Week6 - BPR Methodologies

Lecture 7: BPR Methodologies


In this lecture, we are focusing on the 5 phases model for BPR

Phase I – Triggering and executive visioning
Phase II – Project mobilization
Phase III – Process Redesign
Phase IV – Implementation and organizational change
Phase V – Monitoring and maintaining

1. Phase I – Triggering and Executive Visioning
In this phase, we are required to trigger the performance problem, competitive re-positioning, or pressure from a supply chain members.  Executive Visioning may result in creating need to cut costs and incremental improvement.

2. Phase II – Project Mobilization
During this stage, some processes are selected to redesign based on the identified process goals and the required IT infrastructure.It is also bounded by budgets and time limit.

3. Phase III – Process Redesign
There are five steps in this stage, they are:
1) Identifying Process Boundaries - Analysis of Value Chain Boundaries
2) Data Collection - Data collected to construct a Process Flow Diagram
3) Identifying Key Issues - SWOT analysis
4) Refine Process Redesign Goals - Cross-Leveling Process
5) Process-Level Analysis - Knowledge Value Added

4. Phase IV – Implementation and organizational change
While implementing the To-Be Process, there would be some adjustment on the staff skills. Also the organizational structure has to change to support the implementation.

5. Phase V – Monitoring and maintaining
After the To-Be process is implemented, there should be monitoring continuously on the operation. Moreover, maintaining the process may require modification in IT infrastructure.
                                                                                                                                         

There are some alternatives methodology for implementing BPR. They are all successful cases.
Alternative 1:

Here is the methodology used in the company Visible Systems Corporation, which has been successfully performing BPR [3].

The following is the table of Strengths and Weaknesses using that approach [2]:

Strengths	Weaknesses
Use of well-balanced reengineering team	Examination of process after defining desired state
Selection of process	No clear soultion how to solve problem
Modeling of process	No evaluation
Determination of process objective	No considering of using external consultants
Room enough for own creativity
Physical design is important
Implementation aspects are considered
Almost all preliminary conditions are considered

Alternative 2: 
Here is another methodology developed by Davenport & Short [4].

The following is the table of Strengths and Weaknesses using that approach [2]:

Strengths	Weaknesses
Focused attention and way of thinking by dimensioning processes	No own thoughts relization
Specific boundaries construction	No use of teams
Measuring of current processes	No explicit explanation of understanding
IT use is an essential part	Only management decides on desired states
Prototyping before full implementation	Hard to find new radical improvements
Organizational prototyping for examining consequences on organization	Strong focus on IT causing easier solutions to be overlooked
Selection of processes that will bw reengineered	No determining necessary logical elements
	No establishment of physical design
	No guiding and managing implementation
	No evaluation
	Only some preliminary conditions mentioned and those mentioned are not incorporated in methodology

To conclude, all the methodologies have both pros and cons. Methodology used can be changed depends on the situation. But, some of the small steps are essential to success.
                                                                                                                                         
Reference

[1] http://www.dtic.mil/cgi-bin/GetTRDoc?AD=ADA415002&Location=U2&doc=GetTRDoc.pdf
[2] http://www.met-online.nl/pdf/MET12-4-8.pdf
[3] Covert, M., 1997,  Successfully performing BPR, Visible Systems Corporation
[4] Davenport, T.H. and Short, J.E., 1990, The new industrial Engineering: information technology and business process redesign, Sloan Management Review


                                                                                                                                         

Comment on http://chankl-2107.blogspot.com/2012/02/week-6-basics-of-bpr.html


"The Reference link: http://www.businessballs.com/dtiresources/total_quality_management_TQM.pdf "

I find that your reference is very useful. The concept presents in that paper is very clear. With the help of the graphics, it is easier to understand TQM, Total Quality Management.

Week6 - BPR vs TQM, BPM

Lecture 6: Basics of BPR (2)

Total Quality Management and Business Process Reengineering
In this lecture, Total Quality Management (TQM) is introduced. It is a management approach for an organization to enhance customer satisfaction by improving the quality of products and services in an incremental manner.

