Business Process Reengineering[4]

Business Process Reengineering(BPR)•What is it? •Reengineering is about fundamental organizational change•Why is it important? •Because rigid, bureaucratic organizations cannot deliver what today’s consumer society demands: speed, customization and variety, convenience, responsivenessLinden, 1995Reengineering OverviewReengineering Overview•What’s driving it? •Consumer demands for speed, customization, convenience; need to become customer focused; budgetary constraints; advanced technology; National Performance Review; Government Performance and Results Act.•When should it be used? •When an organization is feeling considerable pain (big gap between where it is and where it needs to be); when there is strong leadership support, and a strategy or plan for the future•What does it seek to change? •Reengineering focuses on core processes, not functions. Once those are designed in the leanest most seamless manner possible, information technology is employed to support and enable the work•For Whom is it done? •Reenginering adds value for end users. It creates closer relationships with suppliers and customers. IT gives staff broader latitude to do the whole jobReengineering Overview•What are the key Reengineering steps? •Once assessment is completed: map the current process; start at the end (with customer needs) and work backward; set a “stretch objective;” and begin with a clean sheet•What is the role of information technology? •It is an enabler, not a controller of redesigned processes. First reengineer the process, then apply ITReengineering Overview•How long does it take? •The design phase lasts 3-9 months. Initial changes can be made in months, longer term efforts take 1-3 years•What are the major barriers? •Turf battles by functional managers, lack of senior management commitment, poor planning up front, selection of processes customers don’t care about, lack of attention to implementationReengineering Overview•What are the payoffs? •Improved customer satisfaction; cost reductions; ability to respond to change quickly; elimination of wasted staff time and stepsReengineering OverviewWhat’s Driving Reengineering in Government?Budgetary constraintsDemands to become more agile, more customer drivenNational Performance ReviewGovernmental Performance and Results Act of 1993Chief Financial Officers Act of 1990Advances in Information TechnologyPrivatization Interest in reinventing government•about challenging the underlying assumptions on which the organization is built•fundamentally redesigning its processes, systems, and structure around desired outcomesBPR IS….•a “silver bullet;” •primarily about staff participation and empowerment; •another word for downsizing; •about visionary, heroic leadership; •for every organization; •easyBPR is NOTWarning Signs of Trouble That Indicate the Need for BPR•the explosion of chaos and bureaucracy•thinking for the customer•ill-defined automation of existing bureaucracy•bottlenecks and disconnects in critical cross-organizational work processes•elusiveness of accountability•chaos of downsizing•turmoil of integration and mergerProblems that often surfacelack of a “big-picture” concept and poor communicationinattention to detailstaff arrogance and customer exclusionfocus on correction, not error preventionmeasurement problemsfocus only on external customers•Organize around outcomes (customer, product, or process), not functions•Bring downstream information upstream•Capture information once, at the source; share it widely•Provide single point-of-contact for customers and suppliers whenever possible•Substitute parallel for sequential processesKey Reengineering Design Principles•Ensure a continuous flow of the “main sequence” (those activities that directly add value to the customer)•identify value adding and non value adding steps•eliminate or separate every non value adding step, so that the main sequence flows smoothly and quickly•use a triage approach to separate out complex and risky cases from the routine ones•Don’t “pave cow paths;” first reengineer, then automateKey Reengineering Design PrinciplesReengineering PayoffsImproved customer satisfactionFaster cycle timeReduced costsImproved qualityFewer non-value adding steps -better use of staff time1. Do we need to reengineer this business operation? •Is there a simpler solution? •If we do need to reengineer, what are the boundaries, scope, and interface points for the reengineering? •How should we structure the project? •Who should be on the team?2. What is the end vision of the results of our reengineering? •What are our priorities and goals? •What values and principles are reflected in this vision?Eight Decision Points in any BPR Project3. What is the detailed design for our reengineered business operation? •How do the processes function? •What does the organization look like? •What systems do we need? •What infrastructure is needed to support it? •What belief systems and culture must be in place?Eight Decision Points in any BPR Project4. Will our new design for the business operation work?•Do we need to make changes in the design?