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Week 9 - Process Redesign (2)

Source / Reference:

http://www.ibm.com/developerworks/ibm/library/i-holo/

http://www.redbooks.ibm.com/redbooks/pdfs/sg246590.pdf

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Response:

Last lecture, process redesign had been introduced - Scoping, Data Collecting, Analyzing, Modeling. And this week, BPR modeling and analysis with BPR software are outlined as the final part of the process redesign before the BPR launched. Five essential aspects with Holosofx Workbench, a tool for BPR modeling and analysis are introduced. And with these 5 aspects, a model of process can be illustrated by the software and help to analyze and modify the process that need to be changed.

In the following time, I would like to give the summary of the 5 aspects and a case study on BPR by using some other tools to model the process. And some other BPR software will be introduced for modeling and analyzing process for BPR.

1.     Summary of the 5 aspects

2.     Business Process Management with HOLOSOFX

3.     Case study on BPR (modeling)

4.     Conclusion

Summary of the 5 aspects

Block #1: Structural Elements of Business Process Flow

The structural elements of business process flow. Different symbols in the diagram are defined. And all the common objects in the diagram are shown in the following table.

Block #2: Organizational Resource Links to Business Process Flow

It is the linking resources to activities. First the user list all activities objects, the linking resources to activities shows the resources that needed from that activities such as how long for the task, the length of time.

Block #3: Rules of Graphical Connection

It is the rules of graphical connection. All the relationships between symbols are restricted by the rule, such as linking the nodes with time line arrow.

Block #4: Methods of Conditional Concatenation of Process Parts

The software allows us to select different decision & choice through different paths to set different cases for stimulation analysis.

Block #5: Process Performance Measurement

After drawing the diagram, the stimulation analysis can be conducted. Through the stimulation, time cost and resource can be derived in each decision, the weighted average can also be found out by assuming the probability for different case.

Business Process Management with HOLOSOFX

What is HOLOSOFX? It was founded in 1990. It launched Workflow BPR Version 1 in 1994. Version 2 of the same software was released in 1996, incorporating workflow integration interfaces for IBM MQSeries Workflow. Version 3 was released in 1998. In 2001 HOLOSOFX introduced BPM Suite 4.1. BPM Suite comprises BPM Workbench, BPM Monitor, and BPM Server. All of these products integrate with MQSeries Workflow.The IBM Holosofx Business Process Management Suite consists of three components that launch as separate modules; they are IBM Holosofx Workbench, IBM Holosofx Monitor and IBM Holosofx Workbench Server. IBM Holosofx Workbench is used for modeling and analysis. IBM Holosofx Monitor is used for monitoring real time processes and IBM Holosofx Workbench Server is used to share process information via internet.

 

The Holosofx suite takes a multi-pronged approach to achieve CBPM:

• Create
  The Holosofx Workbench models existing processes. Use the models to create, simulate, analyze, and select optimal new process designs.
• Collaborate
  The Holosofx Workbench Server is used to share process model information through the Web and to provide a secure repository for access and version control.
• Automate
  The Holosofx Workbench converts business process models to formats that can be exported directly to MQSeries Workflow.
• Manage
  BPM Monitor is used to monitor work-in-process items and perform corrective actions. Additionally, actual process metrics answer what-if questions in modeled scenarios and make process improvements.

Case study on BPR (modeling)

Company background

Elgin Framistat is a family-owned firm that was established in 1915 by G.W. Elgin to supply high-value sports bicycles to the retail industry and directly to consumers. Elgin has remained a niche supplier since then and also supplies parts of its products to other equipment manufacturers (OEMs). The firm has enjoyed long-term business associations based upon four generations of personal relationships between Elgin family members and retail industry leaders.

Process Overview

The order processing consists of one high-level process and three sub processes:

They are High level Sales Order process: Customer order, Obtain credit information and Review credit respectively.

The Sales Order process consists of the process of taking the customer’s order over the phone, and checking for credit being available for that customer. If credit is available, the order is fulfilled by issuing a work order. If credit is not available, then the process of obtaining the credit information is followed, where ratings are obtained from a credit rating agency.

