business process improvement & innovation

8/6/2019 Business Process Improvement & Innovation

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BPR Prof. T.S. Lee 1

Business Process Improvement &Innovation

Total Quality Management & Business Process Reengineering

T.S. Lee, Ph.D.Professor & Dean

Faculty of Business Administration

The Chinese University of Hong Kong


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2BPR Prof. T.S. Lee

Agenda Business Process Reengineering An Integrated Framework Total Quality Management BPR Implementation Steps Impact of BPR on Working Environments BPR Failures References

Michael Hammer & James Champy, Reengineering the Corporation,Harper Business, 1993.

Michael Hammer & Stephen A. Stanton, The Reengineering

Revolution, Harper Business, 1995.


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3BPR Prof. T.S. Lee

A Story Nobody


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4BPR Prof. T.S. Lee

This is a story about 4people:

EverybodySomebody

Anybody

Nobody


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5BPR Prof. T.S. Lee

There was an important

job to be done ....


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6BPR Prof. T.S. Lee

Everybody was sure that Somebody woulddo it.

Anybody could have done it but Nobody did

it. Somebody was upset because it was

supposed to be Everybodys job.


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Everybody thought Anybody could do it.

But Nobody realized that Everybody wouldnot do it.

It ended up that Everybody blamedSomebody when Nobody did whatAnybody could have done.



Division of Labor Professionalism

Functional departments of an

organization Contributing to efficiency

Lacking holistic view



Business Process Reengineering



Business Process Reengineering

Holistic View

Dramatic



Home KCR F.L. T.W. T.P. Univ. KKL (BA)

(SS) (SS)

Walking 15 5 20 5 5 50 Minibus 10 5 20 5 5 45 Taxi S.S. 5 5 20 5 5 40

Taxi KKL 30 30



Home KCR F.L. T.W. T.P. Univ. KKL

(SS) (SS)

Can we cut the cycle time to 15minutes?

Move Home----Reengineering Approach



Multiple Assessment Criteria for Multiple

Performance Measures

Home KCR F.L. T.W. T.P. Univ. KKL(BA)

(SS) (SS)

Walking Slower but may be healthier Taxi KKL Faster but costs more

Multiple Performance Measures: cycle time, costs, health, stress

Assessment Criteria: Mean, Mean-Variance, Stochastic Dominance



Reengineering

It is the fundamental rethinking andradical redesign of businessprocesses to achieve dramaticimprovements in critical, contemporary

measures of performance, such ascost, quality, service, and speed.

Michael Hammer & James Champy. Reengineering the Corporation. HarperBusiness, 1993.



Key words: Fundamental

It ignores what is and concentrates on whatshould be.

Radical It is about business reinvention - not business

improvement, business enhancement, orbusiness modification.

Dramatic It asks for dramatic improvement, not marginal

improvement.

Process It is process-based instead of task-based

thinking.



Field Salesman

Request for

financing

Office Staff

Fill in request

form

Credit Dept

Key in computer

Check credit

Write result

Business Practice

Input info in

computer

Attach terms to

request form

Pricer

Input in computer

Estimate interest

rate

Write rate on paper

Attach with other

forms

Field Salesman

Receive

financing

info

Clerical Group

Administrator turn

all info into

quotation letter

Deliver by Federal

Express

IBM Credits Process Flow for Financing (Original)



Field Salesman

Request for

financing

Office Staff

Fill in request

form

Credit Dept

Key in computer

Check credit

Write result

Business Practice

Input info in

computer

Attach terms to

request form

Pricer

Input in computer

Estimate interest

rate

Write rate on paper

Attach with other

forms

Field Salesman

Receive

financing

info

Clerical Group

Administrator turn

all info into

quotation letter

Deliver by Federal

Express

IBM Credits Traceability Problem



Field Salesman

Request for

financing

Office Staff

Fill in request

form

Credit Dept

Key in computer

Check credit

Write result

Business Practice

Input info in

computer

Attach terms to

request form

Pricer

Input in computer

Estimate interest

rate

Write rate on paper

Attach with other

forms

Field Salesman

Receive

financing

info

Clerical Group

Administrator turn

all info into

quotation letter

Deliver by Federal

Express

IBM Credits Cycle Time Reduction Project



Field Salesman

Request for

financing

Deal Structurer

Co-ordinate

entire process

Field Salesman

Receive

financing

info

Specialists

Decision by

expertise

IBM Credits Process Flow for Financing

(Reengineered)

Complicated

Problems?

