Business Process Re-

Engineering
 What is Reengineering?
 Some common descriptions about what it is
and what it is not.
 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
 Definition of Reengineering

The FUNDAMENTAL rethinking and

RADICAL redesign of business
PROCESSES to achieve DRAMATIC
improvements in critical, contemporary
measures of performance, such as
cost, quality, service and speed.
 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.
 ignore what is and concentrate on what
should be.
 start with no assumptions; no givens.
 Radical
 means root
 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

 not business modification

 Dramatic

 “blowing up the old and replacing it with

something new”
 not marginal or incremental improvements

 achieving large and significant improvement

is the objective in reengineering
 redecoration verses demolition and
reconstruction
 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.
Eg.
 registration process

 passport issuing process

 book check-out process at the library

 What BPR is not ?
 automation (more efficient way of doing the
wrong things!!!)
 Restructuring

 Downsizing

 Reorganizing

 de-layering or flattening an organization

 total quality management or quality

improvement (although both TQM and BPR
share common themes)
 BPR is not TQM

Total Quality Management Business Process

Reengineering

TQM BPR
Degree of Change Incremental Radical
Starting point Existing process Clean Slate
Frequency of change Continuous One Time
Time required Short Medium to Long
Inception/Participation Top Down/Bottom Up Top Down
Risks Moderate High
Type of Change Cultural Cultural & Structural
 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 process—a 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
turnaround time
 Applying BPR
 installed a control desk to answer salespersons’s
questions
 added more time to the process

 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
 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
 developed a new computerized system to support
the deal structurers
 the system was fine for most situations
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!!!