Pmi Bpr Presentation

Business Process Re-engineering (BPR) PK Solutions, Inc. Pat Vaia, PMP President & Executive Adviser

Date: May 11, 2006

Business Process Re-engineering BPR Concepts & Good Project Management Practices  Capture, communicate and verifying

current and redesigned business processes

 Practical aspects of conducting a BPR effort  Produce deliverables  Know who your customer/s are – everyone you interface with !!!!!!

Objectives of a BPR Effort Consider general process redesigning principles Improve business processes Opportunity identification Feasibility analysis Set goals for redesigned process components Processes Activities Deliverables

Principles of BPR General Principles Simplicity Empowerment Process Design Think horizontally

Organizational Structure Remove barriers Support business processes Customer Interfaces Work from the customer perspective Automation Automate to advantage

Simpler is Better

Avoid Over-engineering Work hard to simplify Eliminate multiple points of contact with & for the customer Eliminate errors resulting from multiple contacts Eliminate need to reconcile differing information Reduce delays resulting from reconciliation REMEMBER: Simple Processes Less Costly

Enable Workers to Make Decisions Vertical Compression Process decision-making is not strictly a management task Workers are empowered Decision-making becomes part of work Advantages Fewer Communication Delays Lower Management Overhead Better Customer Response

Perform Steps in Natural Order Parallel tasks rather than sequential procedure Precedence set only by need Speed up the process by: Accomplishing tasks simultaneously Reducing time lag between early and late steps • Less chance of changing requirements • Less need for rework

Multiple Version Processes Single solution process One-size-fits-all Too complex for standard/simple cases Processes require flexibility for: Different markets Different situations Resource variations Special customer requests Reengineered process contains: Simple, standard path (80% - 90%) Exception handling path (8% - 18%) Large complex path (2%)

Perform Work Where It Makes Sense Administrative tasks performed by the process team Small purchases Tasks not requiring a specialist

Work off-loaded from team Specialized capabilities More cost-efficient

Reduce Audits Checks and Controls Controls cost more than purchases Use only when it makes economic sense Implement aggregate or deferred controls

Reviews and Inspections Designs quality into a process Identifies problems when they occur Downstream inspections • breaks down team spirit • does little to improve quality • adds higher costs • Ex: Rework Checks, controls and inspections add no value for the customer

Combine Several Jobs into One Assign multiple process activities to one person Avoid the Industrial Revolution Division of tasks Specialization of labor Unskilled work force No need for communication Create Task Interrelationships

Organize Around Processes Formation of teams to perform an entire process Do not split work by function (organization) Teams co-located Each person understands another's responsibility • Cross-Training

Eliminate/minimize hand-offs Reduces delays, errors and rework Reduces management overhead

Adopt Customer Perspective Accessibility Be available when the customer wants to interact Information Require only the data which cannot be captured elsewhere Wants and Needs What are the customers goals, objectives - wants and needs? Are we meeting these? Are there unknown wants?

Provide Single Point of Contact Case manager role Single point of contact Process “owner” Has access to all people and information systems involved in the process Empowered by management to change the process

Automate Appropriately Avoid Costly Automating for Automation’s Sake Weigh automation benefits against costs • Technology acquisition • System development and maintenance • Work force training • Obsolescence

Avoid automating current processes unless needed Do wrong things faster Slows changes to effect improved processes Automate Repetitive Tasks Automation strong point Leave interesting jobs for people  Business Decision

Where to Look for Process Improvement

Process Improvement Opportunity Driven Begins with current process workflow Focuses on process components Identifies opportunities for incremental improvement Use as a checking mechanism for approach Incremental Products and services Resources Activities Organizations Interim deliverables

Performance Inhibitor Look for “A factor which negatively affects the business’s ability to attain its goals” Result from: • Poorly designed or not designed processes • Invalid assumptions • Environmental influences Presents a source for process improvement or reengineering opportunities

Opportunity “A chance for improvement in a business process that allows goals to be attained (fully or partially)” Business process may have multiple opportunities Each opportunity should be weighed • Costs • Benefits • Risks • Priority of the goals it supports

Product and Service Opportunities Customer How can the customer’s wants and needs be better understood? Are the customer’s wants and needs being met? Are there other markets for the products? Product / Service What improvements or added value can be made to products and services? Are products and services provided in a correct and convenient form?

Resource Opportunities Suppliers (Who are the Suppliers – Inputs) How can we communicate our wants and needs? Can we assist in improving our supplier’s performance? Are there other suppliers capable of providing resources? Resources What is state of the art? • Material - quality, technology • Finances - cost of funding • Labor - skill set, training Are resources provided in a correct and convenient form?

Activity Opportunities Cost Can the activity make more efficient use of resources? How can non-valueadding activities be minimized? Timeliness How can wait time (in-queue time) be reduced? How can lag time (out-queue time) be reduced?

Performance Is the activity performed by the proper organization or role? Do the performers of the activity possess the proper skills, training, etc.? Is the proper environment and equipment available to the activity’s performers?

Organizational Opportunities Manufacturing Companies

Field Operations

Finance

Production

Effectiveness Is the location structured to effectively perform its activities? Do the proper skills exist within the organization? Interaction How can the number be reduced to minimize hand-offs (workflows)? Is it conveniently

Interim Deliverable Opportunities Quality How can the quality of the deliverables be improved? How can deliverables be made more usable by the receiving activity? Timeliness How can deliverables be passed between activities more quickly? How can the number of workflows be minimized?

Opportunity Analysis Cost / Benefit Analysis Immediate (one time) costs On-going costs Immediate (one time) benefits On-going benefits Risk Analysis Risk identification Cost Likelihood

Goal Analysis Goal/s are met (supported) by the opportunity Priority of these goals

Classification of Goals

Operational Goals Quantify the redesigned business process Target the day-to-day operations of the business process Address The process as a whole Individual activities Interim and ultimate deliverables

Business Process Goals Set performance levels for the entire business process in term of: Responsiveness • What will be the interval from the initiating event to the ultimate deliverable? Financial • What is the value of this process? • How much does/will the process cost to perform? Organization • What will the organizational structure look like? • What will be the staffing levels?

Activity Goals Set performance levels (Metrics) for individual activities in terms of: Timing • How long will it take to perform? • How long will work wait (in-queue, out-queue) before it is performed? Cost • How much will it cost to perform? • What is the value added to the ultimate deliverable? Performance • What are the performance measures assigned to the person (organization) performing this activity? • What incentives and/or consequences are in place for meeting this activity’s goals?

Deliverable Goals Set performance levels for interim and ultimate process deliverables in terms of: Quality • How will we measure quality? • Of these measurements, what level will we attain? Efficiency • How quickly will this deliverable be passed between activities? • What form will the deliverable be in when passed? Cost • How much will it cost to pass this deliverable to the next activity?

Defining & Quantifying Goals

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