Management for Professionals

Transcription

1 Management for Professionals

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3 Sanjay Mohapatra Business Process Reengineering Automation Decision Points in Process Reengineering

4 Sanjay Mohapatra Xavier Institute of Management Bhubaneswar, Orissa, India ISSN ISSN X (electronic) ISBN ISBN (ebook) DOI / Springer New York Heidelberg Dordrecht London Library of Congress Control Number: Springer Science+Business Media New York 2013 This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, speci fi cally the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on micro fi lms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. Exempted from this legal reservation are brief excerpts in connection with reviews or scholarly analysis or material supplied speci fi cally for the purpose of being entered and executed on a computer system, for exclusive use by the purchaser of the work. Duplication of this publication or parts thereof is permitted only under the provisions of the Copyright Law of the Publisher s location, in its current version, and permission for use must always be obtained from Springer. Permissions for use may be obtained through RightsLink at the Copyright Clearance Center. Violations are liable to prosecution under the respective Copyright Law. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a speci fi c statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. While the advice and information in this book are believed to be true and accurate at the date of publication, neither the authors nor the editors nor the publisher can accept any legal responsibility for any errors or omissions that may be made. The publisher makes no warranty, express or implied, with respect to the material contained herein. Printed on acid-free paper Springer is part of Springer Science+Business Media (

5 Dedicated to Late Parmananda Mishra Late Dr. Sushila Mishra Dr. B C Mohapatra and Mr. H K Mohapatra Mrs. K K Mohapatra

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7 Preface Business Process Re-engineering (BPR) is a powerful approach to bring in extraordinary improvements in the output of an organization. This is achieved through radical changes in the processes which are keys to the success of the fi rm. Many organizations have bene fi ted from this approach. In today s world where the market dynamics change quite often, organizations need to work harder to remain competitive. In a globally competitive market these companies need to improve the outputs from their processes dramatically and at a fast pace. This can happen by automating the re-engineered processes. This helps in sustaining implementation of the re-engineered processes, increasing consistency of the output as well as making processes result oriented and transparent through work fl ow management. With the rapid penetration of Internet, information technology has become all pervasive. From being an enabler of business in the past, it now partners with business strategy to provide direction to the business. Automation using technology has become critical organization asset, source of strategic advantage. Increasingly, success of an organization depends on its ability to gather, produce and disseminate knowledge through a systematic process orients approach will be key to success of business. Using re-engineering approach, processes can be redesigned and streamlined so that roles can be assigned to different processes as owners. Using the work fl ow method, service-level agreements can be de fi ned for internal and external customers so that effectiveness of different outputs from the process can be measured. Automating the work fl ows and re-engineered processes can increase consistency of process performance with increase in sustainability in implementing processes so that interpretation of processes across the organization is same. Thus, role of automation for re-engineered processes play a vital role. To compete in an ever-changing business environment, it is essential that the managers have adequate information about the parameters that impact global competitive environment. These changes require ef fi cient, accurate information to fl ow seamlessly to the managers. With rapid advancement of Internet, extranet and intranet, technology has increased the capabilities of an organization in terms of its reach for information from different geographies. With availability of information through vii

8 viii Preface technology from different remote locations, managers can respond to different problems and situations faster and with increased ef fi ciency and capitalize on market opportunities. By using technology-based online analytical engines, business intelligence and knowledge management practices, managers can get better returns on investment from its investment in re-engineered processes. This will help them to retain competitive advantage. Mere de fi nition of processes will not be enough. The processes need to be implemented with correct intent and proper alignment of business goals with objectives of the processes. The biggest stumbling block in this alignment is the resistance offered by the practitioners who are quite familiar with the current processes. As the law of inertia implies (Newton s law of inertia), there will be a challenge for the employees to change the present state of behaviour to a new state of behaviour in the context of new processes. A framework-based scienti fi c approach will help in reducing mistakes while implementing new processes. Chapters 7 and 8 talk about the framework and cases that can help readers understand the nuances of behavioural aspects in change management. This book attempts to show decision points where re-engineered processes need to be automated so that a fi rm can get maximum returns on investment. All the reengineered processes cannot be automated as it would lead to high investment making the investment a white elephant. Through framework and case studies, the book will guide its readers on how to re-engineer processes and when to automate these processes. The book can be used by students in management schools who are specializing in General Management, Strategic Management, Information System, and Operations Management. The book can be used also by consultants who are in Management Consulting, Technology Consulting and who are playing the role of Business Analysts. I hope the readers would like the contents and style of writing and would be happy to receive feedback for further improvement. Bhubaneswar, Orissa, India Sanjay Mohapatra

