ERP-REENGINEERING PDF

1 ERP enabled Business Process Re-engineering BUSINESS PROCESS REENGINEERING  2 ERP enabled Business Process Re-engineering Learning Objectives of the unit : - Explain the role of B...

1 ERP enabled Business Process Re-engineering BUSINESS PROCESS REENGINEERING  2 ERP enabled Business Process Re-engineering Learning Objectives of the unit : - Explain the role of Business Process Reengineering (BPR) within the organization Understand the origins and key characteristics of BPR ERP & BPR, Work Flow Management. FIVE STAGE – AS IS / TO BE ANALYSIS.  3 What is BPR ? Reengineering is 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. (Hammer & Champy, 1993)  4 The Need for BPR Customers (know what they want and are willing to pay for it) Competition (Continuous increase will result in changes to price, quality, selective service, and delivery) Change (continues to occur in people & culture, organizational structures, policies & procedures, and technology)  5 The Need for BPR Techniques lag behind technology (Technologically capable, but not functionally operational) Significant gap between the actual and desired results, creating a business Problem. Fragmented piecemeal systems (focus on vertical functions, with the existence of redundancies of effort and actions). Integration across departmental and organizational boundaries (information and operations are needed).  6 T Q M and Reengineering Rate of change TQM: continuous improvement Reengineering: dramatic improvement 4-  7 TQM versus Reengineering 4-7  8 What is a Process? A specific ordering of work activities across time and space, with a beginning, an end, and clearly identified inputs and outputs: a structure for action. (Davenport, 1993)  9 What is a Business Process??? A collection of activities that take one or more inputs and turn that into a product that adds value to a customer A group of logically related tasks that use the firm's resources to provide customer-oriented results in support of the organization's objectives A Business Process  10 Why Organizations Don’t Reengineer? Complacency Political Resistance New Developments Fear of Unknown and Failure  11 Performance BPR seeks improvements of – Cost – Quality – Service – Speed  12 Key Characteristics Systems Philosophy Global Perspective on Business Processes Radical Improvement Integrated Change People Centred Focus on End-Customers Process-Based  13 Key Characteristics Several jobs are combined into one Employees are empowered to make decisions Steps in business process: natural order Process may have multiple versions Work is performed where it makes the most sense  14 Key Characteristics Controls, checks, other non-value-added work is minimized Reconciliation is minimized - minimize external contact points Hybrid centralized / decentralized operation is used A single point of contact is provided for the customer  15 Systems Perspective Feedback Inputs Transformation Outputs Environment  16 Process Based Added Value – BPR Initiatives must add-value over and above the existing process Customer-Led – BPR Initiatives must meet the needs of the customer  17 Radical Improvement Sustainable – Process improvements need to become firmly rooted within the organization Stepped Approach – Process improvements will not happen over night they need to be gradually introduced – Also assists the acceptance by staff of the change  18 Integrated Change Viable Solutions – Process improvements must be viable and practical Balanced Improvements – Process improvements must be realistic Enterprise integration – Departments are consolidated – Several jobs are combined into one job –\  19 People-Centred Business Understanding Empowerment & Participation Organizational Culture Worker empowerment – There is both horizontal and vertical reorganization – Handoffs are eliminated – There are fewer rules and less coordination is required  20 Focus on End-Customers Process improvements must relate to the needs of the organization and be relevant to the end- customers to which they are designed to serve  21 Re-engineering Redesign of processes (Fundamental change in business processes) From mass production to mass customization (Mass production of the same products --- Mass production of different products) Cycle time reduction (Change in the time it takes to complete a process from start to end; time can provide competitive advantage Restructuring organizations (May need to restructure the entire organization to reap the benefits of BPR)  22 BPR Symbols  23 Business Process Flowchart Symbols An Activity A Document A Decision Data (input as outputs)  24 Business Process Flowchart Symbols A Predefined Process Start The Start of a Process End The