Although there are some differences between BPR and TQM, they both are very important to the organizational environment. TQM is a management system that aims at long-term continuous improvements in customer satisfaction and real costs. BPR, on the other hand, is the rapid and radical redesign of strategic processes to optimize the workflow and productivity in an organization [1].

The following is the table of differences between BPR and TQM:

BPR	TQM
Revolution	Evolution
Quantum improvement	Incremental improvement
Top down approach	Bottom up approach
One-shot Project	Continuous Improvement
IT based	Possibly non-IT based

So, which one has more organizational benefits? In the lecture notes, it shows that the model combining BPR and TQM has the interdependence to provide the most effective and efficient business model.

Some may say that BPR programs should be followed by TQM’s long-term continuous improvements. BPR could later be used when another dramatic change is required [2]. TQM may be a natural extension of a successful BPR program, and BPR is the turning point of a TQM initiative.

Integrated approach to organizational change, combining tools from BPR and TQM is the most likely to have more organizational benefits. TQM enables the implementation of reengineering  by providing training and communication [3]. It is the breakthrough of TQM and BPR.

                                                                                                                                         

Business Process Management

Zairi (1997: 78) defines BPM as "an approach which is dependent on strategic elements, operational elements, use of modern tools and techniques, people involvement and, more importantly, on a horizontal focus which will best suit and deliver customer requirements in an optimum and satisfactory way" [4]



And gives out seven rules:
(1) Major activities have to be properly mapped and documented;
(2) BPM creates a focus on customers through horizontal linkages between key activities;
(3) BPM relies on systems and documented procedures;
(4) BPM relies on measurement activity to assess the performance;
(5) BPM has to be based on a continuous approach;
(6) BPM has to be inspired by best practice;
(7) BPM is an approach for culture change.


Implementing BPM is a strategy that aims at gaining competitive advantages. Ptocess Aligment is the core concept in the implementation of  BPM. It involves empowering employees towards common organizational goals.

                                                                                                                                         
Reference

[1]  Raymond Manganelli and Mark Klein, The Reengineering Handbook, Amacom, 1994
[2] Gary Salegna and Farzaneh Fazel, “An Integrative Approach for Selecting a TQM/BPR Implementation Plan,”
[3] http://asqcincinnati.org/Library/qm/TQMvsBPR.pdf
[4] http://www.tandfonline.com/doi/pdf/10.1080/14783360500249836
                                                                                                                                         

Comment on http://chankl-2107.blogspot.com/2012/02/week-5.html


"To characterize the specialties of business processes, the following 7 bullet points are generally adopted: 
• Definability: It must have clearly defined boundaries, inputs and outputs 
• Order: It is constituted by a sequence of activities 
• Customer: “Customer” means the recipient of the process' outcomes (person, organization, process) 
• Value-adding: It provides value to its customer 
• Cross-functionality: It may span across organizational/ departmental boundaries
• Repeated: It is repetitive 
• Sub-processes: A business process can normally be broken down into a finite series of sub-processes "

This seven categories are very useful for characterizing the business processes and redesign the business process. As we have to redesign the business process, it would be better to get understanding of the characteristic of the process. It would result in better redesign model of the business process.

Week5 - BPR and As-Is To-Be Model

Lecture 5: Basics of BPR (1)

BPR

From the lecture this week, we know that the BPR is the way of transforming the business from the restrictions of the traditional approach by cutting across functional divisions while Information system are the fundamental ingredient of redesigned business processes.

What is B?

B stands for business. It focuses on end-to-end business process which adds business value to customers. For the mean while, more value to customers would results more profits to the organization. It helps to maximize the effective activity coordination between each tasks. Outside-in perspective would be used to think more about customers through their eyes.

What is P?

