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‫‪26/12/2021‬‬
College of Computing and Informatics

IT342
Enterprise Systems
 IT342 - Enterprise Systems
Module 12 - EPMS for Business Process
Improvement – Part 1
Contents

1. Business Process Reengineering and Strategic Planning for

Enterprise Business Process Reengineering

2. Selecting Business Processes for Business Process

Reengineering
Weekly Learning Outcomes

1. Understand Business Process Reengineering

2. Understand Enterprise Business Process Redesign or
Reengineering Methodology
3. Understand Enterprise-Wide Continuous Improvement
Programs
 Required Reading
1. Chapter 15: EPMS for Business Process
Improvement
Recommended Reading
1. Dunn, C., Cherrington, J., & Hollander, A. (2005). Enterprise
information systems: A pattern based approach (3rd ed.). New
York: McGraw Hill Higher Education. ISBN: 007240429 (print),
9781308469676 (e-text).
2. Business Process Reengineering
https://www.youtube.com/watch?v=IZHqAo4QryE
This Presentation is mainly dependent on the textbook: Enterprise Information Systems: Contemporary Trends and Issues
EPMS for Business Process Improvement
EPMS for Business Process Improvement

• Process improvement programs range right from disruptive to

continuous improvement programs and the first of these
corresponds to business process reengineering programs,
while the latter corresponds to programs like lean, Six Sigma,
and the Theory of Constraints (TOC).

• Lean, which is a proven approach for becoming an excellent

operational system
• Six Sigma, which is a program for attaining world-class quality
improvement
• The TOC, which is an unsurpassed tool for identifying and removing
bottlenecks
Business Process Reengineering

• BPR can be broadly termed as the rethinking and change of

business processes to achieve dramatic improvements in the
measures of performance aspects such as cost, quality, service,
and speed.

• Some of the principals advocated by Hammer are as follows:

• Organize around outputs, not tasks.
• Place the decisions and control, and hence all relevant information, into
the hands of the performer.
• Have those who use the outputs of a process perform the process,
including the creation and processing of the relevant information.
Business Process Reengineering

• BPR in practice has developed a focus on changing

capability/capacity in the short-term to address current issues. This
short-term change in capability/capacity is usually driven by the need
to:
• Reduce the cycle time to process customer orders
• Improve quotation times
• Lower variable overhead costs
• Increase product range to meet an immediate competitor threat
• Rebalance resources to meet current market needs
• Reduce work-in-progress stocks
• Meet changed legislation requirements
• Introduce short-term measures to increase market-share (e.g., increased
credit limit from customers hit by recessionary trends)
Business Process Reengineering

• An overview of a seven-step methodology is as follows:

• Develop the context for undertaking the BPR and in particular
reengineer the enterprise’s business processes. Then, identify the
reason behind redesigning the process to represent the value
perceived by the customer.
• Select the business processes for the reengineering effort.
• Map the selected processes.
• Analyze the process maps to discover opportunities for reengineering.
• Redesign the selected processes for increased performance.
• Implement the reengineered processes.
• Measure the implementation of the reengineered processes.
Business Process Reengineering

• A detailed customer value analysis analyzes the value gaps and

helps in further refining the goals of the process reengineering
exercise. The value gaps are as follows:
• Gaps that result from different value perceptions in different customer
groups
• Gaps between what the company provides and what the customer has
established as the minimum performance level
• Gaps between what the company provides and what the competition
provides
• Gaps between what the organization perceives as the MAV for the
identified customer groups and what the customer says are the
corresponding MAVs
Enterprise Business Process Redesign or Reengineering
Methodology
• The seven steps in a BPR methodology. These steps are as
follows:
• Develop the context for undertaking the BPR and, in particular,
reengineer the enterprise’s business processes. Then, identify the
reason behind redesigning the process to represent the value
perceived by the customer.
• Select the business processes for the design effort.
• Map the selected processes.
• Analyze the process maps to discover opportunities for design.
• Design the selected processes for increased performance.
• Implement the designed processes.
• Measure the implementation of the designed processes.
Enterprise Business Process Redesign or Reengineering
Methodology
Strategic Planning for Enterprise Business Process
Reengineering
• All markets are fluid to some degree, and these dynamic forces and
shifting customer values necessitate changes in a company’s
strategic plans.

• The competitive gap can be defined as the gap between the

customer’s minimum acceptance value (MAV) and the customer
value delivered by the enterprise.

• CVDs are those business imperatives that must happen if the

enterprise wants to close the competitive gap and are similar to the
critical success factors at the enterprise level.
Strategic Planning for Enterprise Business Process
Reengineering
• CVDs are expressed in terms of factors such as
• Time (e.g., lead time, cycle time)

• Flexibility (e.g., customization, options, composition, resource network

interfaces)

• Responsiveness (e.g., lead time, duration, number of hand-offs,

priority, number of queues)

• Quality of work (e.g., rework, rejects, yield)

Strategic Planning for Enterprise Business Process
Reengineering
• Identifying the Business Processes in the Company
• All business process in an enterprise are identified and recorded.

