Calhoun: The NPS Institutional Archive Theses and Dissertations
Thesis and Dissertation Collection
1997-12
Business process reengineering: a primer for the Marine Corps' process owner Brewster, Rollin D. Monterey, California. Naval Postgraduate School http://hdl.handle.net/10945/8042
N PS ARCHIVE 1997.12
BREWSTER,
R.
1
NAVAL POSTGRADUATE SCHOOL Monterey, California
THESIS BUSINESS PROCESS REENGINEERING: A PRIMER FOR THE MARINE CORPS'
PROCESS
OWNER
by Rollin D. Brewster III
December, 1997
Kenneth J. Euske William J. Haga
Principal Advisor:
Associate Advisor:
Thesis B8057 Approved for public
release; distribution
is
unlimited.
DUDLEY KNOX LIBRARY
NAVAL
POSTGRADUATE^™™, °°L 939?3-510^
MONTEREY CA
REPORT DOCUMENTATION PAGE
Form Approved
OMBNo. 0704-0188
Public reporting burden for this collection of information is estimated to average 1 hour per response, including the time for reviewing instruction, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to Washington
headquarters Services, Directorate the Office of 1.
4.
AGENCY USE ONLY TITLE
for Information
Operations and Reports,
Management and Budget, Paperwork Reduction
1
21 5 Jefferson Davis Highway, Suite 1204, Arlington,
Project (0704-0188)
Washington
2. REPORT DATE December 1997
(Leave blank)
3.
DC
VA
22202-4302, and
to
20503.
REPORT TYPE AND DATES COVERED
Master's Thesis
AND SUBTITLE
5.
FUNDING NUMBERS
8.
PERFORMING ORGANIZATION REPORT
BUSINESS PROCESS REENGINEERING: A PRIMER FOR THE MARINE CORPS' PROCESS OWNER AUTHOR(S)
6.
Brewster 7.
III,
Rollin D.
PERFORMING ORGANIZATION NAME(S) AND ADDRESS(ES)
NUMBER
Naval Postgraduate School Monterev. CA 93943-5000 9.
SPONSORING MONITORING AGENCY NAME(S) AND ADDRESS(ES)
10.
/
SPONSORING MONITORING /
AGENCY REPORT NUMBER 11.
SUPPLEMENTARY NOTES
The views expressed
in this thesis are those of the author
and do not
reflect the official policy or position
of the Department of
Defense or the U.S. Government. 12a.
DISTRIBUTION / AVAILABILITY STATEMENT
Approved 13.
12b.
DISTRIBUTION
CODE
for public release; distribution is unlimited.
ABSTRACT As
the defense establishment downsizes,
order
has turned to the private sector to model
Business Process Reengineering (BPR)
improved productivity. achieve
it
of magnitude improvements
technology to enable the
holistic redesign
in
is
organizational
its
methods
for
a technique used by the private sector to
performance by leveraging information
of business processes. This thesis provides a guide to the methods
and tools used during BPR, and presents a practical way for Marine Corps' leaders to establish and direct a reengineering effort.
Instruction
the reengineering team,
is
provided on the basics of
how
to establish a strategic direction, organize
and analyze business processes through the use of process-maps, flowcharts,
(IDEF0) models, Activity-Based Costing (ABC), and value-added assessment. Approaches and principles useful during the development of the new process are discussed, as well as benchmarking and the factors leading to process implementation and organizational change. Integrated
Definition
Recommendations 14.
are
for Function
made
for further reading.
SUBJECT TERMS
15.
NUMBER OF PAGES
Business Process Reengineering, BPR, Process Innovation, Process Improvement, Process
Maps, Flowcharting, Integrated Definition Costing, ABC, Organizational Change
17.
SECURITY
CLASSIFICATION OF REPORT Unclassified 280-5500
for Function Modeling,
18. SECURITY CLASSIFICATION OF THIS PAGE
Unclassified
IDEF0, Activity Based
SECURITY CLASSIFICATION OF ABSTRACT
137 16.
