Some common descriptions about what it is and what it is not

What is Reengineering?

WHAT IS BUSINESS PROCESS REENGINEERING?

Dr. mer Yaz Department of Business Administration Eastern Mediterranean University

1/03/2005

This slide set is prepared by Dr. mer Yaz for MGMT 585 Business Process Reengineering

throwing aside old systems and starting over not tinkering with what already exists not a patchwork fix means asking if I were re-creating this organization today, given what I know and given the current technology, what would it look like? going back to the beginning and inventing a better way of doing work

What is Reengineering?
Formal Definition of Reengineering
reengineering is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance such as
cost quality service speed
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What is Reengineering?
Key words in the above definition
fundamental
why do we do what we do? why do we do it the way we do?
helps get rid of tacit rules and assumptions which may be obsolete or erroneous

start with no assumptions; no givens ignore what is and concentrate on what should

be

What is Reengineering?
radical
means root (radix) (kkten) getting to the root of things; not superficial throw away the old radical redesign: disregard all existing structures and procedures and come up (invent) new ways of accomplishing work reengineering is
not business improvement not business enhancement (gelitirme) not business modification (deitirme)
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What is Reengineering?
dramatic
not marginal or incremental improvements blowing up the old and replacing it with something new achieving large and significant improvement is the objective in reengineering

processes
a process is a group of activities or tasks that uses one or more kinds of input and creates an output that is of value to the customer.
registration process passport issuing process book check-out process at the library

What is Reengineering?
tasks in a process are important; but what counts is the successful completion of the whole process to create value for the customer
ordering from amazon book store on the internet order receiving and fulfillment process many tasks involved what the customer wants is correct and speedy delivery of books and other items.

What is Reengineering?
Reengineering is not
automation (more efficient way of doing the wrong things!!!) restructuring (yeniden yaplanma) downsizing (klme) reorganizing de-layering or flattening an organization total quality management or quality improvement (although both TQM and BPR share common themes)
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In summary, the four keywords are fundamental, radical, dramatic, and process.

What is Reengineering?
Illustrations in Hammer & Champy
IBM Ford Kodak We will briefly summarize the IBM case in class. The other two is for you to read. I will ask any one of you to present these in class next time.

What is Reengineering?
The case of IBM Credit Corp.
finances hardware, sofware, and services that IBM sells; profitable business processing requests for financing 5-step procedure; all done by different individuals or groups. the end of the processa quote letter sent to the IBM field salesperson took 6 days (average); sometimes as long as 2 weeks many times business was lost due to long 10 turnaround time

What is Reengineering?
installed a control desk to answer salespersonss questions
added more time to the process

What is Reengineering?
developed a new computerized system to support the deal structurers
the system was fine for most situations deal structurers could get help from a pool of real specialists, if needed

brainstorming session by two managers

actual work took only ninety minutes; the remainder of seven days was due to travel from one department to the other

Results of reengineering:
turnaround time: 7 days -- 4 hours a slight decrease in number of people increase in number of deals handled: 10000 % 90 % decrease in turnaround time a very high increase in productivity dramatic, radical, process true BPR!!!
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replaced specialists with generalists; one person deal structurer processed the entire application
old system was based on certain assumptions about the nature of the work every bid request is unique

What is Reengineering?
Ford Motor Company case
Accounts payable department
500 people computers 20% decrease in number of people not real BPR MAZDA only 5 people

Goods
Invoice

Vendor Purch Order

Purch. Dept

Reengineer a process, not department

procurement was chosen
purchase order ---> goods for the department procurement : purchasing, receiving, and accounts payable functions

Present System at Ford

Accounts Payable

Receiving dock

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Form

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