• A process can be defined as a set of resources and activities

necessary and sufficient to convert some form of input into some form
of output.

• A process itself can consist of various substeps. The substeps in a

process may include:
• Value-added steps
• Non-value added steps
• Legal and regulatory steps (which are treated as value-added steps)
Selecting Business Processes for Business Process
Reengineering
• Selecting the right processes for an innovative process
reengineering effort is critical.

• The processes should be selected for their high visibility; relative

ease of accomplishing goals; and, at the same time, their potential
for great impact on the value determinants.

• The MAVs must be charted in detail. MAV is dependent upon several

factors, such as:
• The customer’s prior general and particular experience base with an industry,
product, and/or service
• What the competition is doing in the concerned industry, product, or service
• What effect technological limitations have on setting the upper limit
Selecting Business Processes for Business Process
Reengineering
• CVDs can be defined by obtaining data through the following:
• The customer value survey
• Leaders in noncompeting areas
• The best-in-class performance levels
• Internal customers

• A detailed customer value analysis analyzes the value gaps and

helps in further refining the goals of the process reengineering
exercise.
Creating Process Maps

• A process map documents the flow of one unit of work (the unit may
be one item, one batch, or a particular service that is the smallest
unit possible to follow separately) or what actually happens to the
work going through the process.

• It documents both value-added and non-value-added steps. A

process map could either be sequential or concurrent in nature.

• A process could be mapped in the following two forms:

• Workflow chart form
• Work breakdown structure form
Creating Process Maps

• Process workflows fall into three categories: continuous

workflows, balanced workflows, and synchronized workflows.

• Workflow becomes nonsynchronized because of the following:

• Steps or tasks being produced at different rates—that is, an
imbalanced workflow
• Physical separation of operations causing work to move in batches
• Working in batches, causing intermittent flow
• Long setup or changeover times resulting in batched work along with
associated problems
• Variations in process inputs in terms of quality availability on time
Analyzing Processes for Breakthrough Improvements

• An enterprise’s competitive strength lies in eliminating as many

costly non-value-added steps and wait-times as possible.

• For breakthrough improvements, the process maps are analyzed for

the following:
• Enterprise complexity: Commonly organizational issues are a major deterrent
to efficiency of the processes.
• Number of handoffs, especially those other than those associated with
resource network interfaces.
• Work movement: Workflow charts are utilized to highlight move distances
• Process problems: Several factors may have a severe effect on the continuity,
balance, or synchronicity of the workflow. Examples are loops of non-value-
added steps designed to address rework, errors, scraps, and so on.
Innovative Breakthrough Improvement in Processes

• The steps involved in innovative problem-solving methods are

as follows:
• Define a problem.
• Find alternate solutions.
• Evaluate the solutions.
• Implement the best solution.
• Measure and monitor the success.
Innovative Breakthrough Improvement in Processes

• The responsive process consists of the following components:

• Diagnosing customer need(s)
• Developing customized solutions specific to organizational interfaces
• Dynamically assigning work to the appropriate delivery unit
• Tracking performance as each task is completed

• Business issues fall into three basic categories:

• System problems (e.g., methods, procedures)
• Technical problems (e.g., engineering, operational)
• People problems (e.g., skills, training, hiring)—these problems arise because
of the
• concept of “if you change what a person does, then you change what he or
she is”
Implementing Designed Processes

• This involves the following:

• Reengineered vision and policies
• Reengineered strategies and tactics
• Reengineered systems and procedures
• Reengineered communication environment
• Reengineered organization architecture
• Reengineered training environment
Measuring the Performance of Designed Processes

• Measuring the performance of any process is very important,

because a lack of measurement would make it impossible to
distinguish such a breakthrough effort from an incremental
improvement effort of a total quality management program.

• Measurements are essential because they are:

• Useful as baselines or benchmarks
• A motivation for further breakthrough improvements, which are
important for future competitiveness
Enterprise-Wide Continuous Improvement Programs

• Operating strategy can be expressed in terms of the degree of

responsiveness expected for an customer order. It can be
defined as
• Degree of Responsiveness (DOR) = As an illustration, in the order of
magnitude, the DOR can range from 0.01 to about 5, corresponding to
• Purchase from a retail outlet
• One-of-a-kind product or project

• Lean is a proven approach for becoming an excellent

operational system, Six Sigma is a program for attaining world-
class quality improvement, and the TOC is an unsurpassed tool
for identifying and removing bottlenecks.
Summary

• Process improvement programs range right from disruptive to

continuous improvement programs—the first corresponds to
business process reengineering programs, while the latter
corresponds to programs like lean, Six Sigma, and the TOC.

• BPR is associated with disruptive improvement, while business

process redesign is associated with continuous improvement.
 Main Reference
1. Chapter 15: (EPMS for Business Process
Improvement by Vivek Kale)

This Presentation is mainly dependent on the textbook: Enterprise Process Management Systems by Vivek Kale
Thank You