Business Process Reengineering and Redesign

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Questions and Answers

What is the primary goal of Business Process Reengineering?

To avoid risks in business management

To achieve radical improvements in organization's efficiency and competitive strength (correct)

To automate business processes using IT

To improve process efficiency

What is the first step in Business Process Redesign?

Re-invent the business vision and strategy

Find leverage points for process improvement

Analyze As-is process quality features

As-IS Analyses on strategic issues (correct)

What is the main difference between Business Process Reengineering and Business Process Redesign?

The focus on process efficiency

The level of radical change required (correct)

The use of IT tools

The scope of business processes involved

What is the purpose of uncovering reasons for malfunctions or poor performance in Business Process Redesign?

To identify areas for process improvement Signup and view all the answers

What is the approach advocated by Business Process Reengineering?

Start with a 'blank sheet of paper' and re-think business vision and strategy Signup and view all the answers

What is one way to avoid controls without losing quality or increasing risk?

By setting business rules/policy Signup and view all the answers

What is one result of discontinuity of media and systems?

Process slowdown, redundant work, and quality problems Signup and view all the answers

What is one benefit of integrating different systems using EAI, BAPI, Web service, etc.?

Improved process efficiency Signup and view all the answers

What is a characteristic of an optimized business process?

It can be handled by one person in one stroke without interruption Signup and view all the answers

What is one benefit of outsourcing non-value added activities?

Lower cost Signup and view all the answers

What is one benefit of redesigning a business process?

Less resources required Signup and view all the answers

What is the main issue with the current process in BP?

Ambiguous and/or complex process Signup and view all the answers

Why are there many controls and decisions shifted towards the management hierarchy?

Because nobody is in charge of the overall process result Signup and view all the answers

What is the goal of revising the process structure?

To eliminate non-value adding activities Signup and view all the answers

What is a non-value adding activity in the process?

Producing something that no customer would pay for Signup and view all the answers

What is the formula for calculating risk?

Risk = (amount of loss) x (probability of loss) Signup and view all the answers

What is the purpose of calculating the cost of control activities?

To decide whether the control activity is worth the cost Signup and view all the answers

Study Notes

Business Process Redesign and Reengineering

Business Process Reengineering (BPR) emerged in the early 1990s, aiming for radical improvements in efficiency and competitive strength.
BPR focuses on reinventing business processes from the ground up using a "blank sheet of paper" approach.
The ultimate goal of BPR is to fundamentally rethink business vision and strategy through technological integration.

Business Process Redesign (BPR)

Less radical than BPR, emphasizing process improvement while avoiding high risks.
Aimed at achieving considerable results with enhanced efficiency in existing processes.

Steps to Business Process Redesign

Conduct an As-IS analysis to identify strategic issues, including core business processes, products/services, and customer targets.
Analyze current process quality to uncover reasons for malfunctions and identify leverage points for improvement.
Reduce unnecessary controls by establishing clear business rules and policies to maintain quality and minimize risks.

Improving Business Processes

Focus on batch operations to capitalize on economies of scale; better technology can help avoid redundancies.
Invest in IT for system integration using tools such as Enterprise Application Integration (EAI) and Web Services.
A process reaches its optimum structure when it can be managed efficiently by one person without interruptions.

Strategies for Process Improvement

Simplify processes by standardizing designs that cater to diverse product lines.
Outsource non-value-added activities, leading to cost reductions and improved strategic partnerships.
Develop interfaces to connect various internal processes and integrate suppliers/customers effectively.

Assessing the Impact of New Designs

Aim for reduced resource consumption, fewer personnel requirements, and fewer errors in process execution.

Common Issues in Business Processes

High response times to customer inquiries and non-competitive process costs.
Lack of comprehensive process status/data overview due to insufficient and unintegrated data flow.
The existence of multiple disparate IT systems complicating processes.

Additional Issues in Business Processes

Different processes for different products lead to ambiguities and inefficient decision-making.
Excessive control measures hinder responsiveness, with decision-making often removed from accountable individuals.

Revamping Process Structures

Eliminate redundant or duplicate activities that do not contribute value.
Merge, relocate, or execute process steps in parallel to streamline operations.
Outsource or automate steps to enhance efficiency and focus on core competencies.

Non-Value Adding Activities

Activities that provide no customer value often continue due to historical reasons (e.g., transport and storage).
Assess cost of control activities against potential losses, evaluating their worth based on risk probabilities.

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Description

Test your knowledge of business process reengineering and redesign, which involves radical changes to achieve improvements in an organization's efficiency and competitiveness. Learn how to use IT as a tool for process optimization and automation.