Business Process Reengineering / Best Practices

1. Business Process Reengineering / Best Practices Steve Smith November 22, 2004

2. What is Business Process Reengineering? • Process - a logical set of related activities taking inputs, adding value through doing things, and creating output. • Business Process – “a set of activities that transform a set of inputs into a set of outputs (goods or services) for another person to process using people or tools.” 1 • Goal: to determine the best and most efficient ways to accomplish a task and implementing them • 50 – 70% of business reengineering attempts fail 1 http://www.prosci.com/intro.htm

3. Stages to Business Process Reengineering2 • Stage 1: Preparation • What is the level of organizational commitment? • What are the project goals? • Who should be on the team • Stage 2: Identifications • What are the major business processes? • What are the strategic processes? • What are the business breakpoints? • What processes should be reengineered within certain time frames 2 http://earthrenewal.org/bprmist.htm

4. Stages to Business Process Reengineering • Stage 3: Vision • What are the subprocesses and activities, making up the major processes • How do information and resources flow through the processes • Determine why the company is doing things the way they are • What are specific improvement goals • Are there ways to achieve business goals that seem impossible today? • Stage 4: Solution: Technical Design • What are the required resources and technologies needed in the reengineered process?

5. Stages to Business Process Reengineering • Stage 5: Solution • What are the required human resources? • How will responsibilities change? • What training programs will be required? • Who is most likely to resist change? • Stage 6: Transformation • How and when should progress be monitored? • How should unanticipated problems be handled? • How is the momentum for continuous change sustained?

6. Pitfalls for Business Process Reengineering • Employee resistance to change • Inadequate attention to employee concerns • Inadequate and inappropriate staffing • Inadequate developer and user tools • Mismatch of strategies used and goals • Lack of oversight • Failure in leadership commitment

7. Best Practices • - “A method which has been judged to be superior to other methods. Many times it is the most efficient way to perform a task “3 • BPR is used to identify best practices • SAP R/3 has between 800 and 1000 best practices within it • Benchmarking – compares an organization’s methods with peer groups, with the purpose of identifying best practices and to lead to superior performance. • The company attempting to identify a best practice is the entity that actually determines if the discovered process is indeed a best practice 3 http://isds.bus.lsu.edu/cvoc/learn/bpr/mprojects/bp/bpbasics.html

8. Reengineering Options • Clean Slate Reengineering • basically everything is designed from scratch • has no predefined constraints • slower and harder to apply • more responsive to organizational needs • Technology Enabled Reengineering • the system is selected first and then processes are reengineered • faster and cheaper than clean slate engineering • usually changes the organizational processes heavily

9. Clean Slate VS Technology Enabled Advantages Disadvantages • Not constrained by tool limitations • Company may have unique features where vendor best practices aren’t appropriate • Not subject to vendor software changes • No preexisting structure to design • May involve more consultants • May be more costly • May not work with selected ERP Clean Slate Technology Enabled • Focus on ERP best practices • Process bounded thus easier • Know that the design is feasible • Experience of others ensure designs will work • Software is already developed • system evolution possibly limited by technology • No relative advantages (other people can use the system too) • All best practices may not be available

10. Business Process Reengineering / Best Practices Any Questions?