9 Acknowledgements The production of any book of this magnitude involves valued contributions from many persons. I would like to thank Amboy Matthew for providing continued editorial support and making this project a reality. His association and patronage has become a motivational factor for me to write and publish with Springer. The manuscript has been class tested. It has undergone 2 years of discussions and reviews in the class, and I thank my students who have helped me in reviewing and providing feedback so that I could complete the manuscript. I would like to mention the names of the following students whose efforts shaped the fi nal manuscript: Swavab Sourav Moharana, Priyabrata Das, Rabindra Jena, Purbesh Mahapatra, Hemant Sharma, Anuj Das, Shilpi Sandwar, Bagdevi Panda, Abhijeet Das, Binay Prasanna Jena, Tuktuk, Kanmaani, Anindita Patnaik, Pinakini Mohanty, Ashutosh Didwania, Ashish Kailash Sharma, Rani Jain, Sameer Sawant, Sudip Ghosh, Kanti Prakash Brahma, Sandeep Swain, Suchismita Gupta, and Aurelie Tockqueville. Last but not the least, I would like to thank Dr. Bharati (my wife) for helping me in taking decisions at a critical stage of the manuscript. Bhubaneswar, Orissa, India Sanjay Mohapatra ix

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11 Contents 1 Business Process Reengineering: A Consolidated Approach to Different Models Background Introduction Office Process Reengineering and Change Management Traditional Businesses and Problems History and Development of Business Process Reengineering What Is Business/Office Process Reengineering? Understanding Office/Business Process Reengineering A Different Approach in the Government The Reengineering Vision Reusable Technology The Principles of Reengineering Process Reengineering Methodologies Selecting Methodology for Process Reengineered RTI Role of Information Technology in BPR Change Management Intervention Models Change Management Process Sponsor Activities and Sponsor Roadmaps Resistance Management Data Collection, Feedback Analysis, and Corrective Action Celebrating and Recognizing Success The Benefits of Reengineering Ensuring Reengineering Success Possible Impediments to Success Business Process Reengineering Principles of Reengineering xi

12 xii Contents 1.18 A Consolidated Framework Pictorial Representation of Different Methodologies Summary Bibliography The Need for BPR and Its History Executive Summary Objective Introduction TQM, Six Sigma, and PIP: The Precursors Total Quality Management Six Sigma Process Improvement Process Business Process Reengineering: A New Paradigm Why BPR? Two Cases Difference Between PIP and BPR Conclusion Bibliography Business Process Reengineering: Framework and Approach Learning Objective Introduction BPR Framework Develop the Business Vision and Business Objective Choosing the Process to Be Redesigned Human Resource Function Finance and Accounts Function Material Management Function Office Automation and MIS Function Administration Functions Understanding and Measuring the Existing Processes Redesigning the Processes Information as Technology Enabler Prototyping Pilot Test Continuous Improvement Reengineering Methodologies BPR Implementation Approach BPR Implementation Approach BPR Implementation Approach BPR Implementation Approach BPR Implementation Approach Best Approach Case of Ford Motor Company... 65

13 Contents xiii 3.14 Conclusion Bibliography Business Process Management (Process Life Cycle, Process Maturity) Objectives Historical Background Defining Business Process Management Drivers and Triggers for BPM Business Process Modeling Process Management Process The Activities Involved in Process Management Definition Process Implementation Activities Improving Processes Through Change Management Process Life Cycle Process Life Cycle Stages Process Maturity Level 1: Initial Organizations Level 2: Managed Organizations Level 3: Standardized Organizations Level 4: Predictable Organizations Level 5: Optimizing Organizations Case Study Siemens: An example of Achieving/Implementing Process Maturity Summary The Golden Rules for High Maturity Process Implementation Bibliography Organization Life Cycle and Its Relationship with Process Reengineering Learning Objectives Introduction Organizational Life Cycle Model Downs Model: Motivation Based Lippitt and Schmidt Model: Management Concerns Scott Model: Strategy and Structure Greiner s Model: Crisis Leading to Transition Torbert s Model: Organizational Mind-Set Lyden: Functional Focus Katz and Kahn: Organizational Structure Adizes: Organizational Activities... 98

