Week 7 - BPR Methodologies

References:

Hammer, M., Champy, J., 1993. Reengineering the Corporation: A Manifesto for Business Revolution. Nicholas Brealey, London.

Ovdienko (2005), Process Improvement Through Benefits Management (PITBM)- Price Waterhouse Coopers. Available from: http://www.pwc.com/en_UA/ua/assets/pwc_pitdm_eng.pdf [Accessed: March 2, 2012].

Week 7 – BPR Methodologies

Introduction

In week 7’s lecture, we have studied the BPR methodology. There are 5 main phases of the BPR methodology introduced in the lecture. In each phase, there are specific objectives to achieve before the BPR project goes to the next stage. In fact, there are many different kinds of BPR methodology as every reengineering project needs its own different attitude, because every company has different business processes and organizational structure. Therefore every company requires a unique BPR methodology in order to have dramatic improvement.  

In this lecture review, I will introduce two BPR methodologies, one by Hammer & Champy(1993) and one by Price Waterhouse Coopers (PwC). The former one uses the classic BPR view while the latter one uses the modern BPR view, i.e. by improving the existing BPR methodologies to achieve better business benefits through BPR implementation. 

1.      Hammer & Champy

Hammer and Champy methodology was developed in 1993. This methodology breaks into six steps:

1.1.Introduction into Business Reengineering

The first step is the initiation of BPR project by company top management. The top management is supposed to communicate with the employees about the current situation and the need for reengineering. During this stage, there is a vision formulated. Hence, there is limitation that this step does not include learning process prior to vision creation.

1.2.Identification of Business Processes

The second step is identification of all business processes of the company. These processes are studied in the interaction point of view, how they interact with other processes within the company or outside the company and how do they interact with external factors as customers requirements. Examples of output of this stage include list of processes in form of graph, tables, etc.

1.3.Selection of Business Processes

Based on the collected data in stage 2, the critical processes (processes that affect customer the most) are identified. Another group of processes (the processes that are the easiest for reengineering) is selected –– that means troubles are less likely to occur while reengineering those processes.

1.4.Understanding Selected Business Processes

Aim of step 4 is to understand the basics of the processes. After understanding of the business process, there is benchmarking taking place. This benchmark should find the difference between the current state of the processes to the state of the processes after the reengineering. In this step process is viewed as a whole, but not functionality-based.

1.5.Redesign of the Selected Business Processes

This phase is the key step of the Hammer & Champy’s methodology. This step should redesign the process both technically and socially (the work environment). Output of this stage could be development plan of the company.

1.6.Implementation of Redesigned Business Processes

During this step, organization launches the implementation of the reengineered processes. This methodology deals with the implementation stage only at the project management level.

2.      Price Waterhouse Coopers (PwC)

Price Waterhouse Coopers is one of the leading consultancy companies in the world. It has its own methodology for business process reengineering. The name of its BPR methodology is Process Improvement Through Benefits Management (PITBM). This methodology is not information system oriented. The main benefits of PITBM are to achieve largest benefits for the organization by applying only the changes. 

Unlike Hammer & Champy’s methodology, this methodology breaks into five stages:

2.1.Assess

During first stage, the scope of the project is finalized. The core BPR team is also created. All the business processes, performance measures and facilities are assessed. There could also be optional benchmarking part for this stage. The most important aim of this stage is to prepare whole project management benefits – to ensure management involvement. 

2.2.Design

The design stage serves to design all the TO-BE business processes and organizational changes as well as required technology and facilities. The BPR team will explore the implementation alternatives and select the most optimum one for the company. 

2.3.Construct

During this stage, the technology, which is going to be implemented is selected and installed. The job description, performance measures and targets are prepared. Documentation for the whole project is created in this step, this documentation have to be prepared according to the standard established in this stage. The last step of this stage is the implementation of information systems, processes and changes to organization structure.

2.4.Implement/Operate

During this stage, benefits realization activities are launched and monitored. After the successful launch of selected activities, the continuous improvement program is also launched.

2.5.Change Management

This stage is marked as the fifth step, however it is taking place all over the reengineering project. This is very important in order to fulfill the need to communicate change to all the employees. This is also to resist the rapid change in business environments.

Further Analysis on the two methodologies

The worst imperfection within Hammer & Champy‘s methodology is lack of the involvement workforce into the project. Just top management starts projects. The PwC methodlogy is able to achieve this as it starts to choose the core BPR team at the first stage of BPR implementation. Another flaw of the Hammer & Champy‘s methodology is that it does not include performance measurement step after reengineering. Therefore, there is a lack of BPR project evaluation. Nevertheless, the PwC methodology will launch and monitor the benefits realization activities to evaluate the effectiveness of the BPR implementation. It will also implement the continuous improvement program for further improvement

Conclusion

The above-mentioned two methodologies are just some well-known BPR methodologies. To have a successful BPR project, the company should use a tailor-made BPR methodology in order to meet its unique business objectives

Comment on Li Dick's week 7 lecture review

His lecture review focuses on the redesign phase of the BPR methodology. He has clearly explained the 5 main stages of the BPR methodology. He states clearly the 4 main factors of evaluation of a business process, namely, efficiency, accuracy, extendibility and the determination of whether the workload of process can be accomodated. I think he can compare his methodology with other successful methodology to have broader insight of BPR methodology. Overall, he has done a great job in his lecture review.

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