Business Process Reengineering

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Business Process Reengineering

• Prince Adarkwah
• Javier Alvarez
• Sean Hildreth
• Torrey Maggard

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What is BPR?

• Hammer and Champy definition
• the fundamental rethinking and radical redesign
  of business processes to achieve dramatic
  improvements in critical contemporary measures of
  performance, such as cost, quality, service, and
  speed.

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What is BPR?

• Hammer/Champy methodology 6 steps
• Envisioning
• Initiate
• Process Diagnosis
• Process Redesign
• Reconstruction
• Process Monitoring
• BPR process loops back to step 3

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Detailed view of 6 steps
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Relationship to IS

• Use of information systems is often key
  contributing factors to BPR success
• Information technology is considered a major
  enabler in providing new ways of working and
  collaborating

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Relationship to IS

• Studies indicate that over 50 of all
  reengineering efforts are initiated because of a
  perceived information technology opportunitythe
  actual technological solution is far less
  important than educating employees to use IT as
  both a strategic initiative and as a tool in the
  reengineering process. (Weicher 5)

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Alternative approaches to BPR

• Davenport Methodology
• Emphasizes IT as driver
• Manganelli/Klein Methodology
• focuses on business processes that directly
  support the strategic goals of the company and
  customer requirements
• Kodak Methodology
• Stresses change management as key

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Alternative approaches to BPR

• Alternatives are very similar

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Key Factors to Success

• Most business analysts tend to agree that
  successful implementation of BPR requires the
  ability to effectively lead change.
• John P. Kotter has written several books for the
  Harvard Business Review on how to lead effective
  change in an organization.
• In his book, Leading Change, Kotter has outlined
  8 steps that must be followed in order to
  successfully bring about change.

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Key Factors to Success

• Step 1 Establish a Sense of Urgency
• Set a Burning Platform Atmosphere

• Expose Weaknesses compared to competitors
• Eliminate signs of excess
• Set high unachievable targets
• Stop measure subunit performance

• Send more data about customer satisfaction
  compared to competitors.
• Insist people talk to unsatisfied customers,
  unhappy suppliers, and disgruntled shareholders.
• Use consultants to force relevant data and honest
  discussion into management meetings.
• Eliminate senior management happy talk
• Bombard people with information on future
  opportunities and the organizations current
  inability to pursue those opportunities.

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Key Factors to Success

• Step 2 Create a Guiding Coalition
• Team must be comprised of the right individuals.
• These individuals must posses 4 key qualities.
• Position Power
• Expertise
• Credibility
• Leadership

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Key Factors to Success

• Step 3 Develop a Vision Strategy
• Vision refers to a picture of the future with
  some implicit or explicit commentary on why
  people should strive to create that future
• Six Key Characteristics with a good vision.
• Imaginable
• Desirable
• Feasible
• Focused
• Flexible
• Easy to Communicate

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Key Factors to Success

• Step 4 Communicate the Vision
• Vision must be communicated effectively in order
  for individuals to act.
• Several key elements in effective communication.
• Simplicity
• Use of Metaphors / Analogies
• Use of Multiple Forums
• Constant Repetition
• Leadership by example
• Explanation of Inconsistencies
• Two-way communication

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Key Factors to Success

• Step 5 Empower Employees

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Key Factors to Success

• Step 6 Generate Short-Term Wins
• Set up project milestones
• Celebrate wins frequently
• Acknowledge failures
• Make adjustments to BP

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Key Factors to Success

• Step 7 Consolidate Gains Produce More Change
• Never declare final victory
• Keep change alive!

• This eliminates complacent attitudes
• DAveni Hyper-competition Model

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Key Factors to Success

• Step 8 Anchor New Approaches in Culture
• Transform BP to align with vision
• Promote Individuals in Upper Management that live
  and breathe the vision

• Hire Individuals that believe in the new culture
• Remove the bad apples

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Management Responsibilities

• Start with a vision
• Course of action
• Current condition analysis
• Readiness for change
• Build credibility with the rest of the
  organization

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The Changes of BPR

• Work flow process
• Creation of a new process
• The objective

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Management Responsibilities Cont

• Identify metrics
• Choosing metrics
• Measure the effectiveness of any new processes

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Managements Final steps to BPR

• Transition Plan
• Implementation Plan

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• Company Background
• Started in 1595 in Amsterdam, Netherlands
• Major product Heineken beer
• Second largest brewer in the world
• Operates in 170 countries worldwide
• Started in the United States in 1931
• 1 of over 300 imported beer in the US

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Business Environment

• Heinekens market share was 2
• Over 300 imported beers in the US
• Local breweries gaining popularity
• Lead-time for Heineken beer was 12wks
• Order processing labor intensive
• Customs clearance

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BPR Strategy

• A new business model
• Market the business model to employees
• Overhaul of business operations
• New technology should be easy to use and require
  minimal support
• Distributors should not have to pay to use the
  technology

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The Technology

• Heineken Operational Planning System
• Web based system built around supply-chain
  software
• Form of collaborative planning ,forecasting and
  replenishment software
• Provides customized forecasting data
• Does not require proprietary software, equipment
  or support
• Uses Oracle database,SSL2,runs on Windows or Unix
  and supports all Windows applications

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The BPR Implementation

• One company developed the entire system
• Required no work by distributors
• Distributors need only internet access
• Full implementation completed in 12 months and
  all distributors had access in another 12 months.
• Reduced lead-time by 50
• Increased sales by 10

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Success factors

• Senior management commitment
• Employee Involvement
• Distributors involvement
• Choice of technology mix
• Cost of technology to distributors

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Conclusion
Questions?
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References

• http//www.siemon.com/us/company/case_studies/hein
  eken.asp
• www.wikipedia.com
• Smith, M., Wintermyer, P. (2000). Distribution
  supply chain management. Connector specifier, May
  24, available form http//www.csmag.com.
• Stalk, G. (1988, July/August). Time The next
  source of competitive advantage. Harvard Business
  Review, 4151.
• Venkatraman, N. (1994, Winter). IT-enabled
  business transformation From automation to
  business scope redefinition. Sloan Management
  Review, 7387.
• Weston, R. (1997). Heineken taps online ordering.
  Computerworld, 31(9), 69
• Kotter, John P., Leading Change, Harvard Business
  School Press 1st edition, 1996.
• Schumacher, Wolf D. (2004, February). Managing
  Barriers to Business Reengineering Success.
  March 17, 2007. http//www.prosci.com/w_2.htm.