PRICE CODE
20.
LIMITATION OF ABSTRACT
19.
UL
Unclassified
Standard Form 298 (Rev. 2-89) Prescribed by ANSI Std. 239-18
11
Approved
for public release; distribution
is
unlimited
BUSINESS PROCESS REENGINEERING: A PRIMER FOR THE MARINE CORPS' PROCESS Rollin
D
Brewster
OWNER
III
Captain, United States Marine Corps
B.A., University of Michigan, 1992
M.S.M., Troy State University, 1996
Submitted
in partial fulfillment
of the
requirements for the degree of
MASTER OF SCIENCE IN MANAGEMENT from the
NAVAL POSTGRADUATE SCHOOL December 1997
ftps
AwW*
DUDLEY KNOX LIBRARY NAVAL POSTGRADUATE SCHOOL MONTEREY CA 93943-5101
ABSTRACT As to
model
(BPR)
is
the defense establishment downsizes,
its
it
methods for improved productivity.
has turned to the private sector
Business Process Reengineering
a technique used by the private sector to achieve order of magnitude
improvements
in organizational
performance by leveraging information technology
to enable the holistic redesign of business processes. This thesis provides a guide to
the methods and tools used during
BPR, and
presents a practical
Corps' leaders to establish and direct a reengineering
on the basics of how to
effort.
way
Instruction
for is
Marine
provided
establish a strategic direction, organize the reengineering
team, and analyze business processes through the use of process-maps, flowcharts, Integrated Definition for Function (IDEFO) models, Activity-Based Costing (ABC),
and value-added
assessment.
Approaches and principles useful during the
development of the new process are discussed, as well as benchmarking and the factors
leading
to
process
Recommendations are made
implementation
for further reading.
and
organizational
change.
VI
TABLE OF CONTENTS I.
INTRODUCTION
H.
1
A.
BACKGROUND
1
B.
SCOPE OF THESIS
2
BACKGROUND OF PROCESS IMPROVEMENT TECHNIQUES BACKGROUND B WHAT IS A PROCESS? A.
5 5
6
C THREE STRATEGIES TO PROCESS IMPROVEMENT 1.
Continuous Process Improvement
2.
Business Process Redesign
3.
Business Process Reengineering
8
9 9 10
D.
WHAT BPR IS NOT
13
E
HOW IS REENGINEERING DIFFERENT FOR GOVERMENT/DOD?
15
INFORMATION TECHNOLOGY AND BPR 1. Information Technology as an Enabler of BPR 2. BPR and the Role of the Information Systems Staff. G TAILORING YOUR APPROACH TO PROCESS IMPROVEMENT H. HOW THIS DOCUMENT WILL APPROACH PROCESS IMPROVEMENT I RECOMMENDED READINGS F.
m. ORGANIZING FOR BPR A. CONSULTANTS /.
2.
1.
2. 3.
C.
I:
Customer and Stakeholder Analysis Clarifying Mission Vision of Success
Goals, Objectives
6.
Strategies.
21
24 24 24 25 27
DIRECTION SETTING
4.
19
24
Identifying Organizational Mandates
5.
19
23
What Can Consultants Do? The Head b. The Heart c. The Hands The Pro's and Con's of Consultants
PHASE
17 18
23
a.
B.
16
29 29 30 31
and Performance
Criteria
PHASE II: DEVELOP THE REENGINEERING PLAN The Roles in BPR
1.
Team
32
35 36 36 37
a.
Executive Improvement
b.
Reengineering Leader
38
c.
Reengineering Czar
d.
The Process Owner The Process Improvement Team
39 40
e.
(EIT)
41
vn
2.
Finding the Processes
to
Fix
Major Business Processes Improvement
a.
Identify the
b.
Selection of Processes for
45
c.
Identify Process Boundaries
45
d.