New

Sophisticated

computer

system (DSS)

New

Sophisticatedcomputer

system (DSS)

Yes

No



Results:

Cut down lead time to 4 hours Increase no. of deals for 100 times

A dramatic performancebreakthrough by making a radicalchange to the process as a whole



STEP NAME OUTCOME ELAPSED TIME

1 Frame the Project FrameworkStatement

2 weeks - 6 months

2 Create Vision, Values &Goals

Vision, Values &Goals Statement

1 day - 2 weeks

3 Redesign BusinessOperations

Blueprint 1 month - 2 months

4 Conduct Proof ofConcept

Benefits Statement 2 weeks - 6 months

5 Plan the Implementation Implementation Plan 2 weeks- 4 weeks

6 Get ImplementationApproval

Funded ResourceRequest

1 week - 2 weeks

7 Implement the Redesign MeasurementResults

6 months - 3 years

8 Transition to aContinuousImprovementEnvironment

Higher PerformanceStandards

Ongoing

sSource : Dorine C. Andrews and Susan K. Stalick, Business reengineering : The Survival Guide,Source : Dorine C. Andrews and Susan K. Stalick, Business reengineering : The Survival Guide,

Yourdon Press, Prentice - Hall, 1994.Yourdon Press, Prentice - Hall, 1994.

BPR Implementation Steps



Integrated Framework For

Business ProcessImprovement\Innovation

Focused

Restructure

Focused Process

Improvement

Continuous

Improvement

Business Process

Innovation

Fast Measured

Pace of Change

Tactical

Strategic

DegreeofC

hange


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23BPR Prof. T.S. Lee

Total Quality Management(TQM)

TQM is a management philosophy

with the following characteristics: Process for continuous improvement

Team approach

Involving business partners customers

& suppliers Applying statistical quality control


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TQM

The essential concepts of quality management

What is quality?

How important is quality?

Is there trade-off between quality and poductivity?

Does it cost to raise quality?

Is there universal model for implementing TQM?


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Typical TQM model can be represented by

Malcolm Baldrige National Quality Award.

ISO9000 series are the infrastructure of

quality assurance systems of TQM.


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Customer and Market Focused

Strategy and Action Plans

(1)

Leadership

(5)Human Resource

Development &

Management

(2)Strategic

Planning

(3)

Customer &Market

Focus

(6)

ProcessManagement

(7)

Business

Results

(4)

Information and Analysis

Baldrige Award Criteria Framework:

A Systems Perspective


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1997 Award Criteria ItemListing

1997 Categories / Items Point Values

1 Leadership 110

1.1 Leadership system 80

1.2 Company responsibility & citizenship 302 Strategic Planning 80

2.1 Strategic development process 40

2.2 Company strategy 40

3 Customer and Market Focus 80

3.1 Customer and market knowledge 40

3.2 Customer satisfaction and relationshipenhancement

40

4 Information and Analysis 80

4.1 Selection and use of information and data 25

4.2 Selection and use of comparative information anddata

15

4.3 Analysis and review of company performance 40


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1997 Award Criteria Item

Listing

1000Total Points

206.3 Management of supplier and partnering processes

305.3 Employee well-being and satisfaction

1307.5 Company-specific results

257.4 Supplier and partner results

357.3 Human resources results

1307.2 Financial and market results

1307.1 Customer satisfaction results

4507 Business Results

206.2 Management of support processes

606.1 Management of product and service processes

1006 Process Management

305.2 Employee education, training, and development

405.1 Work system

1005 Human Resource Development and Management

ValuesPoint1997 Categories / Items


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Impact of BPR onWorking Environment


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Working unit Change from functional unit to project

team Characteristics of work

Change from simplicity & focus tomultiplicity

Role of staff Change from passive to proactive


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Human Resources Development Change from training to educating

Appraisal Criterion Change from activity based to

performance based


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Promotion Criterion

Change from performance to

competence based Value system Managers role

Change from supervisor to coach

Organization structure

Change from vertical to horizontal


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Not fundamental enough Not focused on process No respect to common values and beliefs

Compromise Give up Bottom up approach Leadership not strong enough

Lack of resources Takes too long Fail to handle resistance


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An Approach to Enlightenment


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The Verse of Monk Shen-hsiu

This body is the Bodhi-tree;

The mind is like a mirror bright.

Be diligent to constantly keep it clean,

Thus let no dust alight.


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Q & A


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Thank you very much!

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