P stands for process. It is the essential processes in the workflow of an organization. The process provides the output by processing the input.Business Process is the collection of business activities that creates value to the customers. It ties to functional area, even cross-functional area to fulfill customer needs. The traditional business process model is hierarchy-based with top-down approach. This means that the business process is from the top management to operational management. It breaks down the processes and decomposes into sub-processes. Each is responsible for a specific task. It is a scientifically-based management approach provided by Frederick W. Taylor.

But now, business process is a horizontal organization process which starts and ends with customers’ needs. The business structure is more flexible and customer-centric, which means that the process will more focus on the needs of customers and the customer responsiveness will therefore be enhanced. It also increases the productivity and competitiveness of an organization.

What is R?

R stands for reengineering. It gives out quantum improvements with the support of IT  to maximize the value adding in the process. The changes of working environment, such as people skills, organizational design and structure, should well fit the reengineered processes.

                                                                                                                                         

The main idea of BPR is the transformation from the current process (AS-IS) to an improved process (TO-BE).It is is an iterative process that starts during software selection. Transforming from your current state to your future state requires planning and adjustments. 

As-Is Business Processes

This is the important part of BPR. It helps to align and understand on how things currently operate. Documenting As-Is business processes helps develop clarity on what is working well and what is broken with the current business processes. It also helps define how employees are doing their work now and the gaps between the current and future states.It helps to discover the operational pain points with a lot of analysis [1].

To-Be Business Processes

This defines your future operational model and business processes base on how you want your business processes to look in the future. In conjunction with the as-is processes, it helps you identify the gaps between the current and future. This helps to drive business improvements and accountability [1].

Eric Kimberling have mentioned 4 Key steps between As-Is processes and To-Be processes [2].

1. Software Selection. The first step is ERP selection based on business requirements. The evaluation may depends on how you understand the current business states and how the ERP can improve the business.

2. ERP Business Blueprint. After the software is selected, it is important to design the business blueprint providing the first real tangible views of how future to-be processes will look by defining new model.

3. ERP Implementation and Configuration. After the ERP business blueprint is built, the software can help to implement and customize to meet the defined business process workflow. 

4. Organizational Change Management and Training. The final stage is organizational change management and training. It provides the tools that will enable employees to bridge the gap between the as-is and to-be processes. And the change management would help in the migration by conducting organizational impact analysis, stakeholder analysis, change agents, communications, and training.

                                                                                                                                         

Reference

[1] http://panorama-consulting.com/erp-and-business-processes-as-is-or-to-be/

[2] http://panorama-consulting.com/to-be-or-not-to-be-answers-to-the-long-standing-controversy-about-erp-system-business-processes/

                                                                                                                                         

Comment on http://chankl-2107.blogspot.com/2012/02/lecture-4-business-and-isit-strategies.html


"In my opinion, there is no definate universally superior perspective for all businesses in general.  Whether certain perspective is appropriate or not for particular company depends on many factors such as the structure, culture, targets and rules of the company itself and also the industry and global environment.  In fact, the situation varies from case to case, it is hard to select the most outstanding perspective which is expected to overwhelm the others.  And each perspective does have the unique advantage, as a result, managers have to evaluate and compare carefully before making the decision of adopting which approach for their firms.
 "

I agree with you that the selection of the perspective depends on many factors like the structure, culture, targets and rules of the company itself and also the industry and global environment. Just like what I think that the selection should be based on the analysis of the current situation, the expected outcome and the requirement of the business.

Week4 - Which alignment perspective is best ? (SAM)

Lecture 4: The Strategic Alignment Model

Strategic Alignment Model
In early 1960s, many companies didn't understand how the IT Strategy works.Until now, some small companies still don't believe IT Strategy can help the company operates more efficient.

In this week, Helen has introduced the Strategic Alignment Model (SAM) which was first introduced by Henderson and Venkatraman in 1999. It is quite new and has become the base of Business/IT Alignment theories [1].

Strategic alignment model (Henderson and Venkatraman, 1999: 476).

There are four quadrants in the SAM, Business Strategy, IT Strategy, Business Infrastructure and IT Infrastructure. The vertical linkage is strategic fit which means determining the infrastructure by using strategy. The horizontal linkage is functional integration which is related to the alignment of business and IT. Henderson and Venkatraman said that it is difficult to realize the value from IS/IT investments due to lack of alignment between business and IT/IS strategies.

