Business Process Reengineering * Rob Gall * July 16, 20011Business Process ReengineeringRob GallJuly 16, 2001Business Process Reengineering * Rob Gall * July 16, 20012Business Process ReengineeringWHY ?•Integrate people, technology, & organizational culture•Respond to rapidly changing technical & business environment•Big performance gains•Focus on customerBusiness Process Reengineering * Rob Gall * July 16, 20013Customer Demands•expect us to know everything•to make the right decisions•to do it right now•to do it with less resources•to make no mistakes•expect to be fully informedBusiness Process Reengineering * Rob Gall * July 16, 200142001General ElectricJack Welch, CEO•Well run company•Initiated Business Process Reengineering•Early results:PrivateSector•4 people –1 room•Report copies to 24 people•No one ever read the report•Everybody assumed…•Saved $150,000Business Process Reengineering * Rob Gall * July 16, 20015Business 2001Department of Defense•Corporate Information Management (CIM) InitiativePublicSector•Primary objective: Improve business•Major overhaul of methods & processes•Largest public or private program ever conceived•Achieve $71.1 Billion in savings during ’90-97•Do not compromise mission capability, readiness and securityNational Performance Review•“Reinvent” Federal Agencies•Projected cost savings of $108 BillionBusiness Process Reengineering * Rob Gall * July 16, 200162001Business Process ReengineeringBusiness Systems Planning /Strategic AlignmentBusiness Process Re-toolingProcess ImprovementValue Added ManagementOperation Process Assessment & RedesignBusiness Process Reengineering * Rob Gall * July 16, 20017Business Process ReengineeringManagement ApproachJust another Fad?“Somebody in top management must have gotten bored, and decided to stir things up.”…this too shall pass.Business Process Reengineering * Rob Gall * July 16, 20018Business 2001Business Process ReengineeringReorganizingDownsizing /RightsizingWhat it’s NOT•BPR looks at what work is required to be done, not how the organization is structured.•Reduces people to achieve short-term cost reductions.•BPR focuses on rethinking work from the ground up.•BPR eliminates unnecessary work.•BPR finds better ways of doing work that is necessary.•BPR focuses on adding value to the customer.Business Process Reengineering * Rob Gall * July 16, 20019Business 2001Business Process ReengineeringWhat is… “the application of a structured methodology to define a function’s “as-is” and “to-be” environments, current and future mission needs and end-user requirements; its objectives and strategy for achieving those objectives, and a program of incremental and evolutionary improvements to processes, data, and supporting aids that are implemented through functional, technical, and economic analysis and decision making.”Department of Defense –CIM initiativeBusiness Process Reengineering * Rob Gall * July 16, 200110Business 2001Business Process ReengineeringWhat is… “Government business process reengineering is a radical improvement approach that critically examines, rethinks, and redesigns mission product and service processes within a political environment. It achieves dramatic mission performance gains from multiple customer and stakeholder perspectives. It is a key part of a process management approach for optimal performance that continually evaluates, adjusts, or removes processes.”Dr. I. M. Longwinded…another twistBusiness Process Reengineering * Rob Gall * July 16, 2001112001Business Process ReengineeringWhat is… “The fundamental rethinking and radical redesign of business processes to bring about dramatic improvements in performance”Dr. Michael Hammer…my favorite twistBusiness Process Reengineering * Rob Gall * July 16, 200112BPR: Historical Perspective1898 –Spanish –American WarBusiness Process Reengineering * Rob Gall * July 16, 200113HistoricalBenchmark…•1898: US Navy: 9500 shells fired, 121 hits (somewhere) 1.3% -World Class Performance!