Upon receiving the report with risk 30 Continuous Business Process Management with HOLOSOFX BPM Suite and MQSeries Workflow classifications of high, medium and low, a process of reviewing credit is followed. This has several possible routes. If the risk is low, then the order is processed. If the risk is high, then the order is rejected. When there is a medium level of risk, a manager does some more checking and decides whether to accept the order or reject it.

Finding

The Elgin BPR team interviewed the Elgin executives, managers and employees who are associated with the ordering process. The team visited companies that had automated order-fulfillment processes and talked with vendors, customers, and subject-matter experts about Elgin’s current order-processing system. Here is the team’s summary of its findings:

Management

– Company Culture: Elgin’s executives said that the current ordering system should have been replaced 10 years ago, but the Elgin family felt that an automated system would diminish the “personal touch” that had been the company’s distinguishing feature.

– Turnover Rate: Elgin executives pointed out that the turnover rate in the order-processing function was quite high due to the relatively low pay, lack of advancement opportunities, and low skill requirements. Under these circumstances, establishing a long-term, personal rapport with customers was unlikely.

Customers

– Accuracy: Elgin clerks sometimes called twice in as many days to verify an order’s details. Different clerks called each time to verify the same information.

– Visibility: After a customer placed an order, information about the order was limited to two communications: either the order was refused because of unspecified credit issues, or the order was completed. No one at Elgin could supply information to a customer about an order’s status. Several customers noted that they had to call Elgin’s VP of Manufacturing to find out why a promised delivery date had not been met.

– Timeliness: Customers are required to place orders on Elgin’s schedule. Placing an order after the order-processing function closed for the day or week is not possible. Some customers called Elgin to place an order only to be told that the customers were using an old catalog and the order could not be placed.

Employees

– Frustration: Employees feel that copying information from one form to another is a tedious activity that leads to many mistakes. At times, the order volume is such that individual-order information is transposed with 32 Continuous Business Process Management with HOLOSOFX BPM Suite and MQSeries Workflowother order data resulting in the need to call the customer to verify the order’s details. Order-processing employees are sometimes the targets of the customers’ frustrations with Elgin’s order-process system. Younger, computer-literate employees wonder why modern data-processing techniques are not used in the order-processing function to reduce paperwork, errors, and cycle time.

– Accuracy: Several employees showed how error-prone the order-processing system is. Errors result from similar catalog numbers, part numbers, and product-line names. The system probably worked well before data-processing solutions were available, Elgin’s product offerings were far fewer than today, and the order-processing clerks were technicians who were familiar with the entire product line and its uses.

– Communications: All order-processing employees feel that using paper forms and the inter-office mail cannot meet the demand for reducing cycle time. One employee told of how a group of 18 orders was lost in the inter-office mailing system and reappeared three days later after a frantic search. Even the fax machine has its limitations because a document must be prepared for the fax, and someone must be available on the receiver’s end to verify its receipt.

Goals

The main goal of the process is to allow for efficient and accurate order placements and their subsequent processing in a timely manner, complying with all the business rules in Elgin for activities related to this process

Sales Order process (To-Be)

The redesigned Sales Order process allows for most of the shortcomings of the current (As-Is) process to be removed. The new process essentially remains the same, but allows for electronic order placement and also allows for B2B communication to be possible, thus enabling businesses to place orders on Elgin using their own inventory management systems and data streams being sent to suppliers. The process after that remains the same as the earlier As-Is model, but with all delays due to inter-office mail being reduced, since transport of documents is all electronic.

After reviewing the case study on Elgin Framistat, we know that the “to-be” model is based on the “ as-is” model, and most process after BPR are still remains the same as the earlier “as-is” model. Therefore, a good modeling on existing process is essential for redesign the process.

Conclusion

To sum up, we have 5 essential aspects for Holosofx Workbench to model a business process. From the case study we know that most “to-be” model are based on the “as-is” model, and most of them remains the same as the earlier “as-is” model. Through the 5 essential aspects, a good modeling can be designed with the BPR software.

Week 8 - Redesign Process (1)

Source / Reference:

1.     David Morga, (2004)“PHS Management Training” http://www.training-management.info/PDF/BPR%20Training.pdf

2.     Hammer, M. and Champy J. (1993), Re-engineering the Corporation, Harper Business books

3.     http://ducati.doc.ntu.ac.uk/uksim/journal/Vol-7/No-4-5/Paper1.pdf

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Response:

So far, we’ve learnt many about BPR, from the basic idea to the methodologies that we use to analyze the process that we planned to be redesigned. However, before we implement the BPR, according to the BPR Methodologies from the previous chapter, we have to redesign the process.

