Business Process

Unit – III
MCA I Year

BUSINESS PROCESS
REENGINEERING
Roy Antony Arnold G
Lecturer / CSE
Infant Jesus College of Engineering
Tuticorin, Tamilnadu, India
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WHAT IS A BUSINESS PROCESS?

 “Abusiness process is a collection of

activities which together produce something
of value to a customer”
– e.g. Customer Order Entry

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 DEFINITION
 Reengineeringis 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.

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 WHAT TO REENGINEER?

BPR changes processes, and

not
functions, departments,
geographies or tasks. 5
WHAT IT IS NOT?

 Reengineering is not reorganizing.

 Modifying how an organization is structured and redesigning an
organization’s business processes are two different things.
 An organizational structure should be designed so that it best
supports redesigned business processes.
 Reengineering is not downsizing either.
 Downsizing focuses on the reduction of workforce to achieve
short-term cost savings.
 Reengineering, on the other hand, focuses on rethinking from the
ground up, finding more efficient ways of working including
eliminating work that is unnecessary.

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REASONS FOR REENGINEERING

Old Era New Era

High Demand High Competition

Efficiency Innovation
Control Speed
Service &Quality

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EXAMPLES

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EXAMPLES

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BENEFITS OF REENGINEERING
 The rewards of reengineering are many including:
1) empowering employees;
2) eliminating waste, unnecessary management overhead,
and obsolete or inefficient processes;
3) producing often significant reductions in cost and cycle
times;
4) enabling revolutionary improvements in many business
processes as measured by quality and customer
service; and
5) helping top organizations stay on top and low-
achievers to become effective competitors.
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 BUSINESS PROCESS
REENGINEERING

Imperativefor Survival
11 Methodology

Steps
REENGINEERING – SURVIVAL STUDY

 Introduction:
The number of firms is increased to close – because of
a) Inefficiency
b) too Inward Looking
c) inflexibility

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- CONTINUED
Similar changes occurred in developed and developing nations
also and still facing a similar challenge.
Example:
Ford Motor Company faced business extinction at one time and
found the paths to renewed success and inspires others.

Business Reengineering –
Process thro’ which the continuous success and survival is
indicated (by Americans).
Term is invented by Michael Hammer.

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REENGINEERING IMPERATIVE IN USA
 The business climate made reengineering necessary in the
United States.
 US gave great industrial philosophers like Adam Smith and
Henry Ford. But at one time their business was also in trouble.
 This situation arises because of three main reasons. They are,
a) The Assembly line model of production, where
customer waited in line for delivery
b) Competition within the country is very low.
c) Global competition was largely non-existent.
 To recover from this situation, FORD changed from their
Production Supremacy to Supplier primacy, when the Model T
Ford released in the market.
 Henry Ford said “I will give the customer any color of car he
wants – so long as it’s black.”
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-CONTINUED
 Japanese organizations entered into America
(after War)
Japanese were too smart, they move small
market into world markets with extraordinary
quality and manufacturing philosophy. They cut
out unnecessary waste such as,
1. Safety stock Inventories
2. Multiple suppliers
3. External Inspection
4. High Quality
5. Low cost in regular basis
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JAPANESE PARADIGM
 US adopted the Japanese paradigm because of :
1. They recognized that economy of scale is not as
important as economy of time. So, the entire
approach was to be flexible and respond quickly to
changing customer needs.
2. They opted for flexibility and multi- skilling
techniques in work culture and this created the
ability to respond. i.e. discard old and narrow
focused to new innovations in work.
3. Customer’s response become the primary objective
rather than the growth alone.
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REENGINEERING SCENARIO IN EUROPE
 In Europe,
- Quiet Transformations are taking place vitally.

For example,(eg1):
- Lubricants division of a large oil company has cut its order delivery
time to 40% ( from 6weeks to 19 days).
- Eliminated $200 millions in inventory and doubled its profits.
- It aims in overall reduction in operating expenses to 35%.
For example (eg2:) :
In Rover car company,
- aims to fulfill 90% of customer orders.
- He used around nine key business processes.
- New product introduction
- Only European car-maker to reverse the falling output and sales
trends during first five months of 1993. 17
IMPERATIVE IN INDIA
 The first country realized the value of destruction and
destroyer.
 Quality competitions by
 ISO 9000 and TQM
 Computerization of processes
 Many reasons for lacking:
 Blaming technology by system professionals
 Users blame technology and system professionals

 Top management blames both users and system professionals.

 Consultants blame all others.

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 Global environment is pulling Indian organizations into
- Customer orientation
- quick response time
- quality imperatives
- cost minimization
Conclusion:
- environmental pull
- technology push
- Economic liberalization

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 Cant do redefine their mission and objectives
 clinically reassess the key business processes

 achieve improvements in process efficiency and effectiveness

thro’ BPR.

Examples:
- HP, Pepsi abroad, Federal Express

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INSTANCES OF RE IN INDIAN ORG
 In year 1997,
 Major BPR in customer ordering , services functions
 Manufacturing and marketing

 Organizing market research once in six months to

know customer feedback on their products and
general view on market needs
 Performance levels of 3 major process:
- Customer orders
- Customer service
- Customer feedback
 Three points of customers:
- Sales executive
- Installation technician
- Market Researcher

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INSTANCES IN RE IN INDIA

 Leasing and financing company

 Manufacturing company

 News paper publishers

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