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.

1. Business Process Reengineering
A Practical Guide to Positive Change

2. Agenda
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Background
Process Complexity
A Practical Approach to BPR
Applying BPR to Software Selection
Q&A
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3. Background
• Most organizations want to:
– Improve efficiency
– Improve customer service
– Simplify operations
– Reduce costs
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4. Background
• Organizations often look to:
– Computer systems and software
– Additional staff
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5. Background
• This often results in:
– Greater challenges
– Greater expense
• Without meeting the original goals
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6. 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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7. 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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8. 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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9. Process Complexity
Building Floor Plan
Length
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10. 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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11. Keep It Simple
Building Floor Plan
Length
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12. 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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13. 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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14. Simple Beginnings
Building Floor Plan
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Length
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15. Adding An Option
Building Floor Plan
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Length
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16. Broadening Your Offering
Building Floor Plan
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Length
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17. Adding Systems
Building Floor Plan
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Length
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18. Micro-Managing
Building Floor Plan
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Length
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19. Human Nature - Short Cuts &
Workarounds
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20. Common Outcomes
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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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21. What to Do?
The Four Steps:
• Understand
• Document
• Simplify
• Automate
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22. 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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23. 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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24. What Should You Ask?
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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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25. Capture Ideas
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Activities to start?
Activities to stop?
Activities to continue?
What’s working?
What’s not working?
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26. Questionnaire
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27. 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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28. Diagrams & Documents
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29. Simplify
• Identify processes that don’t add value
• Simplify where possible
• Eliminate duplication of effort
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30. Simplify
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31. 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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32. Deployment Options
Cloud/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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33. Process Improvement
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Selecting an issue
Brainstorming
Prioritizing
Cause-Effect Analysis
Brainstorm Solutions
Implement a Solution
Monitor & Stabilize
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34. Process Improvement - Cycle
Monitor &
Stabilize or
Change
Approach
Create an
Issue /
Opportunity
List
Prioritize
Issues
Implement
Improvement
Brainstorm
Cause & Effect
Brainstorm
Solutions
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35. 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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36. Prioritizing
Consider various aspects of each issue:
• Importance/benefit of an improvement
• Penalty
• Cost
• Time
• Risk
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37. 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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38. 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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39. Cause/Effect Analysis
The 4 Categories (4 M’s)
• Man
• Machine
• Materials
• Methods
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40. Fish-Bone Diagram
No training
Turnover
No integration
No security
Example: Data takes
too long to move
from shops to
foundation
In-box not clearly
labeled
Poor form layout
Lost form
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41. Brainstorm Solutions
• Same approach...
• Prioritize…
• Can start with low $ / low risk first
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42. Implement Solution
• Pick an implementation team
– Key stakeholders
– The right disciplines
• Can be phased
• Remember the 4 M’s
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43. 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
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44. Applying BPR to Software
Selection
A Managed Approach

45. 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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46. 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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47. Kano Model
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48. Methodology
• Based on Business Process Reengineering
• We recommend 6 steps:
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Preparation (Understand, Document, Simplify)
Evaluation
Selection
Planning
Implementation (Automate)
Monitor, stabilize & enhance
• Scalable to client needs
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49. 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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50. Step 1: Preparation
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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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51. Step 2: Evaluation
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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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52. Step 3: Selection
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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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53. Step 4: Planning
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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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54. Step 5: Implementation
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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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55. Step 6: Monitor, Stabilize & Enhance
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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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56. Questions & Answers
?
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57. Contact Info
We’re happy to help you with
any of your BPR needs!
Monument Cloud Solutions LLC
Jim.warner@monumentcloud.com
www.monumentcloud.com
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