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BusinessProcessRe-engineering(BPR)ApplicationFrameworkEnterpriseTransformationApril2000PoliticalSocialInstitutionalEconomicA.T.Kearney12/8909/BPR/db2Contents„BPRdeliversradicalcustomerserviceimprovementsandcostreductions„A.T.Kearney’sapproachtoBPRisbasedonfivekeyprinciples„Ourapproachfollowsthreephases•Phase1-Visionandcaseforchange•Phase2-Processredesign•Phase3-Implementation„Programmeorganisationevolvesfromdesigntoimplementation„A.T.KearneyhasawealthofexperienceofsuccessfulBPRprojectsaroundtheworldA.T.Kearney12/8909/BPR/db3BPRdeliversradicalcustomerserviceimprovementsandcostreductionsA.T.Kearney12/8909/BPR/db4BenefitsofBPRProductdesignRawmaterialPartsproductionAssemblyMarketingDistributionServiceTechnologyCustomersHRPilotingPurchasingFacilitiesDecisionmakingReportingFinanceLegalCoreBusinessprocessesSupportprocessesManagementprocessesQualityManufacturingQualityILLUSTRATIVEBusinessProcessRe-engineeringfocusesonimprovingthecompany’scoreprocessesA.T.Kearney12/8909/BPR/db5BusinessProcessRe-engineeringalsotypicallyprovidesthebasisforaneworganisationandtechnologyalignmentbycreatingcross-functionallinksbetweendepartmentsandunitsBottom-upperformanceimprovementOPERATIONALDESIGNCrossfunctionalPROCESSREDESIGNTop-downdirectionsettingSTRATEGICORGANISATIONALDESIGNBenefitsofBPRA.T.Kearney12/8909/BPR/db6BusinessProcessRe-engineeringisonepossiblechangepath–moreradicalthanincrementalimprovement,lessradicalthanenterprise-widerestructuringBottom-upExperimentationGoalCascadingRapidAdaptationTop-downExperimentationProcessReengineeringAutonomousRestructuringRadicalLeadershipOrganisationalRealignmentDownsizing&RestructuringInternalForcesofResistanceExternalForcesofChangeCanBeOpenedOpenClosedModerateWeakStrongSource:PaulStrebel,IMDBenefitsofBPRA.T.Kearney12/8909/BPR/db7BPR:OveralloptimaltargetTraditionalmethods:Incrementalsolutionstoamultiplicityofproblems,notgeneratinganoveralloptimalmodelCutandpastelayerafterlayerwithoutquestioningthebasicsUnbuild,freezeandrebuildBusinessProcessRe-engineeringtakesabroadviewofthebusinessandcreativelychallengesallaspectsofthe“as-is”,inordertobuildanoptimal“to-be”modelBenefitsofBPRA.T.Kearney12/8909/BPR/db8BusinessProcessRe-engineeringcanachievedramaticimprovementsincustomersatisfaction—Qualityofserviceistypicallyimprovedbyafactorof2to10•Eliminatediscontinuitiesbetweendepartments•Establishclearrolesandresponsibilitiesattheinterfacesbetweenprocesses/departments•Establishclearhandovercriteriaofdocumentsandinformationtransferredateachinterface•...•Focusemployees’timeoncustomerfacingactivitiesinsteadofback-officework•Adaptlevelofservicetothetypeofcustomerdemand•Usetechnologyandinformationsystemsenablerstofurtherimproveservicelevels•Monitorafocusedsetofkeyperformanceindicatorslinkedtocustomersatisfaction•...•Deliverqualityinlinewithcustomerexpectations•Anticipatecustomers’qualityrequirements•Deliverontime(respectcommitteddeadlines)•Deliverfasterandreducecycletime•Improveinformationprovidedtocustomers•Aligncustomers’andemployees’objectivesthroughmeaningfulKPIsObjectivesImprovementleversBenefitsofBPRA.T.Kearney12/8909/BPR/db9BusinessProcessRe-engineeringalsocontributestooperationalexcellence—Costsaretypicallyreducedbyabout30%•Eliminatenon-value-addedandredundanttasksbyrationalisingrolesandresponsibilities•IntegrateactivitiesusingIT-Automatelowvalue-addedtaskswithlittleornobearingoncustomers-Explorepotentialslinkedtotechnologyandinformationsystems•Improvedecisionmakingprocessestoavoidwastingmoneyandenergyofemployees•Clarifyaccountabilitiesforallprocesses•Developcompetenciesandskillsthroughpersonaldevelopmentandmultiskilling•Increaseproductivity•Increaseefficiencyandeffectiveness•Increaseempowerment,motivationandsatisfactionofemployeesObjectivesImprovementleversBenefitsofBPRA.T.Kearney12/8909/BPR/db10A.T.Kearney’sapproachtoBPRisbasedonfivekeyprinciplesA.T.Kearney12/8909/BPR/db11A.T.Kearney’sapproachtoBPRisbasedonfivekeyprinciplesKeyprinciplesBestpracticeFrequentlymademistakes2-Balanceimpact,speedandsustainability•Manageimpact(benefitsofthetransformation),speedandsustainabilityinabalancedtransformationprogramme•Focusingonlyonimpactand/orspeedandignoringsustainability3-Takeaholisticview•Combinebusiness,social,institutionalandpoliticalchangetocreatemoresignificantanddurablebenefits•Focusingonlyonthecontentoftasksandtherelationshipsbetweenexistingfunctions,withoutquestioningtheothercomponentsoftheorganisation:structure,powerbase,rewardsystems,etc5-Involvepeopleprogressively•Firstgettopmanagementcommitment•Thenbringonboardlinemanagersandkeystakeholders•Finally,involveallpersonnel•Tooearlyinvolvementofallpersonnelcreatingconfusion•InsufficientinvolvementcreatingrejectionBPRkeyprinciples1-Strategydrivesthenewprocesses•Designingaprocessconsistentwiththecompany'sstrategy•Focusingonsolvingcurrentvisibleweaknesses,withoutaligningprocesseswithbusinessobjectives4-Leverageontechnologyappropriately•Appropriateusageofup-to-datetoolssuchase-technology,intranet,knowledgemanagement,videoconference,….•Excessiverelianceonlarge,c