business aspiration

Business Process

Re-engineering

Aspirations

An organization

Flexible enough to adjust to changing market

conditions

Lean enough to beat any competitor’s price

Innovative enough to keep its products & services

technologically fresh

Dedicated enough to deliver maximum quality &

customer service

The Crisis

So, if Managements want companies

Lean, nimble, flexible, responsive, competitive,

innovative, efficient, customer-focused, &

profitable

Why are so many companies bloated, clumsy,

rigid, sluggish, noncompetitive, uncreative,

inefficient, disdainful of customer needs & losing

money

The Problem

Most companies can trace their work styles & organizational roots to the prototypical pin factory – based on division of labour

Suddenly, the world is a different place

In today’s environment nothing is constant or predictable – market growth, customer demand, product life cycles, rate of technological change or the nature of competition

What has Changed

Three forces, separately & in combination, are

driving today’s companies deeper & deeper

into territory that most of their executives &

managers find frighteningly unfamiliar

Three Cs

Customer

Competition

Change

Customers take charge

Dominant force in seller-customer

relationship has changed

Seller no longer has upper hand

Customers now tell suppliers what they want,

when they want it, how they want it & what

they will pay

Competition intensifies

It used to be simple – the company that could get to market with an acceptable product or service at the best price would get a sale

Now, not only does more competition exist, it is of many different kinds

Niche players

Disparate bases of competition – price, selection, quality, service before, during or after sale

Foreign players

Change becomes constant

Change has become pervasive and persistent

It is normality

Pace of change has accelerated

Rapid technological change also promotes

innovation

Stability Change

Traditional

Stability

Emerging

Change

Discontinuity

Operational processes and technology enabled

applications expected life as installed.

A Change in the Meaning of Change

1975

Payback

Time

Time

7 Years

2001

Payback

Time

Time

2 Years

Projected to be 6 months by 2010

Stability Change

Traditional

Stability

Emerging

Change

Discontinuity

Operational processes and technology enabled

applications expected life as installed.

A Change in the Meaning of Change

1975

Payback

Time

Time

7 Years

2001

Payback

Time

Time

2 Years

Projected to be 6 months by 2010

Cost amortization

Value accrual

Organization stabilization

Maintaining market alignment

Maintaining strategy alignment

Strategy flexibility

Process flexibility

What is the Problem

Factors beyond control?

Economic mismanagement by Govt?

Predatory pricing by foreign players?

Regulations?

Right products & services?

Corporate strategies?

Is automation the answer?

BPR

“Starting Over”

It does NOT mean tinkering with what already exists or making incremental changes that leave basic structures intact

It means asking the question: If we were re-creating the company today, given what we

know and given current technology, what would it look like?

Re-engineering a company means tossing aside old systems & starting over.

It involves going back to the beginning & inventing a better way of doing work

BPR

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

BPR

Four Key Words

Fundamental

Radical

Dramatic

Processes

Fundamental

Why do we do what we do?

Why do we do it the way we do?

Re-engineering first determines what a company must do, then how to do it.

Re-engineering takes nothing for granted. It ignores what is and concentrates on what should be

Radical

Radical derived from Latin word “radix”,

meaning root

Radical redesign means getting to the root of

things

Re-engineering is about reinvention – not

business improvement, business enhancement

or business modification

Dramatic

Re-engineering is not about making marginal

or incremental improvements but achieving

quantum leap in performance

Re-engineering should be brought in only

when a need exists for heavy blasting

Marginal improvement requires fine-tuning;

dramatic improvement demands blowing up

the old and replacing it with something new

Processes

A business process is a collection of activities that

takes one or more kinds of input & creates an output

that is of value to the customer

Most business people are not “process-oriented”.

They are focused on tasks, on jobs, on people, on

structures, but not on processes

Individual tasks within a process are important but

none of them matter one bit to the customer if the

overall process doesn’t work

What BPR isn’t

Re-engineering is NOT automation – it may simply provide more efficient ways of doing the wrong kind of things

Re-engineering should NOT be confused with software re-engineering – i.e. rebuilding obsolete information systems with more modern technology

Re-engineering is NOT restructuring or downsizing. Reengineering means doing more with less

Re-engineering is not the same as reorganizing, de-layering, or flattening the organization

Re-engineering is not the same as quality improvement or TQM etc.