In this week, we had mainly focus on the Process Redesign from BPR Methodology – Phase 3. This phase is talking about the scoping the enterprise process, modeling and analyzing it with BPR software. In the following part, I would like to:

1.     Summarize the lecture notes

2.     Investigate the importance of scoping the process

3.     Make a conclusion

Summarize the lecture notes

Before a BPR team redesigns the enterprise process, process scoping is the first step that helps to identify the process that have to be redesigned. It involves several activities that have to undertake before jump into next part – modeling. They are:

1.      Operationalize process performance targets

2.      Define process boundaries

3.      Identify key process issues

4.      Understand best practices & define initial visions

5.      Familiarize participants with BPR software

6.      Outline data collection plan & collect base line data

7.      Plan for modeling phase

Operationalize process performance targets

Clearly defining the goals to redesign the process is vital. To set a goal, BPR team need to concrete process performance targets, making sure for each process that is measurable and tangible. Clear definition can give the BPR team a clear vision for what they target on and avoid the misunderstandings while undergoing the redesign.

Define process boundaries

Process boundaries such as starts, ends, customers, I/O, build an initial common high-level portrait of the process scope i.e. the first picture of the process. It provides the information that which data should be collected in order to model the phase. However, as the business process and environment might change, it is important that the flexibility for the scope to change should be also considered.

Identify key process issues

This activity is to identify the key process issues, which is a starting assessment point for the BPR team. Normally, they will ensure customer input early as most key processes in which the customer is the main factor for judging assessment. They will identify the key issues in different ways such as input from different parties, e.g. customer, external entities or employees. Interview and questionnaire are the other method to identify the key process issue. Categorization will come after elicit process issues had been determined. BPR team will distill the key process issues and present in a summarized form for further study.

Understand best practices & define initial visions

After a series of study on the key process issues, core BPR team should understand known best practices for the selected process. Then they have to define and document the preliminary visions of the new process.

Familiarize participants with BPR software

Since BPR team has to fully model a new process and stimulate it concretely, conceptual familiarization on the selected BPR software is a must. BPR software can help to test and stimulate the process in a visible way.

Outline data collection plan & collect base line data

The methods of data collection are the following:

-          Identify key sources(informants) of data

-          Select (process) categorization criteria

-          Define types of data needed

-          Define data collection methods

-          Start collecting baseline data

Though the methods are known, the difficulties in data collection should be well-aware.

1.      People in the process may not give the BPR effort enough attention because of other priorities or dislike of BPR.

2.      It is the first time that people in the process try to describe the process

Therefore, a good outline data collection plan should be well-constructed before taking the baseline modeling, which is the default case or typical process cases for comparing the performance with the “To-be” model at the later on.

Plan for modeling phase

After preparing all the process scoping reports, the plans for modeling can be started by using BPR software as a tool to support the modeling process.

The importance of scoping the process

“A good project kick-off is important to getting a BPR project 'off on the right foot'. It includes setting expectations, selecting and releasing team members, communicating to the organization, briefing the team and providing the structure to support and manage the project. “ From David Morgan

As David Morgan said, a good start is important to a BPR project. Since the first step – scoping the process meaning that not only define the goal, set the boundaries, data collecting, modeling the process, etc but to provide a better and whole picture of what BPR should be done and the goal should be achieved. That’s consistent with what we’ve talk about on previous chapter – why so many organization are fail to using the BPR. The problem are rooted at the starting point – scoping.

Business Process Reengineering Defined 

'The fundamental rethinking and radical redesign of business processes to achieve

dramatic improvements in critical, contemporary measures of performance such

as cost, quality, service and speed...’ from Hammer & Champ

The definition of BPR is simple but include the meaning that process fundamental rethink and radical redesign. That means before we consider to re-shuffle the process, we have to think about the fundamental idea, the root. And set the boundaries in order to compare the improvement with the “To-be” process. Therefore, scoping an enterprise process before starting BPR is vitally important.

Conclusion

It is suggested that scoping process is important to BPR. However, some activities in which the action might be difficult to be done and thus affect the result of BPR such as data collection plan. People might don’t understand why and don’t know how to describe the process at the first time. 

