The business process reengineering

Summary

In this report we are discussing the two approaches related to the business process it is basically a critical decision that every good and progressing enterprise has to take in short or long run.

The BPR (Business process reengineering) and the business modeling (creating a new process) and the difference in between, is the topic in this report.

Business Process Modeling (BPM) represents the activity of processes of a business. Purpose to implement a business process model is analyze and improve the enterprise’ activities regarding the core business. It is commonly performed in an enterprise by expert business analysts and business line managers, who seeks continuous process improvement and efficiency. Three major types of processes involved in a business are:

1. Management Processes
2. Operational Processes
3. Supporting Processes

Business Process Reengineering (BPR) is a kind of method of management practitioners to improve business efficiency. The fundamentals of Business Process Reengineering are to look at the business processes from a “clean slate” perspective and to find out how to reconstruct these processes to increase the efficiency of the business. Reengineering is redesigning, revising and rethinking of business processes to achieve cost, quality and speed or service oriented efficiency. Business Process Reengineering (BRP) consists of sequence strategies to promote the innovation and resulting excellence in competition, market place and profitability of the enterprise. A simple business process reengineering is best described in following four phases of the cycle i.e.

1. Identification of a Process
2. Review, Update and Analyze ‘AS IS ‘
3. Design ‘TO BE’
4. Testing and Implementation

DEFO model, and all other methodologies related to BPR are discussed then their implementation phases, results then the discussion on results and the conclusion in which the difference between both of these have been highlighted.

1. Introduction / Background

Business processes are the essential part of any kind of business. They are created by the help of business model and show the direction towards which a business flows.

In this report, two basic business models are discussed in detail, difference in the approach is explained and what and how to proceed with these models has been described. The two business model which are discussed here are:

1. Business Process Reengineering
2. Business Process and Model

1.1 Business Process Reengineering

Business Process Reengineering (BPR) is a kind of method of management practitioners to improve business efficiency. The fundamentals of Business Process Reengineering are to look at the business processes from a “clean slate” perspective and to find out how to reconstruct these processes to increase the efficiency of the business.

Reengineering is redesigning, revising and rethinking of business processes to achieve cost, quality and speed or service oriented efficiency. Business Process Reengineering (BRP) consists of sequence strategies to promote the innovation and resulting excellence in competition, market place and profitability of the enterprise.

A simple business process reengineering is best described in following four phases of the cycle i.e.

1.2 Business Process Modeling (Creating a new process)

Business Process Modeling (BPM) represents the activity of processes of a business. Purpose to implement a business process model is analyze and improve the enterprise’ activities regarding the core business.

It is commonly performed in an enterprise by expert business analysts and business line managers, who seeks continuous process improvement and efficiency.

Three major types of processes involved in a business are:

1. Management Processes
2. Operational Processes
3. Supporting Processes

These processes can be further sub divided into numerous sub processes and sequence of activities. These sub processes have their own attributes and also contribute to achieve the objectives and goal of the major process.

2. Problem Area / Scope

This report deals with the difference between two business processes i.e. Business process reengineering and business model (creating a new process).

2.1 Problem Area

       Report investigates the following problematic areas:

• How to deal with business process reengineering?
• How to implement it in an enterprise?
• How to design a business model for a new process?
• What is the difference between the approaches?
• How to improve a business using these models?

2.2 Scope

Report deals primarily with the business process models specially focusing the approach of the two models i.e. Business Process Reengineering and Business Modeling (creating a new process).

Business Process is a vast field with numerous methods and explanations. Report only deals with the Business Process Reengineering and Business Modeling (creating a new process) and how does it impact the working of an enterprise.

