What is a Business Process Review?
Definitions of Business Process Review vary but the
following two are indicative of the process:
- The analysis and design of workflows and processes with and between
organisations.
- The critical analysis and radical redesign of existing business
processes to achieve breakthrough improvements in performance
measures.
The second definition in using the word “radical”
hints at the difference between BPR and another management nostrum called
Total Quality Management (TQM). TQM is a process whereby continual and
gradual improvements in processes are made whereas the key to BPR is that
it is a time limited project targeted at a one time review of the
processes. In most organisations the two processes sit side by side.
In reality before we can define a Business Process Review
we need to understand just what is a Business Process. One definition is
that a business process is a “set of logically related tasks performed
to achieve a defined business outcome.” Business processes have two
important characteristics:
- They have stakeholders (internal or external),
- They cross organizational boundaries, i.e., they occur across or
between organizational subunits.
Processes are generally identified in terms of beginning
and end points, interfaces, and organization units involved, particularly
the client facing unit.
Business processes may be defined based on three
dimensions:
| Entities |
Processes take place between
organizational entities. They could be Inter-organizational (e.g.
EDI), Inter-functional or Interpersonal |
| Objects |
Processes result in manipulation of
objects. These objects can be Physical or Informational. |
| Activities |
Processes could involve two types of
activities: Managerial (e.g. develop a budget) and Operational
(e.g. process a donation). |
However Business Process Review is shrouded with half
truths.
A BPR implies a clean slate start to process redesign compared with the
gradual process development of TQM but clean slate change is rarely found
in practice as a "blank sheet of paper" used in design usually
requires a "blank cheque" for implementation. Hence, a more
affordable approach for most companies is to use Clean Slate Design which
entails a detailed vision for a process without concern for the existing
environment. However, the implementation is done over several phased
projects. Moreover, a revolutionary change process might not be feasible
given the risk and cost of revolutionary tactics.
In contrast to the much touted leadership role, IT is generally viewed
as a partner within a cross-functional team that is generally headed by a
non-IT project leader and a non-IT business sponsor who have better
control over the processes that are being redesigned.
The implementation and execution of the redesigned processes depends
upon those who do the work. Hence, the participation, and more
importantly, acceptance and ownership, at the grass roots level is
essential for successful BPR.
The Seven Principles of
BPR
-
Organize around outcomes, not
tasks.
-
Have those who use the output of
the process perform the process.
-
Subsume information processing
work into the real work that produces the information
-
Treat geographically dispersed
resources as though they were centralized
-
Link parallel activities instead
of 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
Business Process Review
and Information Technology
BPR requires taking a broader view of both IT and business
activity, and of the relationships between them. IT should be viewed as
more than an automating force but one which can fundamentally reshape the
way business is done. Business activities should be viewed as more than a
collection of individual or even functional tasks. In a process view for
maximizing effectiveness, IT and BPR have a recursive relationship; IT
capabilities should support business processes, and business processes
should be in terms of the capabilities IT can provide.
BPR represents an approach to coordination across the
organisation. IT's promise -- and its ultimate impact -- is to be the most
powerful tool for reducing the costs of that coordination. Innovative uses of IT would
inevitably lead many organisations to develop new, coordination-intensive
structures, enabling them to coordinate their activities in ways that were
not possible before. Such coordination-intensive structures may raise the
organization's capabilities and responsiveness, leading to potential
strategic advantages.
What is the Role of the IT Function in BPR?
Although, BPR has its roots in IT management, it is primarily a Business
Initiative that has broad consequences in terms of satisfying the needs of
customers and the organisation’s other stakeholders. The IT function may
need to play a behind-the-scenes advocacy role, convincing senior
management of the power offered by IT and process redesign. It would also
need to incorporate the skills of process measurement, analysis, and
redesign.
Business Process Review
Methodology
Develop the Business Vision and Process Objectives:
BPR is driven by a business vision which implies specific
business objectives such as Cost Reduction, Time Reduction, Output Quality
improvement, etc
Identify the Processes to be Redesigned:
Most organisations 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 organisations use the Exhaustive
approach that attempts to identify all the processes within an
organisation and then prioritize them in order of redesign urgency
Understand and Measure the Existing Processes:
For avoiding the repeating of old mistakes and for
providing a baseline for future improvements
Identify IT Levers:
Awareness of IT capabilities can and should influence
process design.
Design and Build a Prototype of the New Process:
The actual design should not be viewed as the end of the
BPR process. Rather, it should be viewed as a prototype, with successive
iterations. The metaphor of prototype aligns the BPR approach with quick
delivery of results, and the involvement and satisfaction of customers
AND NOW FOR THE BAD NEWS!
70% of all Business Process Review projects fail!
And for three main reasons:
- Lack of sustained management commitment and leadership
- Unrealistic scope and expectations
- Resistance to Change.
The ultimate success of BPR depends on the people who do
it and on how well they can be motivated to be creative and to apply their
detailed knowledge to the redesign of business processes.
To turn around negative conditions,
organisations should:
-
Do Something Smaller First
-
Conduct Personal Transformation
(change of mindset)
-
Get IT and HR Involved (initiate
the change and give HR factors due emphasis)
It is common for organisations to embark on the replacement of
core business systems and attempt to “build-in” their current business
processes “because we’ve always done it that way”. The full
advantage of the new technology is potentially lost with this approach and
a much more open view of the implementation is demanded to ensure that
hard-earned knowledge gained by the system vendor (often with your
competitors) can be imparted to your organisation.
For further information please Ask Charlie at Charlie@askcharlie.co.uk.
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Action plan
What is Business Process Reviews
