business process re-engineering
Post on 12-Sep-2014
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Introduction to Business Process Re-engineering. A practical guide to positive change. Jim Warner, managing partner at Monument Cloud Solutions, discusses the background and application of BPR using a simple framework.TRANSCRIPT
Business Process Reengineering
A Practical Guide to Positive Change
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Agenda
• Background• Process Complexity• A Practical Approach to BPR• Applying BPR to Software Selection• Q & A
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Background
• Most organizations want to:– Improve efficiency– Improve customer service– Simplify operations– Reduce costs
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Background
• Organizations often look to:– Computer systems and software– Additional staff
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Background
• This often results in:– Greater challenges– Greater expense
• Without meeting the original goals
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Background
• The term ‘Business Process Reengineering’ was first coined in 1990 by Michael Hammer in the Harvard Business Review
• The main idea is to eliminate work that doesn’t add value, rather than automate it
• BPR provides a framework for development and deployment of information systems within the context of simplifying operations and reducing costs
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Background
• My experience with BPR goes back a little further…
• Hewlett Packard in the early 1980’s:– Driving a renaissance of quality & customer
service– Yokagowa HP & W. Edwards Demming• Demming Prize
– Tom Peters ‘In Search of Excellence’– Total Quality Control (TQC)
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Background
• HP’s Roseville Division– Extensive work with process & quality
improvement– High mix – low volume manufacturing– Created a predecessor to BPR – Had the insight to compare the distance a product
travels with the dimensions of the building
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Process Complexity
Length
Wid
th
Building Floor Plan
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Avoid Complex Processes
• Dimensions of building compared to length of process
• Number of stops, translations, workarounds• Time in transit• Number of places where information can be
lost• Complex decision processes cause errors &
rework
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Keep It Simple
Length
Wid
th
Building Floor Plan
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Re-engineering?
• The name suggests that processes were ‘engineered’ in the first place
• Sometimes true, but most likely not• Processes tend to grow and change over time
in an organic fashion
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Process Growth & Change
• Processes grow and change over time• Most are simple to begin with• Organizations start with ‘One thing’, then
move on to ‘Two things’, ‘Three things’, etc.• Exception handling is added• Key knowledge becomes siloed in various
parts of the organization• Key knowledge often leaves with turnover
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Simple Beginnings
Length
Wid
thBuilding Floor Plan
1
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Adding An Option
Length
Wid
thBuilding Floor Plan
1
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Broadening Your Offering
Length
Wid
thBuilding Floor Plan
1
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Adding Systems
Length
Wid
thBuilding Floor Plan
1
2
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Micro-Managing
Length
Wid
thBuilding Floor Plan
1
2
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Human Nature - Short Cuts & Workarounds
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Common Outcomes
• Short cuts & workarounds are added• Key knowledge is lost or is in-accessible• No one knows the whole process• Customer satisfaction goes down• Employee satisfaction goes down• Costs go up• Process won’t scale
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What to Do?
The Four Steps:• Understand• Document• Simplify• Automate
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Understand
• Understand what is happening in your organization right now
• Organizations often think they understand their processes, but can be surprised!
• One department often doesn’t know what the others do
• The Four Questions
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The Four Questions
• Who are my customers?– External?– Internal?
• What is my product or service?• What is my process for delivering my product
or service?• How can I improve my product or service?
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What Should You Ask?
• How is the system being used?• Where are the bottlenecks?• Where are errors commonly made?• What are the workarounds?– Spreadsheets?– Documents?– Notes/emails?
• Where is data being reentered?
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Capture Ideas
• Activities to start?• Activities to stop?• Activities to continue?• What’s working?• What’s not working?
