Management information System

A

Project Report

On

Business Process Reengineering (BPR)

Submitted By,

Dhaval Navaldia(38)

Pratik Gamit(39)

Dhara Golakia(40)

Khushboo Jariwala(41)

Under the guidance of

Mr. Hiren Patel

In First Year (Sem-1) MBA Programme

Submitted To

S.R.LUTHRA INSTITUTE OF MANAGEMENTAffiliated to GTU, Surat

ACADEMIC YEAR 2009-10

.

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Sr. no Topic Page no.

1. BPR-Overview 3-4

2. Objectives of BPR 4-5

3. Benefits of BPR 5

4. Characteristics of BPR 6

5. Goals of BPR 6

6. Criticism ( limitation) against BPR 7-8

7. BPR Key Steps 9-11

8. Common Problems with BPR 12

9. How to avoid BPR failure 12

10. Risks in BPR 13

11. Recommendations 13

12. Conclusion 14

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Overview: Business process reengineering (BPR) is the redesign of business processes and the

associated systems and organizational structures to achieve a dramatic improvement in

business performance. The business reasons for making such changes could include poor

financial performance, external competition, market opportunities…etc. BPR is not -

downsizing, restructuring, reorganization, automation, new technology, etc.  It is the

examination and change of five components of the business:

1. Strategy

2. Processes

3. Technology

4. Organization

5. Culture

BPR's main objective is to break away from old ways of working, and effect radical (not

incremental) redesign of processes to achieve dramatic improvements in critical areas

(such as cost, quality, service, and response time) through the in-depth use of information

technology. Also called business process redesign.

BPR derives its existence from different discipline, and four major areas can be identified

as being subjected to change in BPR

Organization

Technology

Strategy

People

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Before moving to the definition of BPR, let us first understand what is business and

process.

What is BUSINESS?

In Simple terms, business (also called a company) is a legally recognized

company designed to produce goods/product/services according to customers

demand.

What is PROCESS?

Hammer and Champy define a business process as a collection of activities that

takes one or more kind of input and creates an output that is of value to the

customer.

Now let us define BPR:

Michael Hammer defines business process reengineering in his book Reengineering the

Corporation as:

Fundamental rethinking and radical redesign of business processes to bring about

dramatic improvements in performance.

OBJECTIVES OF BPR:

The main objectives of BPR are:

Customer focus : Customer service oriented processes aiming to eliminate

customer complaints.

Speed: Dramatic compression of the time takes to complete a task for key

business processes. For instance, if process before BPR had an average cycle time

5 hours, after BPR the average cycle time should be cut down to half an hour.

Flexibility: Adaptive processes and structures to changing conditions and

competition. Being closer to the customer the company can develop the awareness

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mechanisms to rapidly spot the weak points and adapt to new requirements of the

market.

Quality : Obsession with the superior service and value to the customers. The

level of quality is always the same controlled and monitored by the processes, and

does not depend mainly on the person, who servicing the customer.

Innovation : Leadership through imaginative change providing to organization

Competitive advantage.

Productivity . Improve drastically effectiveness and efficiency

The other sub – objectives are:

Improve efficiency

Increase effectiveness

Cost Saving in longer run

Enable new business growth

BENEFITS OF BPR:

Enterprise Integration:

1. Departments are consolidated (strengthen)

2. Several jobs are combined into one job.

Worker Empowerment:

1. There is both horizontal and vertical reorganization

2. There are fewer rules

3. Division of work and coordination is maintained

Number of steps in process are reduced:

1. This is simplification

2. Inspections, checks and controls are reduced or eliminated.

Satisfaction:

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1. The work becomes more satisfying because the worker get a greater sense of

completion, closure, and accomplishment from their job.

CHARACTERISTICS OF BPR:

BPR assumes that the current processes in a business are inapplicable and suggest

completely new processes to be implemented by starting over. Such a perspective

enables the designers of business processes to disassociate themselves from today's

process, and focus on a new process. The BPR characteristics are as follows:

Several jobs are combined into one.

Decision-making becomes part of the job of employees (employee

empowerment).

Steps in the processes are performed in natural order, and several jobs get done

simultaneously.

Work is performed where it makes the most sense.

Controls and checks and other non-value-added work are minimized.

GOALS OF BPR:

1. Customer Friendliness:

Meeting customers requirement closely

Providing Convenience

2. Effectiveness:

Outcome-based approach

Gaining loyalty of customers

Image and branding

3. Efficiency:

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Cost

Time

Effort

THE 3 R’S of REENGINEERING:

REDESIGN RETOOL REORCHESTRATE

(synchronize)

Simplifying Networks Processes

Standardize Intranets I.T

Empowering Extranets Human Resources.

