• BPR – Business Process Reengineering

• “Restructuring & transforming a business process by a rethinking and redesign to achieve

dramatic improvements cost, quality, speed…”

• Combines strategy of promoting innovation and strategy of making major improvements to

make the firm much stronger and more successful competitor

• Tough task; chance(s) to success / failure of companies

BPR : SBI’ s Computerized Network:

• Interconnect all branches

• Customer can approach any branch for their transactions

• Easy and Instant transfer of money - NEFT (National Electronic Fund Transfer)

• Immediate transfer of accounts from one branch to another

• Internet banking facility

• No queue for bills payment

• Powered by core banking solution, online payment facility for mobile bills, electricity bills,
credit card bills… made available

• Use of ATMs…

SBI to open digital bank in malls, will offer

instant loans
THE HINDU , Jul 1, 2014
MUMBAI: The 208-year-old State Bank of India
(SBI) is creating a digital bank within the
institution in a bid to stay relevant to a generation
that's grown on social networks and demands
instant gratification. The new electronic banking
outlets will be situated in malls and will open
accounts, issue cards and sanction loans across the
counter.

With a network of 13,000 branches, the country's

largest bank has held on to market share as it
continued to grow its network. But new private
banks are gaining valuations disproportionate to
their size as investors expect them to grow more
efficiently than public sector banks. "To continue
to remain the market leader we have to
periodically reinvent ourselves.

She added that the bank had looked at successful

models across the world, including a Portuguese
bank and an Irish bank. SBI's digital banking
initiative is an outcome of SBI's mandate to
Accenture four months ago. The consultancy firm
was roped in to create a sub-brand that would
provide new-age consumers a completely
different banking experience.

The turnkey** contract included everything from

conception to design as well as staff training.
(Accenture is a global management consulting,
technology services and outsourcing company. It
helped the bank in designing the branch layouts,
implementing the digital processes and technology
at the branches, and providing back-end
integration, including training employees. “This is
the bank differentiator. This is something which
is quite innovative.)
The consultancy firm has roped in designers from
UK to suggest the look for the branches as well as
staff uniforms.

The first lot comprising of 7 pilot digital

branches will be opened largely in high street
malls in various cities on July 1, Tuesday. The
banking stores are supported by self-service touch
devices, which enable instant account opening
with an instant debit card. Customers will have
access to remote experts through high definition
videos.

SBI Launches New Digital Online And

Self-Service Banking Solutions:
The sites are equipped with interactive wall and
table displays as well as high-definition
videoconferencing systems that enable customers
to talk to remote experts. Multi-function kiosks
provide services such as instant account opening
with personalised debit cards, and instant in-
principle approvals for home, car and education
loans.
 Arundahti Bhattacharya, Chairman, SBI

“…Banking today has to be sold, which is why we

have decided to be in the malls….,"
“…SBI targets young customers with digital
branches….”
“…more than half of India's massive population
under the age of 25, businesses have to adapt their
services to meet the expectations of the "digital
demographic…"
“…..once the eKYC (Know Your Customer
through electronic documents such as Aadhar…)
process is completed, the customer will get a
personalised debit card with a chip in it….”
“…Depending upon the response we get, we will
expand. We will also have a smaller version of
these branches in malls. There will be little bit of
variety in the branches we open…,”
S K Mishra, deputy MD, SBI, adds: "InTouch is
the start of SBI's Digital journey. This is our
attempt to put our brand in touch with the dreams
of the aspirational customer."
Questions to be asked / checked for BPR:
• What are the objectives of the process ?
• Are these objectives in line with the corporate
objectives ?
• Do you need the process ?
• What value does it add to the corporate
mission, vision or strategy ?
• Who are the customers of the process ?
• What are the customers requirements ?
• Does the process meet the customers
requirements ?
• Who else could do it ?
• Is the responsibility located correctly ?
• What problems does the process have in
meeting its customers needs?
 • Who are the suppliers of the process ?
• Have told them the requirements of the
process ? Are these correct ?
• Does the suppliers meet the specified
requirements
• Is the process efficient ? - Value Engineering /
Analysis
• Is there any waste in the process ? - How can
we eliminate it ?
• Who is responsible for the process ?

