Enterprise Engineering

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Enterprise Engineering
Larry Whitman whitman_at_imfge.twsu.edu (316)
691-5907 (316) fax
Industrial Manufacturing Enterprise
Department The Wichita State University http//www
.mrc.twsu.edu/enteng
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IE880I - Topics

• Overview of Enterprise Engineering (3 weeks)
• Basic overview of what is enterprise engineering
  and its benefits. Students will learn the
  advantages of EntEng and associated terminology
  and philosophy.
• IE880I - Exam 1 - February 12, 1999.
• Test will be closed book/notes - fill in the
  blank/essay format.
• One hour long, then we continue Enterprise
  Models.
• We will have class Feb 26, 1999
• Dr. Malzahn will be guest speaker on Activity
  Based Costing
• Then 330-430 Dorothy Moore at the Ablah Library
  will review research capabilities at the library
  in room 217
• Extra Credit Option
• One-Two page summaries of five articles
• Worth 10 points on any exam (You made a 90 on an
  exam, you do the five articles and I like your
  summaries, you get credited for a 100 on the
  exam.)
• Only for ONE exam (you can do it for the final if
  you want!)

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Today

• Review purpose from last week
• Review and discuss Hammer and Champy book on
  Reengineering

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Opportunities for Improvement

• Writing Center - LAS Building 6th Floor 601
• Talk with a student assistant about drafts of
  your paper.
• Also use computer assistance to develop skills
• Free
• Conversation Class for non-native speakers
• Informal practice group to gain confidence in
  speaking
• Thursdays 130-220pm (you can start any week)
• Learning Resource Center Grace Wilkie East
• Free

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Last Week Purpose

• Understand that the purpose has three elements
• Vision - who/what you want to become
• Mission - how youre going to get there
• Values - boundary or framework that guides
  behavior

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Environment
Opportunities
Strengths

• Weaknesses

Threats
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Goals
Where we want to be
Goals

• Where we are now

Environmental Assessment
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Obstacles
Where we want to be
Goals

• Where we are now

Environmental Assessment
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Strategies - consume resources
Strategy
Where we want to be
Goals

• Where we are now

Strategy
Environmental Assessment
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Objectives
Where we want to be
Goals

• Where we are now

Strategy
Objective
Environmental Assessment
Objective
Objective
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Reengineering the Corporation A Manifesto for
Business Revolution

• Corporations must undertake nothing less than a
  radical reinvention of how they do their work.

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History

• Set of principles for the 19th and 20th centuries
  must be laid to rest.
• Adam Smiths reductionism
• or go out of business
• We must reunify those tasks.
• Discontinuous thinking

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Process

• a set of activities that, taken together, produce
  a result of value to a customer

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Examples on pages 8 and 9
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Why hierarchical management worked

• suited to a high-growth environment (scalable)
• ideally suited for control and planning
• short training periods

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Three forces driving companies

• Customers (sellers no longer have the upper hand)
  (mass customization)
• Competition (new guys do not play by the rules)
• Change (pervasive and persistent) (product life
  cycles)

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Must be process based

• stovepipes
• economies of scale (overhead, burdened) pg 29

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Definition of reengineering

• starting over
• the fundamental rethinking and radical redesign
  of business processes to achieve dramatic
  improvements in critical contemporary measures of
  performance, such as cost, quality and speed.
• must focus on the redesign of a business process,
  not departments or organization

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It is not

• Automating things (efficiency)
• Quality programs or TQM or Kaizen

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Characteristics

• Several jobs combined into one
• handoffs
• Workers make decisions
• not up and down the chain
• vertical compression
• natural order to steps
• multiple versions of processes
• triage
• Work is done where it makes sense
• not organizationally based

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Characteristics (continued)

• Checks and controls are reduced (eliminated)
• Reconciliation is minimized
• Case managers (single point off contact)
• Hybrid centralized/decentralized ops

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The way we work

• Work units change (functional to process)
• Jobs change (simple tasks to multi-dimensional)
• Roles change (controlled to empowered)
• Preparation (training to education)
• training - teaching a specific skill
• education - understanding of the whys (poor job
  definition)
• Performance measures (activities to results)
  (all)
• Advancement (performance to ability)
• Values (protective to productive)
• Organizational (hierarchical to flat)
• Executives (scorekeepers to leaders)

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Deductive vs inductive

• Deductive - defining the problem, seeking and
  evaluating different solutions (general to
  specific)
• Inductive - first recognize a powerful solution
  and look for problems for it to fix (specific to
  general)

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IT Attitudes

• supply creates its own demand
• An important technology first creates a problem,
  and then solves it Allan Kay
• I go to where the puck is going to be, not
  where it is. Wayne Gretzky

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Team members

• Leader
• Process owner
• Team
• Steering committee
• Reengineering czar

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What to reengineer?

