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Implementing business process re-engineering.

Introduction

This checklist provides an outline guide, as a synthesis of best practice, to the key stages in implementing Business Process Re-engineering (BPR).

Successful re-engineering requires a clear understanding that:

a) organisations should be process- not function- driven;

b) processes must be built around the customer; and

c) staff involvement at all stages of design, planning, implementation and maintenance is a prerequisite for success.

Although there have been many BPR-driven successes, there has also been criticism of the relatively high failure rate as well, where companies have not obtained the expected results. Reasons put forward for failure include: confusing downsizing with changing the way things are done; too much emphasis on reducing staff, poor redesign of processes; continuing with a departmental, rather than a processdriven, customer-focused culture; introducing new technology in isolation; and, most critically, failing to involve staff at every stage.

National Occupational Standards for Management and Leadership

This checklist has relevance to the following standards:

C: Facilitating change, units 4, 5, and 6

F: Achieving results, units 3, 7, and 10

Definition

Hammer and Champy, two of its leading exponents, have defined BPR as:

"The fundamental rethinking and radical design of business processes to achieve dramatic improvements in critical contemporary measures of performance, such as cost, quality, service and speed."

Re-engineering is, therefore, a way of initiating and controlling change processes through imaginative analysis and systematic planning.

A process can be defined as a series of linked activities that transform one or more inputs into one or more outputs.

In 2001, Hammer restated that BPR is just as valid today as it was ten years ago. He added, however, that in light of experience gained, re-engineering on its own is not nearly sufficient. It has to be complemented by a range of other changes, for example, to performance measures and pay systems that encourage a focus on corporate, rather than departmental, objectives, to putting customers at the centre of all processes, to shared responsibility and empowerment, and to moving away from confrontation towards building collaborative partnerships with suppliers and even competitors.

In any change programme the human issues are as critical as the changes to the processes themselves.

The improvements in process quality to be gained from BPR lie in three dimensions--process efficiency (e.g. cost, cycle time), product quality (e.g. customer satisfaction, scope and quality of product) and reduced product development time.

Action checklist

BPR comprises a sequence of successive, integrated activities.

1. Develop the vision

Create a grand, clear vision. Thinking big and bold is the essence of BPR. This must, however, be rooted in the real world. Questions to ponder are - What are we in business for? Where are we now? Where do we want to be in, say, five years? How do we get there? Who and where are our customers?

Draw up an outline strategy with ambitious but achievable goals for the organisation. Use appropriate survey techniques to listen to customers, benchmark the competition and analyse existing skills and competences throughout the organisation. Identify gaps between what is currently available and what will be needed in terms of skills, investment, IT and other resources.

2. Map or model existing processes

Map or model and document current processes and workflows in detail if necessary. An understanding of the strengths and weaknesses of existing processes and systems, e.g. bottlenecks or discontinuity, will be of immense benefit when planning new ones. This should also reduce the possibility of past inefficient practices being perpetuated. The views of the owners of existing processes will help in this analysis.

The map or model should identify what new or revised IT systems are required, and the skills, competences and knowledge required by the end users of each process.

3. Redesign the new processes

Using the vision, mission and strategy as a guiding framework, start with the needs of the customer and re-design the processes from outside-in. Apply the following guidelines to the redesign process:

* Identify the business processes required to produce key business outcomes and show clearly how processes interrelate.

* Identify all the inputs required for each process--raw materials, staff, Skills and competences, IT support, equipment.

* Lay out the infrastructure required to support the changes by describing the:

--management strategy, measurement systems and reward programmes.

--organisational values and individual belief systems that need to be adopted by all.

* Improve customer service through genuine empowerment, trust and delegation of responsibility, allowing partnerships to develop with customers and suppliers.

* Ensure that processes transcend, and are not hindered by, departmental boundaries.

* Involve all staff, especially those at the sharp end--the users of the processes.

* Involve key external partners, such as suppliers, if their operations will be affected.

* Schedules, budgets, completion criteria and economic justifications all need to be specified.

* New control systems need to be established.

* Contingencies are needed to allow for delays or unforeseen problems.

* Allow for changes in physical location or layout, work flows and organisation structures, plant and IT systems, testing and pilot projects and a redefinition of roles and responsibilities that will result from the process.