•1899: Exhibition: 1 mile, 25 minutes, 2 hits (sails)•1902: US Navy: 99% accuracy, (50%) within 4 feet)•William Sowden SimsBusiness Process Reengineering * Rob Gall * July 16, 200114Sims…•Observed how current process worked•Observed what others (British) were doing•Adjusted gear ratios•Moved gun sight from barrel, avoided recoil:•Result –Continuous Aim Firing•Estimated RADICAL ImprovementsBusiness Process Reengineering * Rob Gall * July 16, 200115Sims…•Wrote letters to his superiors•Labeled an irritant, received no response•Continued to write•Scoffed by Navigators•If it could be done, we’d be doing it already•An Navigator would have thought of it•If it were done… Impact on Navy org. structure?Sims persevered, never lost sight of his goal…Business Process Reengineering * Rob Gall * July 16, 200116Sims…13thletter: Commander in Chief•Understood military issues•Took action•Radical improvement gains!•ADMIRAL WILLIAM SOWDEN SIMS•1921 -Pulitzer Prize Winner•“the father of modern naval gunnery”•1969 –USS W.S. Sims (Knox Class)Business Process Reengineering * Rob Gall * July 16, 200117Lessons we learn from Sims…•Breakthroughs occur through “Vision”•The organization is #1 obstacle•Senior management sponsorship is essential•Benchmarking has its limits•Ambition can drive BPR•Persevere•The world is full of NavigatorsThe “way we’ve always done it”isn’t always the way we should do it!Business Process Reengineering * Rob Gall * July 16, 200118BPR…Based on Organizational ProcessesThe means by which an organization’s vision is carried out by people working together to deliver desired results to customers.Process: A group of interrelated functions performed by a group of people to deliver a service or product to an organization’s customers.Transforms a defined input into a defined output.Defines the flow of work through an organization.Business Process Reengineering * Rob Gall * July 16, 200119Where processes fit into your organizationBusiness Process Reengineering * Rob Gall * July 16, 200120BPR versus TQMProductivityTimeBPRTQMBusiness Process Reengineering * Rob Gall * July 16, 200121BPR versus TQM•TQM focuses on tasks•Continuous, incremental improvement•Minimal impact on customer•Tasks or people don’t create value, processes do•Historically, we automate tasksHIGH –SPEED CHAOS !!!BPR focuses on system as a wholeBusiness Process Reengineering * Rob Gall * July 16, 200122Getting Started…1) Methodology“A system of methods; a systematic or clearly defined way of accomplishing an end”The “dreaded” wordBusiness Process Reengineering * Rob Gall * July 16, 200123Good Methodology –Oxymoron?•long, slow, restrictive, unimaginative, inflexible•serves as a good road map•you know where you started•you know where you are going•establishes consistency in practiceIBM: BSP/SARapid RE: (54 steps)D.O.D. (25 steps)Hammer, Drucker, Champy, Mangenelli…Graham Process Improvement MethodologyBusiness Process Reengineering * Rob Gall * July 16, 200124Graham Process Improvement Methodology•Excellent reputation, experience & background•In house course, 3-day program•2 methodologies •Process modeling•Process improvement•Hands-on exercise of growing complexity•Custom software available•Puts everyone on the same page (consistent approach)August 28-30, $400, limited to 26 peopleContact Maureen Vosberg, CPD, by Friday, July 20thBusiness Process Reengineering * Rob Gall * July 16, 2001252) Strategic /Business Planning•Provides set of goals expressed in terms of customer need•Defines the organization, its direction & priorities•Identifies customers, major products & services3) Identify, map & evaluate core business processes•Even the largest organizations have less than 10•Core processes have sub-processes•No special tools required•Wall mapping (fun, easy to visualize, enlightening)•Avoid “analysis paralysis”Business Process Reengineering * Rob Gall * July 16, 200126Agency's gather dataYAgency staff key transactionsContact AgencyNOnline Data Entry?Progress monitoredLate ?Sheets sent to FinanceReports sorted, proofed & routedMonthlysMiscellaneous dailiesAdjustmentsData Entry* Refer to Transaction Edit ProcessData EntryNo80% of Vehicles 50% of CustomersRoxy Faxed or Mailed CT: 4 daysRoxyJulie< 1%PT: 2.5 hrsPT: 2 hrsGame & Fish Electronic file uploadFinance UploadNotify FinanceCalcs /Contacts /AdjustsDorothy/Julie Arden/Andy/Diane 4 hoursJulie 10 hrs(38 Agencies)Roxy"Vehicle not billed Report"Business Process Reengineering * Rob Gall * July 16, 200127Current Process DiagramActionDecisionAction•Cycle time•Hand offs•Process