Explain BPR? When to take BPR ?

Davenport &Short (1990) define business process as a set of logically related

tasks performed to achieve a defined business outcome.
Hammer (1990)
h a s d e fi n e d B u s i n e s s P r o c e s s Re e n g i n e e r i n g the fundamental reth
inking and
radical redesign of business processes to achieve
dramatic improvements in critical, contemporary measures of performance,
such as cost, quality, service, and speed
.This definition comprises four keywords: fundamental, radical, dramatic and
processes.
Keyword 1:
Fundamental
Understanding the fundamental operations of business is the first step prior to
reengineering. Business people must ask the most basic questions about their
companies and how they operate: Why do we do what we do? And Why do we do
it the way we do? Asking these basic questions lead people to understand the
fundamental o p e r a t i o n s a n d t o t h i n k w h y t h e o l d r u l e s a n d
a ssu mp ti on s exi st. O fte n , th e se rul e s an d as su mp ti on s a re
inappropriate and obsolete.
Keyword 2:
Radical
Radical redesign means disregarding all existing structures and procedures, and
inventing completely new ways of accomplishing work. Reengineering is
about business reinvention, begins with no assumptions and takes nothing
for granted.
Keyword 3:
Dramatic
Reengineering is not about making marginal improvements or modifi cation
but about achieving dramatic improvements in performance. There are three
kinds of companies that undertake reengineering in general. First are companies
that fi nd themselves in deep trouble. They have no choice. Second are
companies that foresee themselves in trouble because of changing
economic environment. Third are companies that are in the
peak conditions. They see reengineering as a chance to further their lead over their
competitors.
Keyword 4:
Processes

The final keyword Process, though the most important in the definition, is the one
that gives most corporate managers the greatest difficulty. Most business people
are not process-oriented; they are focused on tasks, on jobs, on people, on
structures, but not on processes.

BPR is done by
1.Companies at its declining stages
.2.Companies in its stable stages.
3.Companies in their peak stages.
Difference between continuous improvement and BPR Difference between
continuous improvement and BPR
Continuous improvement is an approach to improving the competitiveness,
effectiveness and flexibility of a whole organization. It is essentially a way of
planning, organizing and understanding each activity, and depends on each
individual at each level. CONTINUOUS IMPROVEMENT involves placing the
customer as the focal p o i n t o f o p e r a t i o n s . I t s a i m i s t o c o n t i n u o u s l y
i mp rove p ro ce ss pe rf orm an ce i n ord e r to s ati sfy
cu s tome r re q u i re me n ts. At th e cen te r of TQ M i s th e con ce p t of the
m a n a g e m e n t o f p r o c e s s e s , a n d t h e e x i s t e n c e o f internal suppliers and
customers within organizations.
BPR a l s o e m p h a s i z e s f o c u s o n t h e p r o c e s s . H o w e v e r , B P R i s
m u c h m o r e r a d i c a l t h a n C O N T I N O U S I M P R O V E M E N T. Q u a l i t y
ap p roa ch e s c on ce n trate on i mp rovi ng exi sti ng p roce s se s; p roce s s
re e n g in e e rin g st arts f rom scr at ch to c re ate ne w p ro ce sse s wi th ou t
the constraints of existing methods, people, technology,
man ag e me n t sy ste ms, or org an i z ati on al stru ctu re s. The m aj or
d i ff e r e n c e s b e t w e e n q u a l i t y i m p r o v e m e n t a n d p r o c e s s
re e n g in e e rin g ap p roa ch e s a re p ro vid e d b y Ch an g (1994) i n the
following table:

Relationship Between BPR and Information Technology Relationship

Between BPR and Information Technology
Information Technology (IT) refers to the capabilities offered by computers,
software applications, and telecommunications.
(Davenport &Short, 1990) Hammer (1990) c o n s i d e r s I T a s t h e ke y e n a b l e r
o f B P R , w h i c h h e c o n s i d e r s a s " r a d i c a l c h a n g e . " H e prescribes the
use of IT to challenge the assumptions inherent in the work processes that
have existed since long before the advent of modern computer and
communications technology.
Davenport &Short (1990) argue that BPR requires taking a broader view of both IT
and business activity, and of the relationships between them. IT and BPR

have recursive relationship. IT capabilities should

support b u s i n e s s p r o c e s s e s , a n d b u s i n e s s p r o c e s s e s s h o u l d b
e in terms of the capabilities IT can provide.
Davenport &Short (1990) r e f e r t o t h i s b r o a d e n e d , r e c u r s i v e v i e w o f
I T a n d B P R a s t h e n e w i n d u s t r i a l engineering. In order to more
eff ectively respond to BPR, IT must play a more active role throughout a
BPR project. IT must:
Increase their level of participation in all areas of a BPR initiative;
Provide key information regarding automated processes to business analysts;
Build a transition strategy that meets short and long-term retooling requirements;
Enforce the integrity of redesigned business processes in the target system;
Reuse business rules and related components that remain constant in a target
application. Factors driving a BPR project can include improving customer service,
streamlining processes to cut costs, or addressing inefficiencies in other high impact
areas. For example, customers frustrated with having to speak to multiple
individuals regarding an insurance claim may switch to the competition. To address
this problem,
ani n s u r a n c e p r o v i d e r d e t e r m i n e s t h a t s e r v i c e f u n c t i o n s m u s t b e c o
n s o l i d a t e d t o o n e p o i n t o f c o n t a c t . T h e underlying systems that manage
claims handling do not support single point of contact processing. In this case,
legacy systems have become a barrier to the success of the BPR initiative. The
relationship of BPR analysis and IT is reciprocal because business and
technical analysts must devise a continuous feedback communication loop
for projects to work. This is particularly critical because current systems
analysis helps articulate the as-is business model while the redesigned
business model dictates the impact BPR has on existing information
architectures. Once this reciprocal cycle is in place, IT can determine exactly how
to upgrade, redesign, or replace selected systems in order to implement
reengineered business processes. Figure one highlight key steps in a retooling
strategy. Finally, Attaran (2003) categorizes IT roles in BPR into three phases:
Phase 1:
Before the process design (as an enabler)
Create infrastructures and manage information that support evolving organization
Foster process thinking in organizations
Identify and select process for redesign
Participate in predicting the nature of change and anticipate the information
needs to support that change
Educate IT staff in non-technical issues such as marketing, customer relationships,
etc.
Participate in designing measures of success/failures of reengineering
Phase 2:
During the process design (as a facilitator)
Bring vast amounts of information into the process
Bring complex analytical methods to bear on the process
Enhance employees ability to make more informed decisions with less
reliance on formal vertical information flows
Identify enablers for process design
Capture the nature of proposed change and match IT strategy to that change
Capture and disseminate knowledge and expertise to improve the process

Communicate ongoing results of the BPR effort

Transform unstructured processes into routinized transactions
Reduce/replace labor in a process
Measure performance of current process
Define clear performance goals and objectives to drive the implementation
Define the boundaries and scope of the process
Phase 3:
During the implementation (as an implementer)
Create a digital feedback loop
Establish resources for critical evaluation of the reengineered process

Activity (9)