Areas of Improvement by BPR:

• Strategy & Business Plans
• Organisation Structure
• Business Process
• Business Information Technology
• Organisation Culture
Principles of BPR (Process):
• Externally, focus on end customers and the
generation of greater value for customers.
• Give customers and users a single and
accessible point of contact through which they
can use whatever resources and people are
relevant to their needs and interests.
• Internally, focus on activities which deliver
value to customers.
• Encourage learning and development by
building creative working environments.
• Concentrate on flows and processes (including
communication) through the organization.
• Remove non-value added activities
• Undertake parallel activities
• Speed up response and development times
• Concentrate on outputs rather than inputs
• Give priority to the delivery of value rather
than the maintenance of management control.
• Keep the number of core processes to a
minimum (approx. 12).
• They all should be directed to external
customers.
• Ensure that continuous improvement is built
into implemented solutions.
• Network related people and activities. Virtual
corporations are becoming commonplace in
some business sectors.
• Implement work teams and case managers
extensively throughout the organization.
• Move discretion and authority closer to the
customer,
• Re-allocate responsibilities between the
organization, its suppliers and customers.
• Encourage involvement and participation.
• Ensure people are equipped, motivated and
empowered to do what is expected of them.
• Improve planning skills.
• Work should be broadened with the expertise
in strategic areas.
• Avoid over-sophistication. Don't replace
creative thinking with software tools.
• Build learning, renewal, and short feedback
loops into business processes.

• Organise around outcomes, not tasks

• Identify all the processes in an organisation
and prioritize them in order of redesign
urgency
• Integrate information processing work into the
real work that produces the information
• Treate geographically dispersed resources as
though they were centalised
• Link parallel activities in the workflow instead
of just integrating their results
 • Put the decision point where the work is
performed and build control into the process
• Capture information once and at the source

Dimensions of BPR
Physical Technical Layer
More
concrete , Process Technology Organization
easiest to Structure Structure Structure
change

Infrastructure Layer
Reward Measurement Management
Structure Systems Methods

More Value Layer

difficult to
change, Organizational Political Individual Belief
less Culture Power Systems
concrete

1.The Physical /Technical Dimensions:

• are what people can easily see and do; This
include:
a. Process structure: consists of the business
processes, outcomes, policies, practices and
procedures that support the processes. (process
structure is what, when and how work is
performed)
 • Process can be triggered by internal events,
timing cycles, or external stimuli.
• Some processes originate by designs, others
may emerge informally to meet real or
perceived organizational needs (that is why
we need business process reengineering).
• No single organization has the same processes

b. Technology structure: which consists of the

automated communications, networking, and
computer systems used to support the process
structure.
• The sensible application of technology
depends on the competent integration of
technology with work processes.
c. Organisation structure: Defines who performs,
manages and is accountable for each business
process
• When process and organisation structures are
out of alignments, there are gap(s) in
accountability
2.The Infrastucture Dimensions:
• Refers to interpretation of policies and
procedures which heavily influences how the
physical / technical dimensions on a day-to-
day basis
• When the physical / technical dimensions
change, the infrastructure must also change
because they reinforce desired performance
operational behaviour
a. Reward structure: Regulates behaviour
• Rewards may be formal / informal / financial /
recognition based – Ideally well designed jobs
provide a work environment that is rewarding
in and of itself
b. Measurement systems: Defines the feedback
that provide information on process
performance
• Enalbes people to improve process
performance
• Must deliver appropriate information
• Should cover the need for change
 • Should be made available directly and
simultaneously to process performers and
managers
Management methods: Consist of the practices
and techniques used to supervise, develop and
support the people who perform the business
processes
• It is one of the most neglected in renegineering
because it is seen outside the project scope
• Managers and supervisors must understand
and learn how to support the new environment
so as to gain benefits from the reengineering
process
3.The Value Dimensions: Define the
organisation’s culture and drive behaviour.
Leadership and improvement philosophies must
emerge from these dimensions
a. Organisational culture: Consist of the
collective rules of the organisation
• Can be seen through the organisation’s
language,symbols, myths and rituals…
 • Defines what is important to the organisation
• Changing embedded corporate value is
perhaps the most powerful form of change
b. Political power: Refers to individual who
manipulate and shape the actions and behaviours
of others
• Both formal / informal leaders use power to
broadcast and reinforce power
• Formal authority – acquired through the
position held in the organisation
• Personal power – acquired through expertise,
knowledge or connections
c. Individual belief systems: Refers to the
attitudes and mental models that individuals apply
to themselves, those they work with and the work
itself
• Examples of mental models : Impatience,
skepticisms, openness, control, rigidity and
flexibility…
 • Aligning the value dimensions to support the
reengineeed organisation requires organisation
executives to demonstrate leadership

