Business Process Reengineering

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Business Process Reengineering Innovation

• Jason Chen
• School of Business Administration
• Gonzaga University
• Spokane, WA 99223
• chen_at_gonzaga.edu

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Innovation as a Response to Change in Market and
Technology
Technological Opportunities
Advances in Technology
EFFICINCY
EFFECTIVENESS
INNOVATION
INNOVATION
New Products and Services
Market Needs
Socio-political Changes
Market
Time
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What is Business Process and Business
Reengineering?

• Business process A set of logically related
  tasks performed to achieved a defined business
  outcome
• Business reengineering means radically changing
  how people work - changing business policies and
  controls, systems and technology, organizational
  relationships and business practices, and reward
  programs.

TM -3
Dr. Chen, The Trends of the Information Systems
Technology
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Principles of Re-engineering(by Michael Hammer)

• Organize around outcomes, not tasks
• Have those who use the output of the process
  perform the process
• Include information processing work into the real
  work that produces the information
• Treat geographically dispersed resources as
  though they were centralized
• Link parallel activities instead of integrating
  their results
• Put the decision point where the work is
  performed.

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BPR
Radical Change
New organization
IT
Types of Organizational Strategies
Industry Structure
Competitive Strategies
Cooperative Strategies
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BUSINESS REENGINEERING STEPS

• 1. Develop business vision, process objectives
• 2. Identify process to be redesigned
• 3. Understand, measure performance of existing
  processes
• 4. Identify opportunities for applying
  information technology
• 5. Build PROTOTYPE of new process

TM -6
Dr. Chen, The Trends of the Information Systems
Technology
7
Figure 3-6 Reengineered Accounts Payable Process
(from Hammer1)
Before
Copy of Purchase Order
Purchasing
Purchase Order
?
Payment
Accounts Payable
Vendor
Invoice
Goods
Receiving Document
Receiving
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Figure 3-6 Reengineered Accounts Payable Process
(from Hammer1)
After
Purchasing
?
Purchase Order
Payment
?
Accounts Payable
Database
Vendor
Goods
Receiving
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Implementing Re-engineering

• The key activities of re-engineering can be
  organized into three phases referred to as the
  3Rs Re-engineering
• Redesign
• Retool
• Reorchestrate

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Tools for BPR

• Simulation
• Flow diagrams
• Work analysis
• Application development
• Workflow software

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ReorchestrateOrganizational Change

• Leadership
• Corporate values
• Cultural change
• Incentives
• Accountability

• Zeal/commitment
• Communication
• Comfortable with ambiguity
• Obstacles to change
• Celebrate success

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The Cs related toOrganization Re-engineering
Projects
The 3Cs of organization Re-engineering
The 4Cs of effective teams
- Commitment
- Customers
- Cooperation
- Competition
- Communication
- Change
- Contribution
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BUSINESS REENGINEERING STEPS

• 1. Develop business vision, process objectives
• 2. Identify process to be redesigned
• 3. Understand, measure performance of existing
  processes
• 4. Identify opportunities for applying
  information technology
• 5. Build PROTOTYPE of new process

TM -13
Dr. Chen, The Trends of the Information Systems
Technology
14
Figure 3-6 Reengineered Accounts Payable Process
(from Hammer1)
Before
Copy of Purchase Order
Purchasing
Purchase Order
?
Payment
Accounts Payable
Vendor
Invoice
Goods
Receiving Document
Receiving
15
Figure 3-6 Reengineered Accounts Payable Process
(from Hammer1)
After
Purchasing
?
Purchase Order
Payment
?
Accounts Payable
Database
Vendor
Goods
Receiving