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Chapter 6: Technology Enabled verses Clean Slate Reengineering

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Title: Chapter 6: Technology Enabled verses Clean Slate Reengineering


1
Chapter 6Technology Enabled verses Clean Slate
Reengineering
2
What is Reengineering?
  • Business Process Reengineering is a management
    approach aiming at improvements by means of
    elevating efficiency and effectiveness of the
    processes that exist within and across
    organizations. It is a fundamental and radical
    approach by either modifying or eliminating
    non-value adding activities. (Wikipedia)
  • Formalized by Michael Hammer
  • Claimed that the 1 goal for managers should be
    the elimination of non-value added tasks
  • Reengineering can be accomplished through the
    implementation of ERP..but is this the best
    approach?

3
Enroll in Course Current situation (6 years ago)
Reg. Form
Select Courses
Reg. Form
Review request Determine if prereqs. met
Wait in line, usually in rain.
Determine if space available in sections) taught
Registration open yet?
N
Y
Review forms for issues/errors
N
Can student enroll?
Line up for professor
Reg. Form
Y
N
Form OK?
Enroll student, update form
Y
Reg. Form
Key registration data into computer
Y
Need another course?
N
Reg. Form
Bring completed form to registrar table
4
Enroll in Course Today
Select Courses (online)
Sit at computer. Sip coffee.
Authenticate user
Registration open yet?
N
Y
Supply user name and password
Check that student has prereqs
Input requested courses
Check availability in requested sections
Record results in database
Y
Need more courses?
N
Present student results of course requests
5
Real example to be workflow
6
  • Reengineering/Redesign Choices
  • What are the choices?
  • What are the advantages / disadvantages of each?
  • Who should or does use which?

7
  • Reengineering Choices Defined
  • Technology Enabled (Constrained) Reengineering
  • Choices are a direct function of the software
  • Not altering software makes time and cost lower
  • Also called Concurrent Transformation
  • Clean Slate Reengineering
  • Start from scratch with no structures or
    documents
  • Software must be made to fit the needs of the
    firm
  • Costs in terms of time and dollars is generally
    greater
  • Blend (along a continuum) is typical

8
Technology Enabled (Constrained) Reengineering - 1
  • A particular technology (or portfolio of
    technologies) is chosen as a tool to facilitate
    reengineering.
  • Thus, reengineering choices are a function of the
    technologies chosen.
  • The technology drives the reengineering.

9
Technology Enabled (Constrained) Reengineering - 2
  • Provides an ideal goal for reengineering
  • Best Practices
  • Provides structure
  • Pre-existing organization and data requirements
  • Provides a reason for reengineering
  • Persuades the reluctant
  • Produces a better quality system
  • Leverages knowledge-base outside the firm
  • Provides design boundaries
  • Clear objectives with minimal if any wandering

10
Technology Enabled (Constrained) Reengineering - 3
  • Provides a design that fits the software
  • Minimizes modification to already existing
    software
  • Provides a proven design
  • Takes advantage of lessons learned experience
  • Provides for a cost-effective implementation
  • Faster, simpler, more predictable, less risky
  • Avoids engaging Management Consultants
  • No need to think outside the box
  • Michael Hammer 400/hr

11
Advantages of Technology Enabled Reengineering -
4
  • ERP provides the tool and structure to facilitate
    change
  • ERP bounds the design, limiting overload
  • Design is feasible and we know it works (its
    been proven unless beta version used)
  • Designs likely are cost effective than inhouse
    development
  • Designs likely can be implemented in a timely
    manner

12
Clean Slate Reengineering
  • Process design starts with a clean slate
  • Also referred to as starting from scratch or
    green field.
  • Theoretically, no limits

13
Advantages of Clean Slate - 1
  • Provides freedom from tools constraints
  • Avoids tool biases by using a portfolio of tools
  • Not limited by the constraints of a single
    software package
  • Provides freedom from predefined structures
  • Can develop own unique, leading-edge processes
  • Not limited to the configuration options within
    a single software package
  • Separates BPR and technology implementation
  • Clearly defines costs as one or the other
  • Permits immediate use of new technology
  • Dont have to wait for the software company to
    catch up with an advance

14
Advantages of Clean Slate - 2
  • Competitive advantage
  • Allows an organization to develop innovative
    software that is not available through existing
    ERP software
  • May be the only option
  • For some firms in niche industries, clean slate
    reengineering is the only option

15
Comparison Clean Slate vs. Technology Enabled
Advantages
16
Which Firm Should Use Which Approach?
  • Depends on
  • Firms Size
  • Available Resources
  • Time Pressure
  • Strategic Gain
  • Uniqueness of solution

17
Large Firms
  • Have the resources to do clean slate
  • Are often industry leaders and thus, generally
    have time
  • Are likely to use processes as a competitive
    advantage
  • Are more likely to need a unique solution

18
Firms with Deep Pockets
  • Clean slate requires substantial resources
  • In some cases, clean slate will lead to many
    starts and stops before the final design is
    found

19
Firms with Time
  • Clean slate takes longer so only firms that have
    the time can really do clean slate approaches.

20
Firms for which Processes are a Strategic
Advantage
  • The more unique a firm is in terms of its
    industry, processes, customers or other factors,
    the more likely that they see their specific
    processes as a competitive advantage and thus use
    some clean slate approach.

21
Firms that Seek a Unique Solution
  • Technology enabled approaches are easily copied
    and diffused
  • Clean slate approaches are not as rapidly or as
    easily copied.

22
Blend - Somewhere Between the Two
  • The approach claimed to be used by most firms is
    Technology Enabled Reengineering, simultaneous
    with ERP software implementation.
  • In actuality, there are few projects that are
    purely clean slate or technology enabled
  • More of a spectrum

Technology Enabled
Clean Slate
MOST FIRMS
23
Reengineering Tenets
  • Combine multiple tasks and assign a single point
    of contact for each process. EMPOWERMENT
  • An important feature of BPR is integrating
    activities and assigning business process
    responsibility to one individual called a case
    worker.
  • Allow workers to make decisions. Avoid decision
    hierarchies that require workers to go through
    layers of management for decisions about the work
    they are doing.
  • Perform process steps in their natural order.
    Rather than following a linear sequential set of
    tasks, perform process activities as needed,
    sometimes in parallel.

24
Reengineering Tenets
  • Do a cost/benefit on controls and other checks.
  • Only use those checks and controls that are
    cost-effective.
  • Use IT to centralize data management. This allows
    companies to capture and store data only once,
    yet disperse as needed.

25
How do you figure out what processes to
reengineer?
  • Whats broken the most?
  • What process has the greatest impact on the
    customer?
  • Which of the processes are most susceptible to
    successful redesign? (feasibility and scope)

26
How do you know if its broken (or at least in
major trouble?)
  • Extensive information exchange, data redundancy,
    and re-keying of data into multiple systems
  • Excessive inventory, buffers, and other assets
  • High ratio of checking and control to value
    adding
  • Reworking and iteration

27
Need for BPR
  • Survey of SAP R/3 users1
  • Technology enabled strategy dominated
  • Prior to ERP implementation
  • 16 thought BPR needed prior to SAP
    implementation
  • 33 thought BPR unnecessary
  • After ERP implementation
  • 35 thought BPR needed prior to SAP
    implementation
  • 10 thought BPR unnecessary
  • So BPR seems to be a useful exercise

1OLeary 2000
28
Whose Business is Business Improvement?
  • Read the case.
  • Form small groups (2-4)
  • (My) Left side of room
  • Business should lead justify!
  • (My) Right side of room
  • IT should lead justify!
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