W7 - BPR Methodologies

Response:

In lecture 7, I have learnt the BPR methodology. BPR methodologies are methodologies that stem from differences between business activities and organizational strategy, and that between current and desired productivity of organizational resources. There are five phrases in BPR methodology. I will now deeply analyze these five phrases and figure out how to achieve a successful BPR.

Phrase 1: Triggering & Executive Visioning

In this phrase, it can start with some sort of trigger. It can be classified into internal and external. It includes inefficiencies in business processing for internal. Environmental change and pressure from competitors are examples of external triggers.

After that, the business direction, vision and objectives of reengineering and the link between breakthrough business goals and reengineering projects should be developed. A mandate for change is produced and a cross-functional team is established with a game plan for the process of reengineering. It is difficult for the planning of organizational changes to conduct without strategic direction from the top since BPR projects usually involve cross-functional cooperation and significant changes to the status quo. They should also take the impact of the environmental changes that serve as the impetus for the reengineering effort into consideration in establishing guidelines for the reengineering project. Moreover, another important factor is to make it the first priority to understand the expectations of the customers and where the existing process falls short of meeting those requirements. With these, the mission or vision statement is formulated.

Phrase 2: Mobilization

After the first step, human resource should be allocated appropriately including selecting project leader, forming core BPR team, selecting the processes which are going to be redesigned, making a preliminary assessment of IT infrastructure and preparing for a BPR plan and budget.

There are some important points for successful BPR. Firstly, executive sponsors are essential for any BPR project. There must be the support from the top management. Secondly, IT people should be involved as early as possible in the BPR project. It is important to avoid figure out IT options after the redesign of the business process. Moreover, IT people can provide information for better business process redesign and the existing IT infrastructure may not be cheaply enough or quickly enough to support the design of the new business process.

Phrase 3: Process redesign

The objective of this phase is to produce one or more alternatives to the current situation, which satisfy the strategic goals of the enterprise.

There are five steps involved in this phrase which are Scoping, Modeling, Analysis, Redesign and Integration.

First, both the performance of the organization’s processes and the way those processes are conducted with those relevant peer organizations are compared to gain ideas for improvement. The peer organizations need not be competitors or even from the same industry. Innovative practices can be adopted from anywhere, no matter what their source.

Having identified the potential improvements to the existing processes, the development of the To-Be models is done using the various modeling methods available.

Then, similar to the AS-IS model, simulation is performed and factors are analyzed like the time and cost involved. The several TO-BE models that are finally arrived at are validated. By performing Trade off Analysis, the best possible TO-BE scenarios are selected for implementation.

Phrase 4: Implementation

The implementation phrase is where reengineering efforts meet the most resistance and hence it is by far the most difficult one. We could expect to face all kinds of opposition. There have be already so much time and effort spent on analyzing the current processes, redesigning them and planning the migration, it would be prudent to run a culture change program simultaneously with all the planning and preparation. This would enable the organization to undergo a much more facile transition.

Once this has been done, the next step is to develop a transition plan from the AS-IS to the redesigned process. This plan must align the organizational structure, information systems, and the business policies and procedures with the redesigned processes. By using prototyping and simulation techniques, the transition plan is validated and its pilot versions are designed and demonstrated. Training programs for the workers are initiated and the plan is executed in full scale.

Phrase 5: Monitoring and Maintaining

A process cannot be successfully reengineered in a short period. A very vital part in the success of every BPR is improving the reengineered process continuously. The first step in this activity is monitoring. There are two things to be monitored. They are the progress of action and the results. The progress of action is measured by seeing how much more informed the people feel, how much more commitment the management shows and how well the change teams are accepted in the broader perspective of the organization. This can be achieved by conducting attitude surveys with those initially not directly involved with the change. As for monitoring the results, the monitoring should include such measures as employee attitudes, customer perceptions, supplier responsiveness etc. Communication is strengthened throughout the organization, ongoing measurement is initiated, team reviewing of performance against clearly defined targets is done and a feedback loop is set up wherein the process is remapped, reanalyzed and redesigned. Continuous improvement of performance is ensured through a performance tracking system and application of problem solving skills.

Case Study:

In the paper “ Business Process Re-engineering: An Example from the Banking Sector” (R. Maull and S. Childe,1993) [3], it has shown an example from the banking industry which utilizes similar 5-phase approach that I have mentioned above.
Five-stage approach to BPR of the bank is as follows:
(1) develop strategy – developing a vision, critical success factors;
(2) identify key processes – related to critical processes, guided by the strategic phase; also define performance factors;
(3) analyse existing processes – modelling the existing process;
(4) develop  an  improvement  plan –  re-design  and  strategic re-engineering;
(5)  implementation – develop/build prototypes , develop IT support systems
In this case, the team has found that the existing processes are quite inefficient to the company for example, there are much unnecessary and duplicated administrative paperwork. After the implementation of the BPR five-phase approach, it has reduced bureaucracy process cycle times, the number of exception routines. Also, the approach adopted at the bank was based first around modeling the existing process, and then seeking to improve through re-engineering based around quality improvement teams. The focus is not on the improvement of the efficiency of individual departments, but on how whole processes can be made both more efficient and more effective.

Conclusion:

To be a good BPR methodology, it should be comprehensive to address each of the phases of BPR. Disciplined method for coordination between each phrases should also be included in its execution.

Reference:

1)” BUSINESS PROCESS REENGINEERING: A CONSOLIDATED

METHODOLOGY” by Subramanian Muthu, Larry Whitman, and S. Hossein Cheraghi 1999

2) "An Investigation of the Methodologies of Business Process Reengineering" by M. Stoica, N. Chawat, N. Shin 2004

3)”Business Process Re-engineering: An Example from the Banking Sector” by Roger Maull and Stephen Childe 1994