Reengineering
Created by
Michael Mann
Operations Management 345
Topics
 What is Reengineering
 Can you use it in your organization
 What is involved
 How it works
 Examples
 Exercise
 Conclusion
Reengineering Defined
Reengineering is also known as
Business Redesign. Business
Process Redesign is "the analysis
and design of workflows and
processes within and between
organizations" (Davenport &
Short 1990).
Business Process Reengineering
 Has been around for a long time.
 Written on extensively in trade journals
and research articles.
 Is it a fad?
 Technology is vital to the Reengineering
process.
The success of Business Process
Reengineering
 Around 70% of all BPR projects fail.
• Lack of management commitment and
leadership
• Unclear definition of the BPR project
• Unrealistic scope and expectations
• Resistance to change
• Lack of resources
Can you use this in your
organization
 Ask these questions about the project.
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Is the process needed?
Can and should it be redesigned?
What purpose does it serve?
Who is responsible for it?
What competencies are needed for someone
to successfully complete it?
Organizations seeking to
reengineer
Make the customer the starting point
for change -- by identifying customer
wants and creating the infrastructure to
support these expectations
 Design work processes in light of
organizational goals
 Restructure to support front-line
performance.
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Reengineering
Recommendations
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BPR must be accompanied by strategic planning, which
must address leveraging IT as a competitive tool.
Place the customer at the center of the reengineering
effort -- concentrate on reengineering fragmented
processes that lead to delays or other negative impacts
on customer service.
BPR must be "owned" throughout the organization, not
driven by a group of outside consultants.
BPR must be sponsored by top executives, who are not
about to leave or retire.
BPR projects must have a timetable, ideally between
three to six months, so that the organization is not in a
state of "limbo".
Surviving Reengineering
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BPR calls for radical change
Change brings out negative reactions in many people
How to cope:
Spend time with co-workers who have the most positive
attitudes.
Do one thing differently each week. Break the old habits.
Talk to outsiders who have gone through reengineering.
Read trade and business publications to put
reengineering in perspective
Goals of BPR
Increase service level
 Reduce total process cycle time
 Increase throughput
 Reduce waiting time
 Reduce activity cost
 Reduce inventory costs
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Tools for developing a BPR
 Flow diagramming-based simulation tools
 System dynamics-based simulation tools
 Discrete event-based simulation tools
Implementing BPR
 Analysis
• Is the redesign feasible?
• Which issues will pose the most complexity?
We will need to allocate resources to these
issues?
Implementing BPR
 Software Functionality
• Tools are assistants for participants in the
implementation plan.
• Tools are needed to guide the implementation
through the different phases.
• Tools must provide the overall roadmap.
Implementing BPR
 Management plans
• Standards for consistent descriptions of
processes, process strategy and plans.
• The framework of entities necessary for
effective process management.
• Linkages showing how each employee's job
contributes to the building and delivery of
value to the enterprise's customers.
Implementing BPR
 Human resources
• Identify essential agents within the
organization.
• The behavioral aspects of the agents
– Motivation
– Culture
– Incentives
– Adaptability
Summary of Implementing BPR
 Define
 Model
 Analysis
 Software
 Management
 Human resources
Real World Example
 Xerox
• Redesign of the organizational structure
• To facilitate the reorganization of the
Corporate Information Management Function
• Response to expiration of patents and
competition from Fuji and Canon.
Real World Example Continued
 Main goal of Xerox was to increase market
share and their return on assets
 Focused on four major areas
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Corporate strategies and programs
Corporate technology strategies
Corporate telecommunications strategies
Executive and office information systems
Real World Example Continued
 A new CIO was selected
• Objectives to hire and train the right people for
the new CIM
• Defined roles and responsibilities for the new
CIM group
Xerox Continued
 Three level architecture was developed
• Data processing
• Distributed processing
• Workstations and OIS
Xerox Case Summary
 Primary focus to redesign the
organizational structure
 People and technology were both needed
to be successful
Ask these questions for a
reengineering exercise
 What changes in the present system are
needed?
 How quickly should the changes be made,
draft a time line.
 In what order will the changes be
scheduled?
 What approvals, buy-ins and partner
involvements are needed?
Exercise continued
 What is the strategy for gaining these
approvals?
 Who will be responsible for what, when,
where and how?
 Identify each person
 Draw a table for each implementation step.
Exercise Continued
 Identify strategies for possible major
obstacles that might emerge.
 Plan for monitoring and working out
problems.
 What staff changes will be needed?
 Establish schedules and objectives for
communication and training.
Exercise continued
 Look at all new working arrangements and
new shifts.
 Are any equipment or facility changes
needed?
Summary
 The first question to ask is “What needs to
be done”
 Over time BPR involves changes in
• People
• Processes
• Technology
Summary
 Set objectives
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Do you want to increase service level
Reduce total process time
Increase your throughput
Reduce waiting time
Reduce your activity cost
Reduce your inventory time
Summary
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BPR is used for
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Combining duplicate activities
Eliminate multiple reviews & approvals
Reduce batch sizes
Put processes in parallel
Implement demand pull
Outsource inefficient activities
Eliminate movement of work
Organize multifunctional teams
Conclusion
 Remember over 70% of BPR projects fail
• Proper understanding of BPR is needed before
taken on a project.
• BPR is used for radical redesign and improved
work processes