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Questionnaire
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Document
• Document what’s happening now• If we can’t document it, then we haven’t
understood it• Highlights duplicate processes• Highlights gaps in knowledge• Helps create a shared understanding
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Diagrams & Documents
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Simplify
• Identify processes that don’t add value• Simplify where possible• Eliminate duplication of effort
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Simplify
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Automate
• Can be existing or new systems• Can eliminate manual processes to reduce
time and errors• Don’t have humans do things a computer can• Keep/Make/Buy decisions• Software selection process
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Deployment OptionsCloud/Vendor Hosted
Client Hosted
• Simplifies client infrastructure and management
• Lower up-front costs• Higher up-time of the application• Data security, backup and restore
is build in• Easier to manage access beyond
the building’s boundaries• Requires good internet access
• Traditional approach that most IT operations are comfortable with
• Can create a more secure feeling – we own/control the data
• Higher upfront costs• More infrastructure &
management required• Can be lower up-time
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Process Improvement
• Selecting an issue• Brainstorming• Prioritizing• Cause-Effect Analysis• Brainstorm Solutions• Implement a Solution• Monitor & Stabilize
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Process Improvement - Cycle
Brainstorm Cause & Effect
Create an Issue /
Opportunity List
Brainstorm Solutions
Implement Improvement
Monitor & Stabilize or
Change Approach
Prioritize Issues
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Brainstorm Issues
• Generate as many ideas as possible in 20-30 minutes
• Don’t debate or change ideas (quantity more important than quality)
• Encourage everyone to participate – go around the room
• Keep going until all the ideas have been presented
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Prioritizing
Consider various aspects of each issue:• Importance/benefit of an improvement• Penalty• Cost• Time• Risk
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Prioritizing - Methods
Goal is to find the most important issue• Gut feel – fastest but can be biased• Trial & error – make the list ‘look right’• Priority groups – high, medium & low• Bubble sort – thorough & fairly simple• Prioritization matrix – most thorough – ranks
issues according to criteria
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Bubble-Sort Prioritizing
• Start at the bottom position• Compare the item on the bottom with each of
those above• If the bottom item is a higher priority with it’s
comparison item, swap them• Continue comparing the bottom item until you’ve
compared all the way to the top• Move up to the second to the last item & repeat• Repeat until you’ve moved up to the top of the list
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Cause/Effect Analysis
The 4 Categories (4 M’s)• Man• Machine• Materials• Methods
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Fish-Bone Diagram
Example: Data takes too long to move from shops to foundation
Man
Machine
Mat
eria
ls
Met
hods
No integration
In-box not clearly labeled
No training
Poor form layout
Turnover
Lost form
No security
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Brainstorm Solutions
• Same approach...• Prioritize…• Can start with low $ / low risk first
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Implement Solution
• Pick an implementation team– Key stakeholders– The right disciplines
• Can be phased• Remember the 4 M’s
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Monitor & Stabilize
• Monitor key process measures– Time to complete something– Error rate– Time spent in re-work
• Stabilize– Train & manage for consistent results– Understand out of bounds data– Implement minor corrections
Applying BPR to Software Selection
A Managed Approach
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Why is it important? Early Influences
• IT – Definition of system failure:– Not being used
• Auto industry experience– Auto workers – if they don’t like it, it will break
• Aviation industry experience– It must not break– Critical systems
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Software Satisfaction
• Two choices:– Adapt your process to fit the software– Select/Configure/Customize the software to fit
your process• If the process is core to your mission, the
latter is much better
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Kano Model
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Methodology
• Based on Business Process Reengineering• We recommend 6 steps:
1: Preparation (Understand, Document, Simplify)2: Evaluation3: Selection4: Planning5: Implementation (Automate)6: Monitor, stabilize & enhance
• Scalable to client needs
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Benefits
• The BPR process raises the team awareness with what you’re looking for and why
• Takes current technology into account• Reduces vendor bias• Reduces the chance of buying vaporware• Ensures the best software fit with your
organization
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Step 1: Preparation• Select the project team & roles (those that will be involved in the selection process)• Review your organization’s mission and objectives• Interview the existing users and document the existing processes• Interview the stakeholders beyond the system boundaries & document
needs/concerns• Identify integration points with other systems• Identify gaps and workarounds such as spreadsheets, documents, emails, etc.• Simplify or eliminate process steps where possible• Conduct an IT review of the existing servers, network & workstations• Evaluate the organizations IT plans for growth and new technology (Cloud, Mobile,
BYOD, etc.)• Evaluate deployment options (Client hosted, vendor hosted, SaaS)• Develop the software business case (Optional)• Develop a shared vision for the new system• Develop preliminary budget
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Step 2: Evaluation• Gather & prioritize requirements• Create a Request for Proposal (RFP) document• Create an initial list of potential vendors• Define decision criteria• Send out the RFP • Initial review of RFP responses• Schedule demos• Check references• Review customer support and service (vendor, reseller, consultant, ect)• Review Implementation expertise• Review vendor stability (financial, business plans, leadership team, customer base)• Review vendor product/technology roadmap• Review Total Cost of Ownership (TCO)• Fit/Gap analysis• Review 1 to 5 year budget for each vendor• Trim the list of potential vendors
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Step 3: Selection• Inviting shortlisted vendors for a site visit• Review further demos• Evaluate implementation plans• Identify the best-fit solution• Audit the selection process• Management approval• Internal selection announcement• Notify winning and losing vendors• Legal review of contract• Negotiate contract• Initial data conversion strategy
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Step 4: Planning• Refine implementation plan & develop milestones & schedule• Review & negotiate any scope changes• Review/Finalize data conversion strategy• Review/Finalize implementation plan & schedule• Develop training plan• Plan for parallel operation of new & old systems
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Step 5: Implementation• Implementation kickoff• Track progress vs. schedule & milestones• Execute training plan• Execute data conversion• Verify integration with other systems• Verify & signoff on new system• Go-live on new system• Ramp up users on new system• Restrict access to old system
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Step 6: Monitor, Stabilize & Enhance
• Review system acceptance (user feedback)• Collect issues/change requests• Report issues/change requests to vendor• Conduct additional training• Implement fixes/enhancements
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Questions & Answers
?
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Contact Info
We’re happy to help you with any of your BPR needs!
Monument Cloud Solutions [email protected]
www.monumentcloud.com