Business Process Reengineering (in Theory) - MIS Lecture 9

Transcription

1 Business Process Reengineering (in Theory) - MIS Lecture 9 Prof. Dr. Elgar Fleisch 1

2 Learning targets Nature of and drivers towards business process orientation Nature and challenges of business process redesign 2

3 Agenda 1. What is BPR? 2. Business Process Orientation 3. Methods and Tools 4. Case Example Catering 3

4 What is BPR? 4

5 What is a business process? Quelle: Österle/Otto, IWI-HSG 5

6 Resistance to change ge Chang Economy, Society Company t 6

7 Happy living in kingdoms 7

8 Happy living in kingdoms 8

9 Happy living in kingdoms 9

10 Types of business processes Core processes Serve external customers Direct contribution to value creation Supporting processes Serve internal customers (core processes) No direct contribution to value creation Management processes Control of core and supporting processes Control of company 10

11 Old Process Quelle: Hammer (1990) 11

12 New Process Quelle: Hammer (1990) 12

13 Principles of Busines Process Reengineering Organize around outcomes, not tasks Have those who use the output of the process perform the process Subsume information-processing work into the real work that produces the information Treat geographically dispersed resources as though they were centralized Link parallel activities instead of integrating their results Put the decision point where the work is performed, and build control into the process Capture information once and at the source 13

14 IT as key enabler 14

15 Business Process Orientation 15

16 The Business Engineering Framework Strategy Business Process Information System 16

17 Business process model Process Development Measure Measure Project based process design Process Control Process cycle Output Chain of Tasks Task Task Task Information System Application Database Application Database 17

18 Business process model Process Development Measure Measure Project based process design Process Control Process cycle Output Chain of Tasks Task Task Task Information System Application Database Application Database 18

19 Granularity levels of business processes Process architecture Company-wide overview Configuration of the most important macro processes Macro process Most important process steps Micro process Work instructions to employee Workflow Work instructions to machines 19

20 Redesign and continuous improvement Organization t 20

21 Methods & Tools 21

22 Methods Source: Davenport,

23 Tools Process modeling Process simulation Workflow design IT Architecture 23

24 Reference models Shows an ideal / to-be model for a specific domain, including structures, features, relationships, and behaviour E.g. Reference process model for order processing in the paper industry Enables Efficient development of company-specific models Transfer of business administration know-how Efficient selection and development of information systems 24

25 Example: SAP Solution Map Telecommunications 11/24/

26 Case Example Catering 26

27 Process Architecture Old Production Menu Creation Procurement 1400 Locations (VW, Deutsche Bank, SAP ) Logistics Order Intake Procurement 20 Wholesale l Dealers Source: Prof. Dr. Thomas Gutzwiller 27

28 Characteristics Multiple wholesale dealers (ca. 20 main / national partners, 100 and more local partners, no real coordination) Low purchasing synergies 4 5 stops per day per location: High logistics costs Low margins 1400 replicated systems (same software, but 1400 different master data sets with regard to products and suppliers) Source: Prof. Dr. Thomas Gutzwiller 28

29 1: Identifying processes for redesign Production Menu Creation Procurement 1400 Locations (VW, Deutsche Bank, SAP ) Logistics Order Intake Procurement 20 Wholesale Dealers Source: Prof. Dr. Thomas Gutzwiller 29

30 2: Identifying change levers IT 1400 software installations, 1400 different configurations and master data sets Employees Managers: Proud businessmen, only a few opinion leaders No synergies in purchasing Secondary factors No Green-Field Approach; what is likely to be accepted? Managers new jobs because of centralization? New IT through centralization Small margins bring organizations at risk 30

31 3: Developing process vision Achieve purchasing synergies Strategy Process 1 principal wholesaler dealer and only a few local wholesale dealers (for vegetables etc.) Full transparency Improved margins Cost reduction for customers Process goals 1 stop per day per cantine Centralized menu creation Process goals 1 information system, 1 software application, 1 master data set 31

32 4: Understanding existing processes Define chain of tasks Measure process performance Identify problem areas (decentral purchasing, decentral menu composition) IT & organization 32

33 5: Designing the new process Production Menu Planning 1400 Locations (VW, Deutsche Bank, SAP ) Menu Creation Procurement 1 Category Management Logistics Order Intake Procurement 1M Main Wholesale l Dealer Source: Prof. Dr. Thomas Gutzwiller 33

34 Characteristics 1 system (1 software, 1 master data set) 1 principal p wholesale dealer, still some (but less) regional wholesale dealers esp. for vegetables Purchasing synergies, full transparency 1 stop per day per location: Reduced logistics costs Margins improved allowing price reductions to clients Central menu creation in conjunction with purchasing of items on action sale (i.e. a ship full of Argentinean beef) 34

35 Reading material M. Hammer: Reengineering Work: Don t Automate, Obliterate, Harvard Business Review, July-August 1990 Further Reading Th. Davenport: Process Innovation: Reengineering Work Through Information Technology, Harvard Business School Press,