Unit I: Introduction to BPR

Reengineering and its relationship with functional areas of business. History of reengineering, Suggested reengineering framework. Click to edit Master subtitle style Deterministic machines, complex dynamic system, interacting feedback loops and social constructs perspectives of BPR.

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Introduction
Business process re-engineering is the analysis and design of

workflows and processes within an organization.

Re-engineering is the radical redesign of business processes and

organizational structure in order to achieve significant improvements inperformance, such as productivity, cost reduction, cycle time, and quality.

Definition by Davenport (1990) a business process is a set of

logically related tasks performed to achieve a defined business outcome.

Re-engineering is involved with many aspects of businesses like

Enterprise resource planning, supply chain management, knowledge management systems, groupware and collaborative systems, Human Resource Management Systems and customer relationship management. redesign, business transformation, or business process change 4/23/12

Business process re-engineering is also known as business process

 Business process re-engineering (BPR) began as a private sector

technique to help organizations fundamentally rethink how they do their work in order to dramatically improve customer service, cut operational costs, and become world-class competitors.
A key stimulus for re-engineering has been the continuing

development and deployment of sophisticated information systems and networks.

Business Process Re-engineering (BPR) is basically the fundamental

re-thinking and radical re-design, made to an organization's existing resources.

It is an approach for redesigning the way work is done to better

support the organization's mission and reduce costs.

Reengineering starts with a high-level assessment of the

organization's mission, strategic goals, and customer needs.

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A five step approach to Business Process Reengineering

Davenport (1992) prescribes a five-step approach to the

Business Process Reengineering model:

Develop the business vision and process objectives:

The BPR method is driven by a business vision which implies specific business objectives such as cost reduction, time reduction, output quality improvement.

Identify the business processes to be redesigned:

most firms use the 'high-impact' approach which focuses on the most important processes or those that conflict most with the business vision. A lesser number of firms use the 'exhaustive approach' that attempts to identify all the processes within an organization and then prioritize them in order of redesign urgency.
Understand and measure the existing processes: to 4/23/12

Importance of Business Process Reengineering

The importance of Business Process Reengineering to any organization can not be stressed enough
the world is becoming more competitive. both internationally

and domestically
there is over capacity in the world because many technological

improvements have resulted in less staff being needed

technology will continue make jobs obsolete it is unclear if demand from emerging markets will fill up that

capacity

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History
In 1990, Michael Hammer, a former professor of computer science at

the Massachusetts Institute of Technology (MIT), published an article in the Harvard Business Review, in which he claimed that the major challenge for managers is to reduce non-value adding work, rather than using technology for automating it. any value for customers, and this work should be removed, not accelerated through automation. Instead, companies should reconsider their processes in order to maximize customer value, while minimizing the consumption of resources required for delivering their product or service. 1990, During the following years, a fast growing number of publications, books as well as journal articles, were dedicated to BPR, and many consulting firms embarked on this trend and developed BPR methods. many as 65% of the Fortune 500 companies claimed to either have initiated reengineering efforts, or to have plans to do so. 4/23/12

Hammer's claim was simple: Most of the work being done does not add

A similar idea was advocated by Thomas H. Davenport and J. Short in

Reengineering was adopted at an accelerating pace and by 1993, as

Business Process Reengineering Framework

There are several basic tenets that serve the basis for Business Process Reengineering Framework
Material should only be handles once the employee with the least possible skills should perform the

activity
reviews should be eliminated to the extent possible upgrading of systems and equipment are a possibility staff may have to be trained staff with different skills may be needed managers may have to give up reviewing stuff business processed should be documents and updated

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Reengineering and its relationship with functional areas of business.

Marketing strategies outline the manner in which your

marketing mix is used to attract and satisfy your target market, thus fulfilling your business's objectives, which is to derive net profit from your business activities. At the heart of marketing strategies lies your product. The product drives a profitable business. Without an excellent product, business may not go very far, without a great marketing system. Thus, developing an effective marketing strategy starts with the product, using the 4-step Marketing Reengineering Process outlined below:-

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Business Objectives Strategy

Sensing: Marketing Audit Planning: Marketing Physics Implementing: Marketing System Reflecting: Marketing Mathematics
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Tactics

Measure

 Sensing: Marketing Audit The cost of marketing lies in sending the message to the

target market. The clearer the target marketing, the lower the marketing costs. Therefore, the first step "Sensing" is to perform information gathering about the target market. You will need to perform a few analysis:-

SWOT analysis PEST analysis

Strengths, Weaknesses, Opportunities, Threats Political, Economic, Social and Technological factors

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 Planning: Marketing Physics Marketing Physics defines what your product

means to the customer. It helps you to look inwards, evaluate your products and develop an effective marketing angle to position your products uniquely in the market. There are three marketing laws in Marketing Physics. These marketing laws will enable you to angle your marketing strategy in a way that will enable your customers to understand and see the dramatic difference of your products 4/23/12 and services.

 Implementing: Marketing System With the marketing plan in your hand, you can tend start

implementation. You should create a Marketing Funnel, that converts your visiting suspects to qualified prospects to paying customers to loyal members to raving fans. The key thing to do during implementation is to test and measure the key performance indicators (KPIs) that you have defined in Step 1 "Sensing" under strategic objectives. You need to put in place tracking mechanisms for all the different marketing channels that you have and then perform testing for different versions of your marketing messages. You must be able to apply Marketing Mathematics to measure the response of your marketing efforts, so that you can continually improve the effectiveness of your marketing campaign.
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 Reflecting: Marketing Mathematics Lastly, with the results coming in from Step 3 "Implementing",

you will then assess if the strategic objectives (such as specific key performance indicators) laid out in Step 1 "Sensing" are met. Based on the numbers from Step 3, you will know which of your marketing efforts are winners and which are nonperformers. You can then decide to cut the losers and put more resources into the winners, and repeat the cycle of "Sensing", "Planning", "Implementing" and "Reflecting". Successful marketing strategies must contain ways to outmanoeuvre your competition. It is an on-going process that builds and leverages on your competitive advantages, and must be adaptable, sustainable and forward looking.
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Financial Re-engineering
Financial Re-engineering is the re-cementing orchanging of

products, systems, people, brands and technology which has to be done with financial restructuring and financial requantification of every qualitative business variable.

Objectives of Financial Re-engineering

Facilitation of the New Budget Framework. Improve the efficiency and accuracy of financial data capture. Reduce the number of cost centres in the General Ledger. Introduce structures to facilitate future introduction o project costing. Identification, review and improvement of key process controls.

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Benefits of Financial Re-engineering

Ease of Access Benefit. Ease of Analysis Benefit. Better Decision Making Benefit. Research Reporting Benefit. Risk Management Benefit. Continuous Improvement Benefit.

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Various Forms ofFinancial Re-engineering

Financial Restructuring Corporate Restructuring

Mergers /Acquisitions Divestitures Demergers

Financial Restructuring
Financial Restructuring is a process to re-arrange, re-build or construct

or form a new financial structure.

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Corporate Restructuring
Corporate Restructuring is a conscious effort to

restructurepolicies, programmes, products,processes and people, to serve there defined purpose on a sustainable basis.

Merger A transaction where two firms agree tointegrate their operations on a

relativelycoequal basis because they haveresources and capabilities that together may create a stronger competitiveadvantage.

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 Acquisition A transaction where one firm buys another firm with the intent

of more effectively using a core competence by making the acquired firm a subsidiary within its portfolio of businesses

Reasons for Acquisitions

Increased market power. Overcome entry barriers. Cost of new product development. Increased speed to market. Lower risk compared to developing newproducts Increased diversification.

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