•Has the new design been tested?5. What is the plan for getting that design implemented? •What is required to make it happen? How long will it take? •What are the risks? •What will it cost?Eight Decision Points in any BPR Project6. Should we fund the implementation of the business reengineering design?•What are the costs?•What are the benefits?•What resources will be required?•How long will it take?Eight Decision Points in any BPR ProjectEight Decision Points in any BPR Project7. Is the implementation going as planned? •What corrections and changes should we make to ensure complete transition to the vision environment?•What areas are resistant ?8. Is the reengineered business operation ready to take on responsibility for continuous improvement to the process?•If yes, let's give people the skills and knowledge to do it right. •If not, let’s keep working with them until they are ready.Re-engineering takes time… the larger the project the more time is requiredcultural transformationsprocess changesorganization changestechnology changesinfrastructure changesBPR requires:•Turf battles•Employee resistance•No one in charge or with authority to push reengineering•Lack of incentives from department or central oversight departmentBarriers to BPR•Difficulties in doing out of the box thinking•Resources tied up in legacy systems•Non-committed top management •Skepticism about another reform effort in governmentBarriers to BPRAmbiguous project scope, leading to ever expanding and unending workLack of agreement on scope, creating territorial and organizational power conflictsInsufficient data to quantify the severity of current problems, preventing recognition of the need for reengineeringInadequate or no executive sponsorship resulting in a lack of fundingProblems & PitfallsInability to relate reengineering project to business strategies, leaving the reengineering project a low priorityUndefined measures by which to assess achievements and benefitsFailure to involve stakeholders, creating unnecessary resistanceProblems & Pitfalls•Top level management support•Long term commitment•High quality staffing•Business as the driver of change•Substantial customer inputCritical Success Factors•Coordination between organizations•Appropriate use of technology•Good up front planning•Need to change the agency culture -emphasize change management issues•Maintain accurate performance measuresCritical Success FactorsABCDFEABCDFEABCDFEIn a system with independent parts, A can be moved by simply moving AIn a system with some interdependence, several elements (A,E,D) may need to be changed in order to move AIn a system with much interdependence, all the elements may need to be changed in order to move ACreating Change in Systems of Varying InterdependenceProcessStructureInformation-TechnologyStructureOrganizationStructureRewardStructureMeasurementSystemsManagementMethodsOrganizationalCulturePowerIndividual BeliefSystemsPhysical Technical LayerInfrastructure LayerValue Layermore concreteeasiest to changemore difficultharder to changeDimensions of BPRComplacencytoo much happy talk from senior managementthe absence of a major and visible crisistoo many visible resourceslow overall performance standardsorganizational structures that focus employees on narrow functional goalsinternal measurement systems that focus on the wrong performance indexesa lack of sufficient performance feedback from external sourcesa kill-the-messenger-of-bad-news, low-candor, low-confrontation culturehuman nature, with its capacity for denial, especially if people are already busy or stressed...you must hit with enough shock effect to immobilize the old culture at least temporarilyThe change effort needs to become a cause, a crusade, and your job is to champion the visionBe prepared to address questions pertaining to:What’s in it for you?What are we trying to accomplish?Why is radical change needed?How do we get there?Why won’t quick fixes do the job?What are the risks?What will happen if we don’t do anything?When will we see the first benefits and what will they be?What specifically do we want you to approve?Why did we get involved in this project in the first place?Improvements in operations should be visible and measurableBPR Principles•Process Redesign Principles•Transformation Principles•Continuous Process Improvement PrinciplesProcess Redesign Principles•Organize work around outcomes•Provide direct access to customers•Harness technology•Control through policies, practices, and feedback•Enable interdependent and simultaneous work•Give decision-making power to workers•Build in feedback channelsTransformation Principles•Assumptions and biases shape behaviors•People believe what you do, not what you say•Involvement breeds acceptance•Just don’t do something, sit there•Change the foundation first•Change takes time, but not that much•Progress is not linear, nor is it smoothContinuous Process Improvement Principles•Improvement is everyone’s responsibility•Improvement is always desirable•Pay attention to detail•Quality requires systemic work•Create an ongoing exchange and sharing of information•Quality is driven by individuals, not organizations