3. Methods

Five methodologies are summarized after the basic BPR understanding. A few BPR methodologies from contemporary literature are as follows;

Methodology #1

1. Develop vision & strategy
2. Create desired culture
3. Integrate & Improve enterprise
4. Develop technology solutions

Methodology #2

1. Determine Customer Requirements &Goals for the Process
2. Map and Measure the Existing Process
3. Analyze and Modify Existing Process
4. Design a Reengineered Process
5. Implement the Reengineered Process

Methodology#3

1. Set Direction
2. Baseline and Benchmark
3. Create the Vision
4. Launch Problem Solving Projects
5. Design Improvements
6. Implement Change
7. Embed Continuous Improvement

Methodology #4

1. Motivating Reengineering
2. Justifying Reengineering
3. Planning Reengineering
4. Setting up for Reengineering
5. As Is Description & Analysis
6. To-Be Design and Validation
7. Implementation

Methodology #5

1. Preparation
2. Identification
3. Vision
4. Technical & Social design
5. Transformation

4. Results

Process reengineering emerged as an intelligent and very successful technique to refresh the current running processes in an organization; because business can be used as a common term, Business Process Reengineering BPR is now a famous term plus technique in an organization who is trying to revive the current processes whether it’s a service organization or consumer product manufacturer.

4.1 Reengineering Process

“Reengineering is the elementary rethinking and radical redesign of business processes to achieve remarkable improvements in decisive, contemporary measures of performance such as cost, quality, service and speed”.

BPR advocates that enterprises go back to the basics and reexamine their very ancestry. As for results: BPR is clearly not for companies who want a 10% improvement, it is for the ones that need a ten-fold increase. The last but the most important of the four key words is the word-‘process.’ BPR more focuses on processes and not on tasks, jobs or people. It endeavors to redesign the strategic and value added processes that surpass organizational boundaries.

4.2 Implementing Reengineering Process

According to many in the BPR field reengineering should apply energies in right direction and focus on processes and not be limited to thinking about the organizations.

Currently people in an organization think individually about the particular department. So companies should name the processes rather using the department names that they do such that they express the beginning and end states. These names should imply to all the work that gets done between the start and finish points. i.e, “order fulfillment can be called order to payment process”.

Talking about the importance of processes just as companies have organization charts, they should also have what are called process maps or workflow diagrams to give a picture of how work flows through the enterprise.

Process mapping assists in identifying your current ‘As-Is’ business processes and can be used to provide a ‘To-Be’ roadmap for reengineering your product and service business enterprise functions; needless to say it logically helps to have a thorough look on the whole process cycle and of course it can also be used to monitor the reengineering as well. It is the significant link that your reengineering team can apply to better understand and radically improve your business processes and bottom-line performance. Possessing identified and mapped the processes, deciding which ones need to be reengineered and in what order is the million-dollar question. Generally they make their choices based on three criteria:

1. Dysfunction: which processes are functioning the worst or which process is the “bottle-neck”?
2. Importance: which are the most critical and influential in terms of customer satisfaction;
3. Feasibility: which are the processes that are most likely to be successfully reengineered?

This section will give an overview of creating a new business process; this section provides a guide to creating an initial, ‘as is’ or baseline model, in other words – the current situation.

4.3 Components of Business Process

An ‘as is’ or baseline model gives an overall picture of how the process works, now. Any structural, organizational and technological weak points and bottlenecks can then be identified, along with possible improvements at the next stage.

You will need the following information before you start to create a new business process:

• The desired outcome of the process.
• The start and end points (customer need and customer fulfillment).
• The activities that are performed.
• The order of activities.
• The people who perform the activities.
• The documents and forms used and exchanged between functions and from customers and suppliers.

4.4 First phase

The first phase of the process will involve a lot of positioning and repositioning of events and activities, so make sure you use a method that is flexible and easily changed. Use visual aids; if you’re working with a group of users, it must be communicated to each user.

4.5 Second phase

Once you have established an agreed sequence of events, you can create it as a flowchart on generic software or on specialized proprietary software.

At this stage, need to check your model with the users by carrying out ‘live’ observations of the sequence should be in practice.

