Bpr 02 Principles

Business process reengineering

1. Business Process Re-engineering
02 – Principles & Dimensions

2. Slide 2 of 21
Dimensions & Characteristics
Fundamental changes to process, technology and
human factors to achieve dramatic improvements
in key measures
The dimensions & characteristics:
• Balanced attention to processes, people and
technology
• Cross functional, process based perspective
• Judged by measurable results achieved

3. Slide 3 of 21
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

4. Slide 4 of 21
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

5. Slide 5 of 21
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

6. Slide 6 of 21
The Business operation
Business Processes
Values and Beliefs
Management and
Measurement
Systems
Jobs and Structure
determine
require
enable
foster
The business operation diamond

7. Slide 7 of 21
The Impact of BPR
The business operation diamond in context
Business Processes
Values and Beliefs
Management and
Measurement
Systems
Jobs and Structure
INFRASTRUCTURE
Customer needs
Competitor actions Technological and
environmental factors
Assessment of
capabilities

8. Slide 8 of 21
Elements of BPR
•Process focus
•Radical change
•Dramatic improvement
BPR is about competitiveness.

9. Slide 9 of 21
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

10. Slide 10 of 21
•The objective is to address competitiveness and market-
dominance
•Radical change provides a new way of building core
competencies and good investment management
Radical Change

11. Slide 11 of 21
Dramatic improvement
•To achieve major improvement in the core process
•Planning, procedures and resources are required
•Measure, control and manage the process

12. Slide 12 of 21
BPR Model
Best practices - the foundation for success
Change and risk management
Competitiveness
BPR
Process focus Radical changeDramatic improvement

13. Slide 13 of 21
•Downsizing / Rightsizing
•Customer satisfaction
•Quality improvement goals
•Functional performance improvement
•Reduce costs
•Increase speed (of service)
•Overcome a competitive threat
•Change of organisational structure
Why re-engineer ?

14. Slide 14 of 21
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

15. Slide 15 of 21
•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
Reasons to improve processes

16. Slide 16 of 21
BPR is different
•High ambition
–Improvements in key performance measures, such as
cost, quality, service or speed
•Process focus
–A customer-oriented viewpoint. No organisational
boundaries

17. Slide 17 of 21
•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
BPR is different

18. Slide 18 of 21
•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
Typical benefits BPR produces

19. Slide 19 of 21
•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
Value-chain analysis

20. Slide 20 of 21
Value-chain analysis
PROFIT
PROFIT
Firm Infrastructure
Human Resource Management
Technological Development
Procurement
Inbound Logistics
Operations
Outbound Logistics
Marketing and Sales
Service

21. Slide 21 of 21
Human Resource
Management
Technological
Development
Procurement
Inbound LogisticsOperationsOutbound LogisticsMarketing & SalesService
Financial
Policy
Accounting
Regulatory
Compliance
Legal
Community
Affairs
Flight/ Route and
Yield Analysis
Training
Pilot Training
Pilot Safety
Baggage
Handling
Training
Agent Training Inflight
Training
Computer Reservation System/ Inflight System/ Flight
Scheduling System/ Yield Management System
Product Development
Market Research
Baggage Tracking
System
Information Technology Communications
• Route selection
• Passenger
service system
• Yield
management
system (pricing)
• Fuel
• Flight scheduling
• Crew
scheduling
• Facilities
planning
• Aircraft
acquisition
• Ticket counter
operations
• Gate operations
• Aircraft operations
• Onboard services
• Baggage handling
• Ticket office
• Baggage system
• Flight connections
• Rental car and
Hotel reservation
system
• Promotion
• Advertising
• Advantage
programmes
• Travel agent
programmes
• Group sales
• Lost baggage services
• Complaint follow - up
Value-chain analysis