What is BPR – once again

Two word definition – “starting over”

Beginning again with a clean sheet of paper

Rejecting conventional wosdom & received

assumptions of past

Inventing new approaches to process

structures

Search for new models of organizing work

Common Elements

Several Jobs are combined into one

Workers make decisions

The steps in the process are performed in a natural order

Processes have multiple versions

Work is performed where it makes the most sense

Checks & controls are reduced

Reconciliation is minimized

Case Manager or SPOC

Hybrid centralized/decentralized operations are prevalent

Enabling Role of IT

Inductive versus deductive thinking

Think of IT as a solution waiting for a

problem and not the other way round

Do not look at technology as solution to

existing processes or problems

Some IT solutions

Old rule: Information can appear in only one

place at one time

Disruptive Technology: Shared databases

New rule: Information can appear

simultaneously in as many places as it is

needed

Some IT solutions

Old rule: Only experts can perform complex

work

Disruptive Technology: Expert systems

New rule: A generalist can do the work of a

specialist

Some IT solutions

Old rule: Businesses must choose between

centralization and decentralization

Disruptive Technology: Telecommunication

networks

New rule: Businesses can simultaneously reap

the benefits of centralization &

decentralization

Some IT solutions

Old rule: Managers make all decisions

Disruptive Technology: Decision support

tools

New rule: Decision making is part of

everyone’s job

Some IT solutions

Old rule: Field personnel need offices where

they can receive, store, retrieve & transmit

information

Disruptive Technology: Wireless data

communication and portable computers

New rule: Field personnel can send & receive

information wherever they are

In addition, Baroda will need to dramatically change the composition and structure of its workforce in order to

meet the future demands and changing nature of the customer base and the restructuring of its banking

operations. This will also require a substantial investment in the development of the HR function within

Central Office.

Current Position Assessment “Today”Competitive Profile of Bank of Baroda

Workforce

Time

47054

25000

40000

VRS(1)

VRS (n)

Web-enabled Processes

Process Re-engineering

Core Banking Systems

GE project savings of 28% to

48% over 30 months through

web-enablement of core

business processes

Projected

Target

Source: Market Guide (Yahoo Finance)

Analysts Reports, Gartner Analysis, Company

Reports

Human

ResourcesPlanning

Branches

Accounts

Credit &

Risk

Management

ITAccounts

&

Subsidiaries

Operations

& Services

Head Office Operations

Accounts Accounts Accounts

Country

Operations

International

Operations

Treasury

Operations

Domestic Operations

ZonesSubsidiary

Operations

Regions

Branches Branches

However, in the future it will need to modify its operating model to emphasize a fundamental shift in strategy

and business focus…..

Development of a

comprehensive

Human Resource

strategy

Transformation of

the planning

function to strategy

and performance

management.

Development of a

comprehensive

Customer

Relationship

Management

Strategy

Fundamental

restructuring of

branch network and

development of

alternative

distribution

channels

Automation/

transformation/

consolidation of

back-office

operations

Development of a

comprehensive IT

strategy/

investment

program

Development of capital

management strategy


Business Strategy

New Baroda Business Model/ Strategic Recommendations

The New Business Model illustrates a critical change in focus - to a customer-centric organisation. Hence all recommendations contained in the

body of the Business Strategy are directed at achieving the following strategic goals and objectives;

Domestic, International, and Subsidiary operations to be repositioned along Lines of Business - Rural, Personal, Business, and Corporate;

Customer focus to be defined and re-positioned - to reflect that all existing/ new products and services are directed to customer segments

via a multitude of channels;

Corporate Centre to reflect the proposed organisational structure/ corporate governance model; and

Improve operational effectiveness and efficiency, resource management, and performance management.

Head Office Operations

International

Operations

(Subsidiaries/

Branches)

Global Treasury Operations

Domestic Operations

Subsidiary

Operations

Human

Resources

Group

Strategy

Group

Risk

Management

Group

Technology

Group

Finance

Operations

& Services

Performance

Management

Corporate Centre

Baroda Rural

Baroda Personal

Baroda Business

Baroda Corporate

Projects

Office

Personal

Business

Corporate

Customers

Channels

Accounts Accounts

Domestic Operations

ZonesSubsidiary

Operations

Regions

Branches Branches

Critical to the attainment of the target workforce numbers and associated productivity improvement will be the

transition of branch-based transaction processing to centralised data/ transaction processing centres within

India.


Back-office

Processing

Teller Positions

Back-office Processing

(off-site/ outsourced)

Teller Positions

ATM

KIOSK

Financial Advisor

WWW.Baroda.com

Insurance Agent

Call Centre

(off-site/

outsourced)

Westpac recently announced

outsourcing of vouchers and

cheques to Unisys

Telephone

Banking

Thank you

business aspiration

Documents