Customer Focus:
• Customer service oriented process – aims to
eliminate custoemer complaints
Speed:
• Compression of time taken to complete key
business processes (May be from 5 hrs to 4
hrs…)
Compression:
• Cutting the major tasks of cost and capital
throughout the value chain
Flexibility:
• Adaptive processes and structures to changing
conditions and competition – spot weak points
and adapt to new requirements of the market
Quality:
 • Quality is always controlled and monitored by
the processess
Innovation:
• Leadrship through imaginative change
providing to organisation competitive
advantage
Productivity:
• Improce effectiveness and efficiency

• The term “BPR” was intriduced in 1990 by

Prof. Michael Hammer in his one of the
articles to Harvard Business Review (HBR)
• Focused on “Most of the work being done
does not add any value for customers, and
this work should be removed, not
accelerated through automation. Instead,
companies should reconsider their inability
to satisfy customer needs, and their
insufficient cost structure”
• After his concept, all the Management
Philosopers, Authors, Researchers,
Practitioners… realised and thought that the
rethinking and redesigning of business process
wiould be helpful to dramatically improve
metrics of performance of business such as
quality, cost, speed and service
• The technique aims to deconstruct a
company’s core processes and reassemble
them in such a way as to make them a lot more
efficient
• James Champy, his colleague always said that
it is about more than just processes
• They stated that it applied to all the parts of a
company and that its purposes were a lot more
higher
• In 1993, BPR trend had been made more than
60% of the companies to take up Re-
ngineering efforts or have plans to get into.
• More recently, the concept of Business
Process Management (BPM) has gained major
attention in the corporate world and can be
 considered a successor to the BPR ….
(Process effieciency supported by I.T)
Suggested the following Key elements:
• Refocus their company’s values according to
what customers actually need.
• Redesign their core processes. For this step,
managers should use information technology
which enables improvements.
• Reorganize their business into a cross-
functional team. Every team they create must
have an end-to-end responsibility as far as one
process is concerned.
• Rethink basic issues that have to do with
people and organization.
• Improve their entire business process across
the whole of the company.
 Preparation & Coordination: (Developing Vision & Mission Statements)
Set the Vision:
• Business Need Analysis
• Must understand the process which needs chages
• Clear Vision gives role / goal to the employees
• Development of Organisational Learning Agenda
Assemble the BPR Team:
• No Companies can do Re-engineering process; People do….Can consist of internal employees,
consultants, or a mix of both to conduct the reengineering
Considerations:
• Should the team be responsible for the BPR in its entirety?
• What experience and background should team members have with respect to the company
or the field?
• Should the team be a smaller core group or a larger contributor group?
• How much autonomy does the team have with decisions?
• Should the team include members outside of the company?
Specific Members of BPR Team (Hammer & Champy):
 Leader
 Process Owner
 Re-Engineering Team
 Steering Committee
 Re-Engieering Czar

Key Roles of Specific Members of BPR Team (Hammer & Champy): -

 Leader : A senior executive who authorizes and motivates the
overall reengineering effort
 Process Owner: Manager with responsibility for a specific process
and the reengineering effort focused on it
 Re-Engineering Team: Group dedicated to reengineering of a
particular process, who diagnose the existing process and oversees
its redesign and implementation
  Steering Committee: Policy making body of senior managers who
develop the organization’s overall reengineering strategy and
monitor its progress
 Re-Engieering Czar: Individual responsible for developing
reengineering techniques and tools within the organization and for
achieving synergy across the organization's separate reengineering
projects – Act as Leader’s Chief Staff

• Identifies any processes, sub-processes, costs and labor that are not required in an
organization
• Not only highlights the deficiencies of a procedure but also shows areas where business is
incurring costs without getting required returns
• Improves the communication within the enterprise and also enhances the quality of internal
management reports
• Provides management an opportunity to understand the systems of their business in more
detail
• (Makes Business as more pro-active) Provides an insight of business analysis to management
which can help in future decision making with the strengths and weaknesses of the business
and business’s ability to adapt and respond towards the changes in external environment
• Provides long term solutions to minimize the deficiencies of a business
• Focus to take short-term damage control measures but specifically to initiate a long-term
plan for the improvement in efficiency, capability and effectiveness of the organization
• Meet the customer needs and maintain product value
• However, BPR does not directly affect the customer satisfactions but it provides
organizations room for improvement
• As the non-value adding costs are minimized, businesses can improve the quality of products
and services by inducing or shifting these costs to the parts that ultimately add value for the
customers…..

