequence: fragmentation

Themes: specialisation of labour, hierarchical management,

task efficiency, control

Consequence: fragmentation

Prof.Dr. Jean-Paul Thommen, University of Zagreb

Slide 1.8

The Old Process

Credit Checking

Pricing

Terms andConditions

Issuance

Prof.Dr. Jean-Paul Thommen, University of Zagreb

Slide 1.9

The „Improved“ Process

Credit Checking

Pricing

Terms andConditions

IssuanceControl Desk

Prof.Dr. Jean-Paul Thommen, University of Zagreb

Slide 1.10

The Reengineered Process

Advisor 1 Advisor 2 Advisor 3

Deal StructurerRequest

Response

Prof.Dr. Jean-Paul Thommen, University of Zagreb

Slide 1.11

Core Processes And Value Chain

supplier

management

accounting finance HRM IM legal

marketing R & D production distibution sales

customers

development of new products

order generation and production

integrated logistics

service

core process

value chain

support function

Prof.Dr. Jean-Paul Thommen, University of Zagreb

Slide 1.12

Example: Process Organisation

PR PR PR PR PR PR

PV productionPR

PV personnel recruiting and developmentPR

PV development of consulting capabilitiesPR

PV set-up of subsidiariesPR

PV order generationPR

generalmanagement

officemanage-

mentsecretary

IM,telecomm.,

MIS,security

public relationadvertisement

QIAplanning

andAudit

mai

n pr

oces

ses

cross sectional function

PR: person responsible for the process

Prof.Dr. Jean-Paul Thommen, University of Zagreb

Slide 1.13

Cut costs Increased revenue

Cut cycle times

Increased productivity

44%

38%

15% 15%

24% 23%29% 27%

European companiesAmerican companies

Success of “Business Process Reengineering”-

Projects