Week 7 - BPR Methodologies

Source / Reference:

1.     El Sawy(2001), p.10

2.     Furey, Timothy.R., (1993), A Six Step Guide to Process Reengineering., Planning Review 21 (2), 20-23

3.     Harrison, Brian.D., Pratt, Maurice.D., (1993), A methodology for Reengineering Business., Planning Review 21 (2), 6-11.

4.     Manganelli, Raymond.L., Klein, Mark.M., (1994), The Reengineering Handbook: A Step-by-Step Guide to Business Transformation., American Management Association, New York.

5.     Mayer, Richard.J., Dewitte, Paula.S., (1998), Delivering Results: Evolving BPR from art to engineering., 

6.     Underdown, D. R.,(1997), Transform Enterprise Methodology. Unpublished Paper

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Response:

In this lecture, we mainly focus on the BPR Methodology – the 5 phases. As usual, I would try to give a short summary for this week’s lecture. And then, some other BPR methodology will be introduced. Finally, I will take an example to illustrate the implement of the BPR Methodology. So this posting will include:

1.      Summary on lecture notes – BPR Methodology: 5 phases

2.      Other types of BPR Methodology

3.      Example of BPR Methodology

4.      Conclusion

BPR Methodology: 5 phases

Figure1

Phase 1 - Triggering & executive visioning

Figure2The strategy of this phase is to establish vision of how a company should be. As there may be so many problems in the business processes, company has to first recognize the core processes wanted to redesigned, for example, supply chain, order fulfillment and customer service processes.

Figure3There are two frameworks of process prioritization that can help company to identify the core processes that need to redesign. They are found by Harrington (1991) (Figure2) and Kettinger et al. (1997) respectively (Figure 3). Company can prioritize the process with respect to some criteria, like, customer impact, improvement opportunity and critical success factors.

Phase 2 - BPR Project mobilization

In this phase, selection and assessment are involved. In order to implement a successful BPR, top management and a budget should be proposed. First, company should select a project leader who is capable to lead the project. Second, the core BPR team should be formed with certain level of experience, professions. Third, IT people should make a preliminary assessment of IT infrastructure. And lastly, a BPR plan and budget should be proposed.

Phase 3 - Process redesign

The business processes are redesigned in this phase. Before redesigned the processes, AS-IS and TO-BE processes are analyzed and their performances are compared by modeling analysis & redesign. Five steps of business process redesign will be taken when BPR software is used. After the analysis the modeling, the business processes can start to be redesign.

Phase 4 - Implementation & organizational transformation

This phase is all about implementation. IT infrastructure, the organization and people’s skills are adjusted to fit the TO-BE process which is modeled by the previous phase – Process redesign modeling. The focus is on the design of the IS that support the TO-BE process.

Phase 5 - Monitoring & maintaining

In the last phase of the BPR methodology, the new process is already implementing. It is necessary that the new process should be monitored on a continuous basis and even modified if required. The TO-BE process and new IT infrastructure should also be robust.

Other types of BPR Methodology

There are several different Methodologies associated with BPR that are developed by other researchers and we summarize it as follows:

As you have seen in the table, there are five BPR methodologies that different methodology has their activities to follow. At most, there are 7 activities involved in a single methodology. However, it doesn’t imply that the more activities are involved, the more efficient or successful the BPR methodology is. In fact, to adapt which methodology to be implement for the company, variety of factors have to be considered, for example, the nature of company, external environment, technology, etc. To a certain extent, there is no a restricted way or means to develop the methodology for each company. Therefore, in my opinion, company should only take those methodologies as reference to develop their own methodology for BPR.

Example of BPR Methodology

A good BPR methodology can help a company or an organization become fully operational. The U.S. Department of Homeland security is one of the organizations benefit from it.

Formerly, DHS’s facing two challenges:

1.      Ill-structured problems on 9 components.

2.      Retardation on the BPR project

Then, the DHS followed an industry best practice five-step approach designed to facilitate a process improvement. The five steps were:

1.      Strategic planning

2.      Map and benchmark

3.      Develop solutions

4.      Implement improvements

5.      Review and assess

Moreover, it is recommended that the methodology is taken with rapid deployment of task management, good communication and work-intake process to enhance the efficiency improvement project, which is what we haven’t mentioned before.