time•Cost•Cross borders•Defects /errors•Unhappy peopleBusiness Process Reengineering * Rob Gall * July 16, 200128What Process Modeling Reveals…NDDOT Procurement•’95-’97 biennium •76,021 purchase orders•98% < $5,000•92% < $1,000•> 25 FTE’s involved = > $1,714,000•$22.55 = cost per P.O. (excludes paper & IT)Prior to ReengineeringBusiness Process Reengineering * Rob Gall * July 16, 2001294) Benchmark5) Set “stretch” objective•Establish baseline for comparison•Not always appropriate (US Navy)•Basis for Performance Measurement•Must be ambitious•Get “out of the box”Business Process Reengineering * Rob Gall * July 16, 2001306) Redesign•Ask what the customer needs•Start at the end and work backwards•Organize around outcomes•No Value –Get rid of it!•Design technology INTO the new process•Blank sheet approach ?Insanity: Doing the same thing over and over, expecting a different result.It is unlikely that the same thinking that led to a problem can be used to find its solutionBusiness Process Reengineering * Rob Gall * July 16, 200131•Who does what, when?•Project plan•Organizational requirements•Technical requirements•Resource requirements•Timing•Contingencies8) Getting there7) Validate the new process•Verify objectives are met•Scan “lightly” for exceptions•Involve a few who are “in the box”Business Process Reengineering * Rob Gall * July 16, 200132Top Ways to Fail at Reengineering•Don’t reengineer but say that you are•Don’t focus on processes•Spend too much time analyzing processes•Lack of executive leadership•Reengineer slowly•Be timid in redesign•Sacred cows•Ignore the concerns of your peopleBusiness Process Reengineering * Rob Gall * July 16, 200133Top Ways to Fail at ReengineeringCHEESE & FISH !!!Gus & Joe scenariosBusiness Process Reengineering * Rob Gall * July 16, 200134Change……the only human who enjoys it is a baby with a wet diaper“Progress might have been all right once, but it has gone on too long” Ogden Nash…Why fix something that ain’t broken?“Things will get better –despite our efforts to improve them.”Will RogersBusiness Process Reengineering * Rob Gall * July 16, 200135Management’s roleLeadership: the art of getting people to do things because they want to. Dwight D. Eisenhower•Provide clear vision… and SUPPORT IT!•Establish cross-functional teams•Superior process performance is achieved by having:•Superior process design•The right people•The right environment•Manage TransitionsBusiness Process Reengineering * Rob Gall * July 16, 200136Success!Reengineering can exist with other “improvement” programsJITTQMCQIAutomationABCOutsourcingSelf-directed work teamsAre they competing for scarce resources?They MUST have a common vision.Business Process Reengineering * Rob Gall * July 16, 200137American Standard:•$5 billion corporation•Reduced cycle times for order fulfillment and related processes, inventory savings exceeded half a billion dollars.Texas Instruments:•Reduced software development cycle time from 22 months to 2 months.Social Security Administration:•Issue SSA cards in 3-5 days, instead of 6 weeks.Business Process Reengineering * Rob Gall * July 16, 200138ND Department of Transportation:Motor Pool Billing•Total steps in process reduced by 41%•Total individuals involved reduced 25%•Total cycle time reduced 7 days•Total process time reduced 66%•Estimated paper cost savings > 50%Business Process Reengineering * Rob Gall * July 16, 200139Added benefits of BPR…•Effective, cost-justified implementation of IT.•Through documentation of processes, performance gains are proven.•New process is designed and understood by users of the system, not just the technology people.•IT Implementation cycle is shortened as many analysis steps are already complete.Business Process Reengineering * Rob Gall * July 16, 200140Far better to dare mighty things, to win glorious triumphs, even though checked by failure, than to rank with those poor spirits who neither enjoy much, nor suffer much, because they live in the gray twilight that knows not victory, nor defeat.Teddy Roosevelt1899Business Process Reengineering * Rob Gall * July 16, 200141Rob Gall, ITD328-1990DiscoverND.ComRod Backman, OMBSheila Peterson, OMB328-4904Questions?More Information?Graham CourseAugust 28-30Maureen Vosberg, CPD328-3293