4. IT support systems

Most changes of any significance are likely to be underpinned by changes in IT systems. Research indicates that one of the prime causes of the failure of new IT systems to delivering the expected results is ignoring the human element. In the same way that processes should be built around the customer, IT should be built around the end users--the internal customers. The following need to be considered:

* New IT systems should be designed to support all the new processes, which should not have to be shoe-horned into ill-fitting programmes.

* IT procedures should be easily understood, mastered and exploited by end users: hence the need to involve them in the design process at the earliest stages. Much thought needs to be given to the skills, competences and training needed to operate the new systems.

* IT should help to facilitate the achievement of individual, departmental and corporate goals.

* The new system may need to be tested in parallel with the existing, possibly for many months. This creates extra pressure on the whole organisation.

5. Establish performance indicators

Improvements in performance can only be identified if you know where you are starting from.

Select a balanced mix of traditional hard financial and other measures and some softer measures, such as the number of new customers gained or lost, repeat orders, number of complaints, and attitudes to customers, levels of staff morale, job satisfaction, new skills learned and so on. Make sure that the three dimensions of process efficiency, product quality and product development times are carefully measured. Reward systems may need to be re-aligned to corporate objectives as well.

6. Plan the implementation

* Appoint a project co-ordinator or team.

* Decide if implementation will be carried out in one major effort or in two or more phases.

* Decide on a start and finish date. If possible choose slack periods.

* Decide which existing and new processes and systems will be run in parallel before old ones are dropped.

* Prepare a detailed, prioritised day-by-day schedule for key staff and an outline plan for everyone else.

* Ensure that key staff are fully briefed and that training has been given where appropriate.

* Ensure that key external partners, such as suppliers, are fully briefed as to how, and from when, the changes will affect their operations.

* Notify key customers and other key partners that normal service will be resumed as soon as possible. Put details on the corporate web site (if one), with contact names and details.

* Allow sufficient time for testing, settling in, tweaking, trouble- shooting and general "hand- holding". This is likely to be a particularly stressful time to those at the sharp edge.

* Issue regular progress reports.

7. Review and maintenance

The performance indicators should provide a comprehensive overview of how well the new organisation is doing, and may identify areas or activities for further development, particularly those not meeting strategic objectives. Allocate adequate resources for continuous maintenance.

8. The human element

Redundancies may result from the planned changes. Keeping staff informed at all stages reduces the risk of rumours with their inevitable long-term negative effects on morale, fear of further job losses, resistance to change, and general uncertainty. Redundancies may well result from the planned changes. Clear policies should be in place for the two groups of staff affected--those being made redundant (if any) and the "survivors". Issues to consider include:

* The fair and equitable selection of those who may be made redundant and associated support programmes, including redeployment within or outside the company, counselling, job hunting, and redundancy packages.

* The need to demonstrate strong commitment to survivors by rebuilding their confidence, commitment and loyalty through retraining programmes covering the new shape of the organisation, new processes and new IT procedures, and new performance and pay systems. Indicate what further training and development, counselling and other forms of support. are available. Reassure staff on a regular basis.

Managers should avoid

* Going for BPR simply because everyone else is doing it.

* Confusing BPR with downsizing.

* Assuming you are on the right BPR track merely by introducing the latest IT.

* Focusing on individual tasks at the expense of the overall process.

* Embarking on change projects without resources and support to complete--and maintain--them.

Additional resources

Books

Reengineering the corporation: a manifesto for business revolution, 2nd ed., Michael Hammer and James Champy

London: Nicholas Brealey, 2001

Reengineering at work, 2nd ed., Michael Loh

Aldershot: Gower, 1997

Practical guide to business process reengineering, Mike Robson and Philip Ullah

Aldershot: Gower, 1996

Process improvement: a handbook for managers, Sarah Cook

Aldershot: Gower, 1996

Process reengineering in action: a practical guide to achieving breakthrough results, Richard Y Chang

London: Kogan Page, 1996

This is a selection of books available for loan to members from the Management Information Centre. More information at: www.managers.org.uk/mic
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Title Annotation:Checklist 008
Publication:Chartered Management Institute: Checklists: Operations and Quality
Geographic Code:4EUUK
Date:Jun 1, 2006
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