4.6 Symbols and notation

The diagrammatical representation of Business Process is commonly ‘notation’.

There is no definitive system for Business Process creation notation, although efforts persist to standardize one.

The Business Process Notation system is an example of an attempt to establish a standard BP notation system.

Organizations may develop their own notation systems or use the notation of their chosen own/different way.

4.7 Methodology

A combined methodology has been extracted from the five methodologies previously presented and an IDEF0 model was developed and for the sake of briefness, we have shown only the major activities in the IDEF0 model in Figure 1. In the following section, we deal with the details of the methodology.

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4.7.1 Activity #1: Prepare for Reengineering:

“If you fail to plan, you plan to fail”. Planning and preparation are vital factors for any activity or event to be successful and obviously in reengineering it is done too. Before executing reengineering, the question, ‘Is BPR necessary?’ There should be a noteworthy need for the process to be reengineered. The validation of this need marks the beginning of the preparation activity. This activity begins with the development of executive consensus on the importance of reengineering and the link between advance business goals and reengineering projects. A cross-functional team is established with a game plan for the process of reengineering. While forming the cross-functional team, steps should be taken to ensure that the organization continues to function in the absence of several key players. Another important factor to be considered while establishing the strategic goals for the reengineering effort is to make it your first priority to understand the expectations of your customers and where your existing process falls short of meeting those requirements. Create or study the existing vision of the enterprise as a well-defined vision will sustain a company’s resolve through the stress of the reengineering process.

4.7.2 Activity #2: Map and Analyze As-Is Process

Before the reengineering team can proceed to redesign the process, they should understand the existing process. While some organizations which are in dire straits might go the other way, attempt a new process design while totally ignoring the existing processes, most organizations need to map the existing processes it helps to analyze and improve on it to design new processes. The important feature of BPR is that the improvement should provide dramatic results.

Many people do not understand the value of an ‘As-is’ analysis and rather prefer to spend a larger chunk of their valuable time on designing the ‘To-Be’ model directly.

The main objective of this phase is to identify bottle necks (anything that prevents the process from achieving desired results and in particular information transfer between organizations or people) and value adding processes. Creation and documentation of Activity and Process models initiates it. Then, the amount of time that each activity takes and the cost that each activity requires in terms of resources is calculated through simulation and activity based costing (ABC). All the footing required having been completed; the processes that need to be reengineered are identified.

4.7.3 Activity #3: Design To-Be process

The objective of this phase is to produce one or more alternatives to the current situation, which satisfy the strategic goals of the enterprise. Benchmarking is the initial step in this phase. “Benchmarking is the comparing of both the performance of the organization’s processes and the way those processes is conducted with those relevant peer organizations to obtain ideas for improvement.” Other organizations need not be competitors or even from the same industry. Innovative and effective methods should be appreciated regardless of the 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, bearing in mind the principles of process design. Then, similar to the ‘As-Is’ model, simulations are performed and ABC to analyze factors like the time and cost involved. This activity is an iterative process and it takes a lot of patience and time.

4.7.4 Activity #4: Implement Reengineered Process

The implementation stage is where reengineering efforts meet the most confrontation and hence it is by far the most difficult one. If we expect that the environment would be conducive to the reengineering effort we are sadly mistaken. The question that confronts us would be,’ If BPR promises such breath taking results then why wasn’t it adopted much earlier?’ When so much time and effort is spent on analyzing the current processes, redesigning them and planning the migration, it would indeed be practical to run a culture change program simultaneously with all the planning and preparation. This plan must support the organizational structure, information systems, and the business policies and procedures with the redesigned processes. The IDEF models that were created in the ‘As-Is’ can be mapped to those created during the ‘To-Be’ and an initial list of change requirements generated. Additional requirements for the construction of the ‘To-Be’ components can be added and the result organized into a Work Breakdown Structure (WBS). Recent developments in BPR software technologies enable automatic migration of these WBS activity/relationships into a process modeling environment. Using prototyping and simulation techniques, the transition plan is validated and its pilot versions are designed and demonstrated.

