Assess Business Strategy
Like many other approaches, BPR claims to align organisation change (and IT development) with business strategy. This is important because BPR concentrates of improving processes which are of primary strategic importance. The assumption is that strategy is already determined, and that it is externally focussed, dealing with customers, products, suppliers and markets. BPR is quite distinct from strategic planning.
Here we choose those processes on which we will concentrate our reengineering effort. This choice involves a number of steps.
Identify Major Processes
A process as “a structured,measured set of activities designed to produce a specified output for a particular customer or market, process is “an interrelated series of activities that convert business inputs into business outputs (by changing the state of relevant business entities)”.
Determine Process Boundaries
This is easy to say and hard to do. Some processes, such as product manufacture, are fairly obvious, though there may be doubt whether to include activities such as materials procurement within this process.
Sometimes the boundaries between processes which follow one another (eg marketing and sales, delivery and installation) are hard to agree. Processes which involve more than one company can also cause boundary problems.
Assess Strategic Relevance
Usually reengineering will concentrate on a small number of processes. This may seem suboptimal, but provided the processes chosen are complete (not parts of processes) and the reengineering is thorough, a flow-on effect will probably mean that unsatisfactory neighbouring processes will soon become candidates for redesign. So we should begin with those processes which are most critical to the organisation’s strategy. At UTS, for instance, the major strategy might be to obtain more money from industry. Processes directly contributing to this strategy would be good candidates for reengineering.
Qualify Culture and Politics
This step (which is even less quantifiable than the others) assesses the culture and politics of the organisational units performing activities within the process, and how these units are viewed in wider organisational politics and culture. Processes in a medical school, for instance, may be harder to reengineer than those in a business school, both because the medical school places a high value on its independence and because it is highly regarded by the rest of the university (or even society). Since successful reengineering ultimately depends on the cooperation of those performing the process, it is better to deal with processes where the culture and politics are favourable.
Creating a Process Vision
“Creating a strong and sustained linkage between strategy and the way work is done is an enduring challenge in complex organizations. Because business processes define how work is done, we are dealing with the relationship between strategy and processes.In BPR, as in all design work, creating the vision is the crucial stage; and it is also the least structured. In assessing strategy and selecting processes we were trying to understand things which (in theory) already exist. Similarly when we come to assess existing processes and resources. For design and implementation we may be helped by guidelines, methodologies and examples of similar systems. But in creating a vision we are more or less on our own. There are a number of techniques, which are known to help in the creative process. When working on process visions it is also helpful to consider in which areas of the business we wish to redesign processes. Davenport deals with two aspects of vision creation: the search for a vision and vision characteristics.
Vision – search
Process visons must be related to strategy, so we may look to the organisation’s strategy for inspiration. This assumes that the strategy is sufficiently specific to give a sense of direction (eg “improve quality of service to regular customers” rather than “improve quality”). Thinking about strategy also keeps the vision search at the right level – broad but specific. Because much BPR work supports a customer focused strategy, it is important to have customer input to the vision. More generally, the “customer” is the one receiving the business output, and this includes internal customers; it is important that we know the output is “right” before we start working out how to produce it.
Benchmarking, in the context of creating a project, means seeing how other people do it. This is related to the idea of adopting “best practice”, though if we want competitive advantage we may have to do better than “best”; nevertheless, it is good to find out what is best so far. We are looking for ideas, not imitating, so we may look for benchmarks in quite different types of organisation; in fact this may be easier, since our direct competitors may not wish to reveal their “best” practice to us.
Vision – objectives and attributes
“Process visions, like strategies, should be easy to communicate to the organization, no threatening to those who must implement (or who are affected by) them, and as inspirational as measurable targets can be.” [Davenport,p119] The process vision shows what we want our new process to do and to a very limited extent how it will do it. These are respectively the process objectives and attributes. The objectives should have a customer or business focus – they must truly be concerned with outcome. They must according to all the experts be measurable – we must be able to tell how we have done. And they should be simple and non-contradicty – we don’t want a long list of competing objectives, nor objectives whose measures are only comprehensible to a mathematician, economist or accountant. Typical objectives would be “reduce delivery time by 50%” or “double the number of potential customers contacted per month”.
The attributes indicate how we intend to achieve the objectives, perhaps in terms of technology or general principles. It is somewhat unusual to develop objectives and means simultaneously but since BPR is aiming for radical objectives it is necessary to have some indication of how they will be achieved before management will be prepared to commit to the design phase. Notice that it is important at this stage to consider a variety of means before the vision is finalised. Adding attributes to our objectives might give “reduce delivery time by 50% by outsourcing delivery services” or “use to internet to double the number of potential customers contacted per month without increasing staff”. Davenport points out that radical change will only be achieved by setting ambitious objectives – “creativity must be encouraged by setting impossible goals”.
Understand and Improve Existing Processes
Some proponents of BPR advocate starting with a “clean slate” but most (including Davenport) recommend that we spend time studying existing processes. There are a number of reasons for this:
•People in the organisations (and customers) will use language based on the existing processes. We need to use this language to explain our proposals. •When implementing the new processes we will have to plan change from the current situation – the existing processes. •The existing processes may be causing problems which we could easily repeat if we do not understand them. Existing processes may also contain activities for avoiding problems which we might not anticipate.
•The existing processes are the base from which we measure improvement. Studying the existing processes includes the following activities: •The current process flow is described using any suitable diagramming method. Such a method should indicate the sequence of activities, trigger events, time taken for each activity and any buffering delays. •The current process is evaluated against the new objectives and assessed for conformance to the new attributes. •Problems with the current process are identified. It is important to remember that reengneering is not meant simply to rationalize existing processes. •Short term improvements to the current processes are proposed. It is not advisable to postpone simple improvements until complete reengineering is done.
Assess Social and Technical Resources
In this step we judge whether we have the resources available to proceed with the project. “Social resources” refer to the organisation and the people in it. Is the organisation used to change? Are there key supporters of BPR? Does the organisation have a tradition of team work and open discussion? Is there an atmosphere of trust? What skills are available? Are people willing to learn? If social resources appear to be inadequate, they will need to be developed before or during the reengineering project. The same applies to technical resources, though these are easier to judge. Is appropriate technology available to support the new processes? This means hardware, software and skilled people. Limitations particularly occur with network infrastructure. Again, missing capabilities will have to be developed, although in this case (unlike social resources) outsourcing is a possibility.
Design and Implement New Processes
Design and implementation of the new processes can use any suitable methodology, but a number of points need to be remembered. •Since BPR is performance oriented the methodology must be able to predict performance during design. •BPR projects are meant to be done quickly – the methodology should support this. •Stakeholders (both customers and those who will be operating the process) must be involved. •We are looking for radical design as well as radical vision so there will be more brainstorming. •For any design proposal we must be able to assess feasibility, risk and benefit. •It would be difficult to achieve the previous objectives unless the methodology was strongly based on prototyping. 5 stages of reengineering:
•design – technical, social
These stages are very similar to Davenport’s, although they go into more detail about process modelling. Manganelli pays more attention to improving existing processes and his methodology has more emphasis on entities rather than processes – ie it has more of a data base flavour. Davenport (1993) notes that Quality management, often referred to as total quality management (TQM) or continuous improvement, refers to programs and initiatives that emphasize incremental improvement in work processes and outputs over an open-ended period of time. In contrast, Reengineering, also known as business process redesign or process innovation, refers to discrete initiatives that are intended to achieve radically redesigned and improved work processes in a bounded time frame. Contrast between the two is provided by Davenport (1993):