With the reengineering efforts, DHS has succeeded to achieve the following results:

1.  EADO’s capacity to operate under best practices that are aligned with the organization’s structure and goals
2. Improved efficiency from increased productivity and budget savings thanks to a staff clearly focused on mission
3. Increased operational tempo within DHS

For more details, you can visit: http://www.1-sc.com/case_dhs_bpr.html

Conclusion

After analysis different types of BPR methodology and the case study of DHS, we can conclude that there is no such one single methodology can apply for all companies. And even the methodology has been identified, during the implementation of BPR, a good management and control are necessarily required for successful BPR.

Comment on Chan Hoi Ki’s week 7 lecture review

Good piece of work with different examples and reference. She first introduces the 5 phase of BPR Methodology and then compared it with other methodologies. And she also provides the case study of Eastman Kodak Company. This gives us an insight to understand the BPR methodology which is not only a set of rule but flexible that it can be changed for different situations. And I also share the same opinion on her recommendation – “companies should follow the systematic BPR methodology in establishing the BPR project.” And a good management is also required for establishing the BPR project successfully.

Week 6 – Basics of BPR (2)

Source / Reference:

1.     Chung For Choi, Stephen L. Chan, (1997) "Business process re-engineering: evocation,

elucidation and exploration", Business Process Management Journal, Vol. 3 Iss: 1, pp.39 – 63

2.     Business Process Regineering

http://www.brighthub.com/office/project-management/articles/122495.aspx

3.     R. D. Reid, M. R. Sanders (2005), "Operations Management: An Integrated Approach"

http://www.wiley.com/college/sc/reid/chap5.pdf

4.     Sims, Serbrenia J. & Sims, Ronald R. (no date). Total Quality Management in Higher Education. Retrieved February 10, 2009 from http://books.google.com/books?id=I5tBi3EJNfYC&printsec=frontcover&source=gbs_summary_r&cad=0#PPA2,M1

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Response:

This chapter we further study the concept about BPR. This time, I would like to give a short summary first and then go in depth on some topics. At the end, I will sum up the properties of TQM and BPR by comparing each other. So today, this post will include:

1.    Summary on lecture notes:

-          The Leavitt Diamond

-          Total Quality Management(TQM)

2.    Comparison on TQM v BPR

3.    Conclusion

This week, we’ve learnt how to balancing IT-enabled organization transformation by using a conceptual framework – The Leavitt Diamond.

The Leavitt Diamond

                                                                          Figure 1

1.    Information Technology use

2.    Business processes

3.    Requisite people skills

4.    Organizational form

On a whole, four components, listed above, are inter-dependent when implement change. When a component changes, adjustment will consequently be made for the rest.

Take People as an example, when we use this approach, we don’t just look at employees’ position, but also their skills, efficiency knowledge and productivity. The change in people might affect the other three components:

·         Change in Tasks: Changes in how things are done. If you’re planning to change the tasks, you will have to educate and train the employees to make them familiar with the new methods.

·         Change in Structure: Change in structure would imply changing job roles. Here again the employees would need help to learn about their new job duties and responsibilities.

·         Change in Technology: Shifting to a new technology requires extensive training, so that the employees can handle the new technology efficiently – without causing any damage to themselves or the technology. This may even involve hiring new skilled employees to handle the new technology.

Total Quality Management

The second concept we’ve learnt is TQM. This is a management approach for an organization that focuses on customer satisfaction in terms of continual improvement of the quality of its products and services.

TQM is composed of three paradigms:

Paradigms	Description
Total	Involving the entire organization, supply chain, product life cycle
Quality	With all-rounded quality, service quality, resource quality
Management	System managing steps like: plan, organize, control, lead, staff

TQM stresses that quality is an organization effort. And the Walt Disney Company is a great example for TQM.

The Walt Disney Company focuses on customer satisfaction. This is accomplished through meticulous attention to every detail, with particular focus on the role of employees in service delivery. Employees are viewed as the most important organizational resource and great care is taken in employee hiring and training. All employees are called “cast members,” regardless of whether they are janitors or performers. Employees are extensively trained in customer service, communication, and quality awareness. Continual monitoring of quality is considered important, and employees meet regularly in teams to evaluate their effectiveness. All employees are shown how the quality of their individual jobs contributes to the success of the park.