• The concept of BPR is simple to discuss but its practical implementation is very difficult
• May consume more time due to detailed process analysis
• BPR requires monetary assets and also consumes much more time and human resources.
• May not suit to every business, and the size, availability of resources for every business are
different - BPR usually benefits large organizations
• Delay in achieving results - As BPR focuses majorly on the long term revenue synergies, this
approach does not provide immediate results
 Role of Leaders in BPR :

• The reengineering leader makes reengineering happen

• This is a senior executive with enough power to cause an organization to turn itself inside
out and upside down and to persuade people to accept the radical disruptions that
reengineering brings
• In case of absennce of a leader, no reengineering will actually happen
• Even if it gets started, a leaderless reengineering effort will run out of steam
• Reengineering Leader act as visionary and motivator
• Leader invests everyone in the company with a purpose and a sense of mission
• Must make clear to everyone that reengineering involves a serious effort that will be seen
through to its end
• From the leader's convictions and enthusiasm, the organization derives the spiritual energy
that it needs to gointo the unknown i.e, BPR process
• The leader kicks offf the orgnisation’s reengineering efforts
• The leader who appoints Senior Manager as owners of business processes and charges
them with achieving breakthroughs in performance
• The leader set the new standard and, through the owners, induces others to translate that
vision into reality
• Leaders must create an environment conducive to reengineering
• So, while half the leader's job involves urging the process owner and reengineering team to
perform, the other half involves supporting them so that they can perform.
• The reengineering leader can demonstrate leadership through:
• Signals
• Symbols and
• Systems

• Signals are the explicit messages that the leader sends to the organization about
reengineering:
– what it means?
– why we are doing it?
– how we are going about it? and
– what it will take?
• Successful reengineering leaders have to learn how much communicating they must do
• Reengineering is a difficult concept for people to understand and cope up with because it
cuts against the grain of everything they've done in their careers
• Symbols are actions that the leader performs to reinforce the content of the signals, to
demonstrate that he or she lives by his or her words
• Some important symbolic activities that can prove to the organization that the leader is
serious about reengineering:
– Assigning the company's “best and brightest” to reengineering teams
– Rejecting wrong design proposals from the wrong assumptions
– Removing managers/people who block reengineering effort
• The leader also needs to use Management Systems to reinforce the reengineering message
• These systems must measure and reward people's performance in ways that encourage
them to attempt major change
• Management systems should reward people who try good ideas that fail, not punish them.

• Identify and Communicate the Need for Change

• Put together the Team of Exprts (Sr. Managers, Operational Managers, Re-Engieering
Experts…)
• Find the inefficient Processes
• Define the KPI (Manufacturing : Cycle Time, Changeover Time, Defect Rate, Inventory
Turnover….) & (IT: Application development, Cycle Time…Mean time to repair…)
• Reengineering the Processes and Compare KPIs

EX: - BPR
• In the 1980s, the American automobile industry was in a depression, and in an attempt to
cut costs, Ford decided to scrutinize some of their departments in an attempt to find
inefficient processes.
• One of their findings was that the accounts payable department was not as efficient as it
could be: their accounts payable division consisted of 500 people, as opposed to Mazda’s
(their partner) 5.
While Mazda was a smaller company, Ford estimated that their department was still 5 times
bigger than it should have been
• Accordingly, Ford management set themselves a quantifiable goal:
• To reduce the number of clerks working in accounts payable by a couple of hundred
employees.
• Then, they launched a Business Process Reengineering initiative to figure out why was the
department so overstaffed.
• They analyzed the current system, and found out that it worked as follows:
1. When the purchasing department would write a purchase order, they sent a copy to
accounts payable.
2. Then, the material control would receive the goods, and send a copy of the related
document to accounts payable.
3. At the same time, the vendor would send a receipt for the goods to accounts payable.
• Then, the clerk at the accounts payable department would have to match the three orders,
and if they matched, he or she would issue the payment. This, of course, took a lot of
manpower in the department.
• So, as is the case with BPR, Ford completely recreated the process digitally.
1. Purchasing issues an order and inputs it into an online database.
2. Material control receives the goods and cross-references with the database to make sure it
matches an order.
3. If there’s a match, material control accepts the order on the computer.
This way, the need for accounts payable clerks to match the orders was completely
eliminated.
1. Requirement of too much of Reengineering processes at the intial stage
2. Inadequate training of Team Leaders, Process Owners and Team Members (What , When,
Who, How…)
3. Unclear knowledge of Reengineering
4. Improper monitoring of Reengineering process
5. Waste of much more time in detailed business process analysis
6. Fear of faliure
7. Unfavourable organisational environment
8. Delay in showing the results
9. Improper appraisal system
10. Inability to quantify improvement
11. Non – availability of adequate resources
12. Limited awareness amongst the employees
13. Discontinuance of Reengineering after achieving benchmarks