Business Process Reengineering Best Practices Steve Smith November

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

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

Stages to Business Process Reengineering 2 - 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

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?

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?

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

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

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

Clean Slate VS Technology Enabled Advantages Clean Slate - Not constrained by tool limitations - No preexisting structure to design - Company may have unique features where vendor best practices aren’t appropriate - May involve more consultants - Not subject to vendor software changes Technology Enabled Disadvantages - 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 - May be more costly - May not work with selected ERP - system evolution possibly limited by technology - No relative advantages (other people can use the system too) - All best practices may not be available

Business Process Reengineering / Best Practices Any Questions?