[3] SAM alignment perspectives

Strategy Execution (yellow line)
In this perspective, the anchor is business strategy. The weak area is the business infrastructure, which is what needs to be changed. The result of impact is the IT infrastructure. The IT architecture must be undergoing changes due to the changes in business processes. This perspective focuses on IT planning or transformation of the business to achieve reducing delays and errors, enhancing services and saving time. [2]

Technology Potential (red line)
This perspective is driven by business strategy with the support of IT strategy. This results the impact in the IT infrastructure. This shows the value of IT contributing to the business’ outcome. The relationship between the business and customers is important. [2]

Competitive Potential (green line)
The anchor in this perspective is IT strategy with the support of business strategy and business infrastructure is the impacted result. This focuses on how emerging new technologies can help new business strategies. This results in bringing competitive advantages to the business. [2]

Service Level (blue line)
In this perspective the anchor is IT strategy with the help of IT infrastructure, and impacting business
infrastructure. This focus on how IT can improve the products and services are delivered, and also the businesses processes. Moreover, this perspective can result in IT outsourcing. [2]


Which alignment perspective is best ?
In my opinion, there should be no the best alignment perspective. which alignment perspective is best should be in accordance with the current situation and the expected outcome. Since different perspectives have different functions. The alignment perspective chosen should be based on the requirement of the business.


                                                                                                                                         

Reference
[1] http://businessitalignment.wordpress.com/2010/12/17/the-strategic-alignment-model-of-henderson-and-venkatraman/
[2] http://sais.aisnet.org/2006/Coleman-SAIS2006-paper.pdf
[3] http://www.12manage.com/methods_venkatraman_strategic_alignment.html

                                                                                                                                         

Comment on http://chankl-2107.blogspot.com/2012/01/week-3-strategic-framework-and-bpr-for.html


"After the environmental scan, managers have to decide whether they have to work on the internal or external environment.  If for the former one, SWOT should be used; if for the later one, either PEST analysis or SWOT could be used. "

I agree with you that the SWOT analysis should be used for the internal environment. However, for the external environment, I think both PEST analysis and SWOT analysis should be used at the same time to get a better analysis result. Because PEST analyses the marco-external environment while SWOT analyses the micro-external environment. They have a little bit different in meaning. It is better to do both analysis to get all-round result.

Week3 - The Strategic Framework and implementation of BPR

Lecture 3: The Strategic Framework and BPR for e-Business

Application of BPR
In the tutorial this week, Luke has mentioned that some popular BPR tools. One example is "Ultimus BPM". The software provides the tools for modelling workflow to generate a process map and then connect the process map with IT system to automate the workflow. Also, it helps to analyze the workflow management and the efficiency and keep pace with the change of business objectives [1].

After reading the functions of BPR, I know that BPR can provide many tools to make the business process easy to go and help to achieve the business objectives. However, it may be failed.Some have estimated that there are as many as 70% BPR projects fail [2]. It means that BPR is not always good.
                                                                                                                                         

Factor to be success
Majed Al-Mashari and Mohamed Zairi have suggested that 5 dimensions of change related to BPR implementation[3].

(1) change management;
(2) management competency and support;
(3) organisational structure;
(4) project planning and management; and
(5) IT infrastructure.

I think some factors to success are very important:

• Effective Communication - It is important to have communication internally while managing the business with BPR. It is used to ensure the understanding the changes and situation.
• Training and Education - As BPR may be new to some companies, especially the staff. Therefore the staff needs the training for using BPR although it may increase the budget.
• Effective use of project management techniques - managing effectively can provide a smoothing flow of the process in redesign stages.