End of a Process Representing a Relation  25 Business Process Flowchart Symbols Continuation of the process at the same page at an equal symbol with the same number. Used when a relation arrow crosses another relation arrow Off-Page Connector - Process will continue on the next page Integration Relation - A relation to another module is identified and described  26 Data Flowchart Symbols Manual Data Item A Database File Representing a Relation Continuation Off-Page Connector  27 Rules For Data Symbols  28 Rules For Data Symbols Start Symbol used to identify the start of a business process Generate Purchase Activities must be described as a verb Order OK? Yes Decisions have only two possibilities (Yes & No) No Crossing lines are not allowed End If one side of the decision has no further processes defined this symbol has to be used  29 Rules For Data Symbols I Continuation symbol within the same number must be present twice on the same page Purchase Order Name the document Off- Page Connector is used to continue a process at the A next page or to let the process to flow over at the previous to the next page. If more than one is needed use A, B, C, D… Posting of Bonus Name the data  30 Rules For Data Symbols Predefined Processes always have a relation to level and Sub-Process stream by a number in the line below a sub-process Delivery description BC 4.04 A predefined process must be described in a different flowchart. To make the relation clear between the predefined process and the belonging flowchart a unique alpha numeric number should be assigned to this predefined process.  31 ERP & BPR  32 Benefits From ERP Assists the Implementation of Business Processes – Access to Global Best Practices for various processes which are proven and standardized. – Provides integrated approach enhancing the focus on customer requirements / fulfillment – Improve Operational Efficiency – Coordinate with Vendors & Customers in the Process Chain – ERP & BPR go hand in hand. ERP to be used to Innovate.  33 ERP IN MODELLING BUSINESS PROCESSES Focus – Business Processes – Process Redesign – Process Implementation Integration of all functions / across divisions Information flow – accurate & on-time MIS reports for facilitating decision making/actions Used to automate transactional and laborious business processes.  34 WORK FLOW MANAGEMENT SYSTEM IN ERP Work Flow (Routing) system in ERP is an automated organizational process facilitating communication of work content, coordination between departments / people and control of processes. WFM integrates : – Technology – Organization / divisions – Methodology (processes) – Collaboration of Business processes. – Communication within / outside using SCM / CRM etc., – Human interaction reqd. to meet customer requirements.  35 TASKS of the Re-engineering team 1) determine measures of performance 2) install measures of performance 3) delineate entire existing process in all its gory detail 4) perform process value analysis and activity-based costing 5) benchmark processes by comparison with other processes  36 Cont’d 6) design re-invented process 7) simulate re-invented process 8) prepare report with recommendations 9) install re-invented process 10) measure improvements  37 BPR Challenges  38 Continuous Evaluation Is reengineering truly transformational? Will reengineering improve customer relations? Has reengineering cut across the organization? Is information technology playing an integral role in the reengineering solution? Does it hurt? 4-38  39 Common Problems Process Simplification is Common - True BPR is Not Desire to Change Not Strong Enough Starting Point is the Existing Process & Not a Blank Slate Commitment to Existing Processes Too Strong Quick Fix Approach  40 Common Problems with BPR Process under review too big or too small Reliance on existing process too strong The Costs of the Change Seem Too Large BPR Isolated Activity not Aligned to the Business Objectives Allocation of Resources Poor Timing and Planning Keeping the Team and Organization on Target  41 Managerial Issues Ethical issues (BPR projects may lead to the need to lay-off, retrain, or transfer employees) BPR implementation (Few organization-wide BPR effort) Incremental improvement programs BPR tools (Often uses existing tools rather than creation of new tools) Role of IT (IT should be a supportive, not lead role in BPR projects) Failures (Big projects tend to increase failure rates)  42 Summary Reengineering is a fundamental rethinking and redesign of business processes to achieve dramatic improvements BPR has emerged from key management traditions such as scientific management and systems thinking Rules and symbols play an integral part of all BPR initiatives