Employee ship Workflow

Groupware

Measurements

CRITICISM (LIMITATION) AGAINST BPR:

Reengineering has earned a bad reputation because such projects have often resulted in

massive layoffs. This reputation is not altogether unwarranted, since companies have

often downsized under the banner of reengineering. Further, reengineering has not always

lived up to its expectations. The main reasons seem to be that:

Reengineering assumes that the factor that limits an organization's performance is

the ineffectiveness of its processes (which may or may not be true) and offers no

means of validating the assumption.

Reengineering assumes the need to start the process of performance improvement

with a "clean slate," i.e. totally disregard.

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According to Eliyahu M. Goldratt (and his Theory of Constraints) reengineering

does not provide an effective way to focus improvement efforts on the

organization's constraint.

Other criticism brought forward against the BPR concept includes:

It never changed management thinking, actually the largest causes of failure in an

organization

Lack of management support for the initiative and thus poor acceptance in the

organization.

Exaggerated expectations regarding the potential benefits from a BPR initiative

and consequently failure to achieve the expected results.

Underestimation of the resistance to change within the organization.

Over trust in technology solution

Performing BPR as a one-off project with limited strategy alignment and long-

term perspective.

Poor project management.

WHEN ORGANIZATION USE BPR

When organization identify they are in trouble.

When they are not in trouble yet but could see major problem ahead.

They are in peak condition and wanted further improvement.

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BPR KEY STEPS:

1) Select the process and Appoint process Team

Two Important Tasks

1. Select the process to be reengineered

2 Appoint a process team

Select the Process

Review business strategy and customer requirements

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Select the process and Appoint process Team

Understand the Current process

Develop and communicate Vision of Improved process

Identify action plan

Execute Plan

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Select core processes

Understand customers needs

No assumption

Select the Process Select correct path for change

Ask - questionnaires, meetings, focus

Appoint the Process Team

Identify process owners

Develop executive improvement team

Provide training to executive team

2.) Understand the Current Process

Develop a process overview

Clearly define the process

o Mission

o Scope

o Boundaries

Set business and customer measurements

Understand customer’s expectations from the process

Identify Improvement Opportunities

o Quality

o Rework

Document the Process

o Cost

o Time

o Value

o Data

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3.) Develop & Communicate Vision of Improved Process

Communicate with all employees so that they are aware of the vision of the future

Always provide information on the progress of the BPR initiative - good and bad.

Demonstrate assurance that the BPR initiative is both necessary and properly

managed

Promote individual development by indicating options that are available

Indicate actions required and those responsible

4.) Identify Action plan

Develop an improvement plan

Appoint process owners

Simplify the process to reduce process time

Remove no-value-added activities

Standardize process and automate where possible

Up-grade equipment

Plan/schedule the changes

5.) Execute Plan

Qualify/certify the process

Perform periodic qualification reviews

Define and eliminate process problems

Evaluate the change impact on the business and on customers

Benchmark the process

Provide advanced team training

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COMMON PROBLEMS WITH BPR:

Process under review too big or too small

Reliance on existing process too strong

The Costs of the change seem large

Allocation of resources

Poor timing and planning

Keeping the team and organization on target

HOW TO AVOID BPR FAILURE:

To avoid failure the BPR process it is recommended that:

BPR must be accompanied by strategic planning, which addresses leveraging

Information technology as a competitive tool.

Place the customer at the centre of the reengineering effort.

Case teams must be comprised of both managers & those who will actually do the

work.

The Information technology group should be an integral part of the reengineering

team from the start

BPR projects must have a timetable, ideally between three to six months, so that the

Organization is not in a state of "limbo".

BPR must not ignore corporate culture and must emphasize constant communication

and feedback.

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RISK IN BPR:

Employee resistance to change

Inadequate attention to employee concerns

Inappropriate staffing

Inadequate technologies

Mismatch of strategies used and goals

Lack of oversight

Failure of leadership commitment

OUR RECOMMEDITIONS…..

Top management support

BPR must be accompanied by strategic planning, which addresses leveraging IT

as a competitive tool.

Before implementing BPR management should create fair amount of awareness

amongst employee in order to achieve positive response and acceptance.

BPR must not ignore corporate culture and must emphasize constant

communication and feedback.

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.

There should be uniformity and standardization of goal and objective to

achieve in BPR project.

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BPR must be accompanied by strong communication process

During BPR process employee should be provided a required skill set training.

Include key personnel and function as early as possible

Start with small.

OUR CONCLUSION……..

Change is inevitable in today’s competitive world. Organization has to be ready for

continuous change for success. However, the most important factor which makes

organization successful in the race is how fast and consistently they can adopt change.

Thus, BPR helps to be flexible with organization and also helps to easily accept the

change according to the situation.

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