Recognizing the current situation is the way for planning, therefore, we have PEST analysis and SWOT analysis. The objective of PEST is to analyze the external marco-environment for the business while the SWOT analysis is to analyze both external micro-environment and internal situation. If we have recognized the current environment and situation well, the probability of success will be increased.
                                                                                                                                         

Internal Context
Sullivan has presented a matrix that explains the effect of external strategic environmental forces. The tow axes are infusion (the degree of dependency on IS/IT to manage business) and diffusion (the degree of decentralization of IS/IT control) [4].

The systems in the backbone part of the matrix may face the serious problem when the systems fail. Because of the highly centralized control and high IS/IT dependency, the quality of the system is very important. However, it is still the most famous model.

For the opportunistic region, it requires managers having ability to satisfy the local priorities as the system is not centralized. It is not overall business or IT design, user to user cooperation may be needed when system integration.

The complex section in the matrix is the most difficult one to manage as the systems are not centralize and the business is highly depend on the systems.
                                                                                                                                         

Reference
[1] http://www.ultimus.com/BPMSoftware/

[2] Barbara J. Bashein, M. Lynne Markus & Patricia Riley, "PRECONDITIONS FOR BPR SUCCESS And How to Prevent Failures", Information Systems Management, Volume 11, Issue 2, 1994

[3] Majed Al-Mashari, Mohamed Zairi, (1999) "BPR implementation process: an analysis of key success and failure factors", Business Process Management Journal, Vol. 5 Iss: 1, pp.87 - 112

[4] http://www.docstoc.com/docs/59556013/John-Ward-and-Joe-Peppard-book-3rd-edition

                                                                                                                                         
Comment on http://chankl-2107.blogspot.com/2012/01/week-2-business-strategy-and-isit.html


"Since the business strategy is the integrated action set for long-term to get more advantage than the competitors, it is the only method to keep the company operate smoothly and survive."

I agree with you that the strategy planning is for the long term advantage of a company. But, competitor may also use BPR to plan the strategy. Therefore, it may not get more advantage than the competitor. However, it may be the only method to smooth the business process as you said.

Week2 - Business and IS/IT Strategies

Lecture 2: Business and IS/IT Strategies

Why we need Business and IS/IT Strategies?

• Organizations are not responsive enough to the changing Business environments
• Business Processes are not taking full advantage of technologies
• Too Much time and money are wasted

Therefore, the enterprise business processes need to be changed to cater to the changing business environment, for example, technologies and business objectives.

                                                                                                                                         

The Relationship among Biz, IS &IT Strategies

From the figure, we can see that business activities can be categorized into 3 levels, Strategic level, Tactical level and Operational level. In short, they can be represented by Why, What and How.

Refer to the Lecture Note P.7, 26

Business strategy is in the strategic level, it helps an organization to make business decision, find out objectives and direction, and change according the requirement of environment. Moreover, it helps to develop options for the changes.  It is necessary to recognize the need for change in development of business strategy. That is where and why the business going.

IS strategy is in the tactical level, it supports the business strategy by focusing on the applications, demand and business. It means that it helps to find out what is required in the business strategy. Actually, it is the evaluating process of the options.

IT strategy is in the operational level, it provides infrastructure and services to the tactical level and focuses on the technology, supply and activity. It is actually the implementation of the options chosen in the strategic level. That’s how it can be delivered. 

                                                                                                                                         


The execution steps of BPR

Refer to supplementary reading:  Successful Reengineering Demands IS/Business Partnership

WebCT link: Reading: Martinez-SloanMReview-1995

1.       Redefine the role of IS – identifying the needs for change.

2.       Assess current capability – planning for migrating to reengineered processes, investigating and analyzing the infrastructure of the business.

3.       Develop a strategy and architectures – developing data strategy and architecture and analyzing new technologies.

4.       Develop a master plan – preparing well-thought plan for balancing and ensuring the control of resources and critical paths.
5.       Execute and manage – ensuring IS follows the plan to achieve the objectives.For reengineering success, business leaders and IS must work together to strike a balance.

                                                                                                                                         

Reference

[1] http://www.jiscinfonet.ac.uk/InfoKits/system-selection/ss-define-1.3