4.7.5 Activity #5: Improve Process Continuously

A process cannot be reengineered overnight. A very vital part in the success of every reengineering effort lies in improving the reengineered process continuously. Monitoring, first and important step here. Two things have to be monitored – 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’ and discrete ‘fireside chats’ with those initially not directly involved with the change. As for monitoring the results, the monitoring should include such measures as employee attitudes, customer expectations, 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 reviewed and redesigned. Thus continuous improvement of performance is ensured through a performance tracking system and application of problem solving skills. Continuous improvement (TQM) and BPR have always been considered mutually exclusive to each other. But on the contrary, if performed simultaneously they would complement each other wonderfully well. In fact TQM can be used as a tool to handle the various problems encountered during the BPR effort and to continuously improve the process.

5.Discussion

This is my 2nd report another report was made before on the same topic but due to not handling the references correctly it got the complaint of plagiarism; I went to discuss this thing with my instructor and my course coordinator and finally made this 2nd one. To write this kind of report one must study the literature related to the topic and then if we use the chunk of that literature or discuss any idea from it the references must be taken care in a systematic way otherwise it can create a problem.

A zealous customer focus, superior process design and a strong and motivated leadership are vital ingredients to the recipe for the success of any business corporation. It is the key that every organization should acquire to accomplish these prerequisites to success. It advocates demanding hard work and activates the people involved to not only to change what they do but targets at altering their basic way of thinking itself. And on the other hand the new process is more or like same to the BPR but in new modeling there is no previous or existing process to be considered and in modeling the more focus is on the model if the model is understandable attainable then further its implementation and business can be created accordingly.

6. Conclusion

So by defining both of the aspects the question again lingers that what is the difference in between and according to the all study and research and by looking at the real life case studies, I came to a point to say that it all depends on the situation the enterprise is going through or the nature of the organization.

As the HP company reduced their assembly time by doing the reengineering, but the main thing was the company spent countless hours and a lot of money first to come on the point and take the decision that the company will do the reengineering and then by doing intense process flow analysis and by studying the work break down structures the enterprise took the decision which type of reengineering technique should be used.

The bottom-line is it always depends on the company’s nature, the business situation it is going through. The enterprise management’s experience how they take a situation and how right they do the studies rather homework necessary to take the right decision.

As we look the technical aspect of both process reengineering and creating a new process; both of the sides needs sound management and technical expertise and yes the enough funds to go through them.

In reengineering we have to mold the existing processes but creating a new process is to come up with a total new idea which will be the part of main process stream of the enterprise. But I think it’s a long debate sometimes the reengineering is more difficult then to create a new process because if one process is reengineered the enterprise has to do other alters as well to align the reengineered side with the whole stream and this may cost more than the company expects. Its true that reengineering proved to be a success all-over the world among every industry service or production. But many companies could not make it with it.

New process is sometimes necessary like it is necessary if there is a total new range of product line, technology change etc. then a thorough study to fix the new process in the existing process stream.

7. Recommendations

Business process reengineering is an effective tool for management practitioners. It helps in business improvement and further enhances business process efficiency.

Continuous improvement process includes the process reengineering and encompasses all the parameters with in the process re designing and reengineering.

This method can give huge returns. This method began as a private sector technique to help organizations fundamentally rethink how they do their work in order to dramatically improve customer service, cut operational costs, and become world-class competitors.

References

1. Feldmann Clarence.G, (1998),The Practical Guide to Business Process Reengineering using IDEF0., Dorset House Publishing, New York.
2. Modelling and analysis of business process reengineering 2002, vol. 40, no. 11, 2521±2546 GUNASEKARAN and B. KOBU
3. Business Process Reengineering, The Creation and Implementation of a Methodology Brian Fitzgerald and Ciaran Murphy 1996.
4. Bnet.com