Operations Strategy: Business Process Reengineering - Transformation from the Ground Up

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Operations Strategy: Business Process Reengineering - Transformation from the Ground Up

Monday, July 11th, 2011 - 17:51
Thursday, July 7, 2011 - 17:48
In our last post, we talked about how Business Process Management aligns people, processes, and technology to more effectively and efficiently address customer’s needs. However, in some cases a redesign of workflow, within and between enterprises, is the best way to ultimately cut cost and improve service. This approach is called Business Process Reengineering. We’ll now take a closer look at BPR and explain why it might be the path to help your organization cut costs and improve reliability.

What Makes Business Process Reengineering Different?

BPR goes beyond a simple organizational restructuring. It actually encompasses everything necessary to identify, produce, and deliver a product or service. It is a way organizations can achieve changes in performance as measured by indicators like cost, cycle time, service, and quality. BPR is implemented through a variety of tools and techniques that focus on the business as a set of related, customer-oriented core business processes—not as a set of organization functions. The changes can be radical, or fairly incremental, depending on the organization.

Managers tend to see BPR from a different viewpoint. For them, it is a way to redefine an organization’s larger mission statement, a way to analyse critical success factors, or a way to re-design the organizational structure. Often, after a successful BPR, managers have changed their traditional methods of thought and really have committed themselves to the “customer”—be it the solider or the teacher.

Starting with a “Clean Slate”

BPR starts by looking at an organization’s business processes from a "clean slate" perspective. This helps determine how they can rebuild their processes to enhance their efficiency and improve quality. By doing so, organizations also typically discover many cost savings opportunities.

The BPR process has several different building blocks that enable you to develop a sound platform to build on. Some of the major components are as follows:

  • Core Processes - Core processes are critical to the mission of the business and need to create some “value” for the customer. Typically they are cross functional (transcends departmental boundaries) and closely tied to the organization’s competencies.
  • Strategic/Business Planning - Strategic planning provides a set of business goals and defined requirements that are expressed in terms of customer needs all within the context of mission, vision, values and beliefs.
  • Activity Modeling - Activity modeling is a technique to assist you in understanding how a business process works.  In activity modeling, you decompose a business process step-by-step into activities that make up the process.
  • Data Modeling - Information is the glue that holds an organization together. Data modeling is a technique for accurately describing exactly what information you need to perform each and every activity that makes up the business process you perform.
  • Activity Based Costing - Activity based costing (ABC) is a technique that allows us to determine the costs of producing our primary products and services.
  • Economic Analysis - Economic analysis gives us the capability to determine the costs and benefits associated with alternative investment opportunities, taking into account the life cycle characteristics of each investment.

All of these various processes help create better business practices for organizations, helping them answer the questions…

  • Is this the best way to do it?
  • How does what I do compare to others who have the same responsibilities?

At the end of the day, BPR can help solve some significant challenges for federal agencies as they look to become leaner, greener, and do more with less.

Let Us Hear From You

Could Business Process Reengineering work for your organization? Why or why not?

 

 


Monica Painter Ms. Monica Painter is a Partner with IBM Global Business Services. She is IBM’s Global Leader for Lean and “Green” Six Sigma and she is the Operations Strategy Leader for the Public Sector’s Operations and Supply Chain Management Practice. She has twenty years of client sales, engagement management, consulting, team facilitation, and management experience. She also has a strong background in business transformation and innovation, business process management, supply chain management, change management, including strategic alignment, organization design and development, stakeholder analysis and communication, business performance improvement including analytics, and change acceleration. Ms. Painter is a certified Master Black Belt and is known across industry as a Subject Matter Expert.

She holds a B.S. in Marketing and Management from The McIntire School of Commerce, University of Virginia, and an MBA specializing in Organization Behavior & Finance from The Wallace E. Carroll School of Management, Boston College.

Monica Painter (monica.painter@us.ibm.com)