Another example is Kroger Company which is a good example for TQM in quality control.

Kroger Company record and monitor the quality of incoming produce, such as tomatoes and lettuce by using quality control tools. Quality tools can be used to evaluate the acceptability of product quality and to monitor product quality from individual suppliers. They can also be used to evaluate causes of quality problems, such as long transit time or poor refrigeration.

TQM v BPR

Figure 2

From the figure 2, the differences between TQM and BPR are shown. As you can see, the main differences for them are threefold:

1.    Focus

2.    Objective

3.    Benefit gained

Figure 2

Figure 3

In fact, they are two management approaches that business implements them in different situations where they focus on different objectives. Look at the life cycle from Distant communication (Figure 3). TQM and BPR are inter-exchanging alternatingly.

In conclusion, BPR and TQM are both important for business. Although they aim at different objective and focus, as you see in life cycle, TQM and BPR are alternating, which highlights the importance of both approaches in life cycle. However, to implement these two approaches, we cannot guarantee that business can be success or not as the tactics and methodology for them might affect the result which will be discuss in next post.

Week 5 – Basics of BPR(1)

Source / Reference:

1.     H. Davenport, L. Prusak, H. James, "Reengineering revisited" (2003)

2.     V. Grover, K. Malhotra, "Business process reginnering: A tutorial on the concept, evoluation, method, technology and application" (1997)

3.    Nolan, Norton & Co, BPR Criticality Framework

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Response:

This lecture we have learnt the concept of BPR which I will give a brief summary for it. And then I will go on to talk about the reading and raise a reflecting question - when should do a reengineering for a business firm.

At the end, I try to find out the solution by providing some reference to explain the detail for it.

There are 3 basic concepts we have learnt in week5. I would like to illustrate them in a table.

Short summary of week 5 lecture

Business	Outside – in perspective: Run business through the eyes of the customer
Process	Delivering outcome to customer (Typically, they’re cross functional)
Reengineering	Aim for quantum improvements, maximizing the value adding

Lessons learned from reengineering

From the paper I read, Reengineering is a buzzword in 1990s. Being touted the success case of reengineering, like Ford and Mutual Benefit Life, many firms followed suit and that caused a “wagon effect” at that time. However, most of them are not success, according to the article, about 70% failed.

This makes me dwelling on when should do a reengineering for a business firm, what’s criteria should consider before we try to do a reengineering.

It is risky if we haven’t consider in all-rounded factors before we launch the reengineering project, as it is talking about millions dollar investment. In fact, many researches had been done to determine whether a business should do a reengineering.

Figure1

BRP is always a trade-off between the change and the cost. Firms have to fully understand that it is not guaranteed that the business will be success after reengineering, and even the change caused by reengineering, the company may bear the risk of it. Therefore, we should try to understand the situation where the firm should do the redesign job. In figure 1, the framework can be applied to analyze the firms’ situation to decide whether it should start BPR.

As you can see in the figure1,

Horizontal – how well the firm ready for the BPR project.

Vertical – how important for the firm to implement BPR project.

Quadrant	Strategy	Implication
1	Survival	Essential to improve the business performance by launching BPR in order to survival
2	Launch	Moderate risk of BPR, suitable to improve business performance by BPR
3	Reconsider	Business performance is stable, BPR is not necessary
4	Advantages	No urgency for BPR, but implementing BPR would gain advantages.

Figure 2: Four Quadrant explanation

Zone	Quadrants	Implication
Critical	1,2	Urgent for BPR
Managed	3,4	Less urgency for BPR
Risk	1,3	Should get focus on preparation and managing risk
Strike	2,4	Strategic advantages gained if BPR launched

Figure 3: For Zone explanation

By using BPR Criticality Framework, the necessity of BPR for a firm can be analyzed.

In conclusion, like any projects, BPR has its advantages and disadvantages. Firms should have to consider all the benefits and risks before launching BPR. As it involves huge amounts of money for investment and many other factors have been involved, it leads the complexity and many hidden risks to launch the BPR. That’s why so many firms had been fail in BPR. Using the BPR Criticality Framework can make it easy to understand the situation that the firms should implement BPR or not.