• Processes, processes, processes
• beginning and end states
• process maps

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What to reengineer?

• Dysfunction
• importance
• feasiblity
• look at symptoms on pages 122ff

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Customer requirements

• Add known vs unknown

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What Customers Want
HOW
UNANTICIPATED Excitement Surprise
SPECIFICATIONS Required Desired
UNSPOKEN WANTS
WHAT
SPOKEN WANTS
BASIC Essential Taken for granted
UNSPOKEN WANTS
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Benchmarking

• Can be restricting
• Can spark new ideas

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Be familiar with chapter 8, 9

• Must communicate the need
• Here is where we are
• Here is where we need to be

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Succeeding

• 50-70 of efforts fail
• Fail do not achieve expected results

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Why do they fail?

• Try to fix a process instead of changing it
• Dont focus on business processes
• Ignore everything except process redesign
• Forget people
• Be willing to settle for minor results
• Quit too early
• Place constraints
• Allow existing cultures and attitudes to
  interfere
• Bottom up

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Why do they fail? (continued)

• Assign someone who doesnt understand/believe in
  BPR
• Dont allocate enough resources
• Low priority or with many priorities
• Dissipate energy across many BPR projects
• Attempt when CEO is close to retirement
• Fail to distinguish reengineering
• Concentrate only on design
• Dont make anybody unhappy
• Pull back at signs of resistance
• Drag the effort out

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BPR- Art to Engineering

• 70 BPR efforts fail
• They cite three reasons
• lack of adequate business case (rationale)
• Unclear, unreasonable, unjustifiable reasons
• Absence of robust and reliable methodologies
• Incomplete or inadequate implementation

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Methodology, Methods, and Tools

• A BPR Methodology provides a structured framework
• step by step roadmap - ensures consistency
• built by capturing strategies, techniques,
  methods, tools into the framework.
• Methods - encapsulated best practice focusing on
  a specific structured approach
• Tools - generally software which implements a
  method

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Why BPR succeeds

• A team-based effort guided by a proven,
  structured methodology that is aided by a
  powerful set of methods and supporting tools.
• A focus on business processes rather than
  functions.
• Cross-organizational process restructuring.
• Challenges established assumptions.
• CPI activity enabling both incremental and
  paradigm shift change.
• A Think Globally, Act Locally approach.
• A well planned effort with clear goals, defined
  business metrics, and measurable results
  throughout the effort.
• Technology that can support the change.

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Why BPR Fails?

• Multiple, uncoordinated initiatives.
• Lack of commitment to establishing an in-house
  (organic) capability.
• Insufficient or inadequate methodology, methods,
  and tools.
• Attempt to outsource key decision-making.
• Failure to concurrently address business,
  information system, and organizational change
  together with process change.
• Inability to leverage information technologies
  and realign information systems quickly enough to
  make a smooth transition.
• Inability to align process-intent with enterprise
  vision and goals, organizational structure, and
  job performer management.
• Lack of top level commitment and understanding.

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Motivation for BPR

• Fear of Failure
• Need for Structural Evolution
• Need for Agility

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5 Steps to plan BPR

• Develop or validate the strategic plan.
• Develop or validate the business systems plan.
• Develop or validate the annual business plan.
• Construct performance cells (performance
  measures) for processes.
• Establish the process improvement project
  business case.

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Questions addressed by planning BPR

• Are the project objectives clearly driven from
  the enterprises strategic goals and operational
  objectives?
• Have the core business processes and critical
  success factors been identified?
• Have the critical business issue(s) been
  identified as well as the core processes that
  have the greatest impact on critical business
  issue(s)?
• Have the current costs been analyzed for the core
  processes?
• Has a process improvement and management plan
  been developed?

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Metrics

• Cycle Time
• Cost
• Quality
• Asset Utilization
• Revenue Generated

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BPR Methodology (IDEF0)
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BPR Methodology (IDEF3)
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Capability Model of BPR
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BPR Principles, Methods, and Tools
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Conclusion

• Later material covers models, analysis, design,
  and implementation.