14 xiv Contents Kimberly s Model A Generic Organization Life Cycle Model Stage 1: Birth Stage Stage 2: Growth Stage Stage 3: Maturity Stage Stage 4: Decline/Revitalization Stage Organization Characteristics and Metrics During OLC Stages Organization Characteristics During OLC Stages Organization Metrics and Tools/Techniques During OLC Stages Action Steps to Be Taken During OLC Stages Effect of Organization Life Cycle on Board of Directors Framework to Determine Organization Evolution: S-Curve S-Curve: A Framework to Determine Stages of Organizational Evolution Mapping of OLC to Growth in Organisms: Principle of Homeokinesis Homeokinesis: A Framework to Map Growth in Organization to Growth in Organisms Transition from Stage 3 to Stage 2 of Organization Life Cycle Reasons for the Transition of an Organization from Stage 3 to Stage Mapping of Process Life Cycle with Organization Life Cycle Process Life Cycle Mapping of Process Life Cycle with Organization Life Cycle Organization Life Cycle for Nonprofit Organizations Overview of Nonprofit Organization Life Cycle Characteristics of Nonprofit Organization Life Cycle Case Study: Computer Sciences Corporation Stage 1: Birth Stage 2: Growth Stage 3: Maturity Stage 4: Decline/Revitalization Summary Business Process Modelling Learning Objective Why Do We Need Business Processes? Business Process Modelling BPM Background Process Modelling Requirements Step-by-Step Procedure for BPM

15 Contents xv 6.4 Service-Oriented Architecture Simulation and Optimization Process Modelling Standards Business Process Modelling Steps Business Process Connections Assessing Reengineering Assessment Issues Has the Organization Changed Its VMG (Vision, Mission, Goals)? Is the New Process Delivering Desired Results? Workflow Modelling My Definition of Workflow The Key Benefits of Workflow Types of Business Process Submodel Private (Internal) Business Processes Abstract (Public) Processes Collaboration (Global) Processes Weaknesses of the Business Process Models Case Steps Workflow Management and BPM: Difference ROI Reducing Costs Competitive Advantage Calculating ROI Common ROI Pitfalls Case Study Business Framework Versus Model Summary Bibliography People Issues with BPR and Change Management Objectives Introduction What Is Change Management? Importance of Change Management and People in BPR Major People-Related Issues in BPR Change Management Frameworks McKinsey s 7S Framework: Analysis Phase Change Management Heat Map End-to-End Change Management Framework Best Practices in Managing Change During a BPR Exercise Case Study: SAP HR/Payroll Implementation at Toyota Australia

16 xvi Contents Challenges Change Management Process Outcomes Summary Bibliography Change Management Approach in Implementing BPR Objective Background BPR Implementation Initiate Strategic Change Current Process Diagnosis Process Redesign Plan the Implementation and Go Live Monitor Process and Feedback The Iron Triangle Managing Change Managing the Change: People Focus A BPR Case Study Summary Bibliography BPR and Malcolm Baldrige National Quality Program Objectives of the Report Background Review What Is MBNQA? To Improve National Competitiveness Through B Case Study Why Use MBNQA as a Performance Management Program? Brief Overview of the Criteria Baldrige National Quality Program Self-Assessment Process Feedback and Improvement Process Core Values and Concept Future Outlook: Alignment of TQM and Balance Scorecard: An Integrated Overview Case Study: A Conclusive End Motorola Bibliography BPR and Automation Learning Objectives Introduction Business Process Reengineering Recommendations for BPR Business Process Automation

17 Contents xvii 10.4 Considerations for Automation Prioritization for Automation Conclusion Summary Bibliography TQM and BPR A Brief History Definition Critical Success Factors BPR Methodology Total Quality Management Introduction Origins of TQM TQM Principles Deming s Approach Making TQM Work Implementing TQM BPR and TQM Quality Function Deployment QFDs and the Voice of Clients The Quality Focus Methodology Used Conclusion Bibliography Case Study: AEGON Religare Introduction Objective Challenges Solution Lead Management System Case Management System Sales Management System Agency Portal System Incidence Management System Business Benefits Summary Bibliography Glossary Index

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