Symptoms and Diseases of Broken Processes
46 47
D RECOMMENDED READINGS
PHASE III - UNDERSTANDING THE OLD PROCESS A. WHY ANALYZE THE OLD PROCESS B TOOLS FOR ANALYZING THE OLD PROCESS
IV.
50
Process Maps
50
Flowcharts
51
3.
Integration Definition for Function
4.
Modeling (IDEFO)
WhylDEFO?
58
Constructing an
ABC
55 55
IDEFO Diagram c. Software Support for IDEFO Activity Based Costing a. What is ABC? b. How Does ABC work? c. How is ABC Done? d.
62 63
64 67
69 73
and the Activity Accountant
5.
Time Based Measurement
74
6.
Value-added Assessment
75
RECOMMENDED READINGS
77
PHASE IV: DESIGN THE NEW PROCESS
A REENGINEERING PRINCIPLES J.
Organize Around Outcomes, Not Functions
2.
Workers Make Decisions
3.
Substitute Parallel for Sequential Processes
4.
Processes Have Multiple Versions
5.
Work
is
Performed Where
it
Makes
the
Most Sense
6.
A Case Manager Provides a Single Point of Contact
7.
Reconciliation
is
Minimized.
Hybrid Centralized/Decentralized Operations are Prevalent 9. Bring ''Downstream" Information "Upstream" 10. Scrutinize Every Piece of Paper in the System 11. Communication Flow is Horizontal.
BRAINSTORMING C STREAMLINING AND SIMPLIFICATION
B.
BENCHMARKING 1.
Why Benchmark?
2.
How to Benchmark?
79 79
8.
D.
49
1.
b.
V.
49
2.
a.
C
44 44
80 80 80 81 81 82 82 83 83
84 84 84 86 88
88 89
Vlll
RECOMMENDED READINGS PHASE V: IMPLEMENTATION & CHANGE MANAGEMENT
E.
VI.
A. B.
THE BUSINESS CASE IMPLEMENTATION
98
1.
Clarifying Plans
Integrating New Practices
3.
Providing Education
4.
Fostering Ownership
5.
Giving and Getting Feedback
C ENVIRONMENTAL ENABLERS Leadership
2.
Overcoming Resistance
95 95
2.
1.
92
to
100 100 101 102 102
AND INHIBITERS
103
104 104
Change
GAO KEY ASSESSMENT QUESTIONS E RECOMMENDED READINGS VH. CONCLUSION D.
106
107
109
A.
DISCUSSION
109
B.
AREAS FOR FURTHER RESEARCH
Ill
APPENDIX - PROCESS IMPROVEMENT METHODS
113
LIST OF REFERENCES
119
INITIAL DISTRIBUTION LIST
125
IX
INTRODUCTION
I.
A.
BACKGROUND Over the past decade, the American commercial sector has reorganized, and adopted revolutionary new business and management practices in
restructured,
order to assure
its
competitive edge in the rapidly changing global marketplace.
Now
and adapt the lessons of the private sector so our armed forces can maintain their competitive edge in the rapidly changing global security market ~ Secretary of Defense William Cohen, 14 May 1997. the (Defense) Department must adopt
Throughout the past two decades the private sector has experienced external environment place.
change
in its
due to increasing competition and the globalization of the market
In response to the changing environment, private sector organizations have adapted
and structures
their processes
Department
is
legislation like
(CFO)
a
in
order to remain competitive.
also experiencing external
mandates
for
change
Likewise, the Defense
in the
form of programs and
Corporate Information Management (CIM), the Chief Financial Officer's
Act, the National Performance Review, the
Act (GPRA), and the Clinger-Cohen Act.
Government Performance and Results
The Quadrennial Defense Review (QDR)
Department of Defense (DOD)
reiterated the fact that the
is
downsizing
in
response to a
reduced Cold-War threat and increasing pressures on discretionary federal spending. Since 1985 America has reduced
33 percent, and 1997).
model
As its
its
its
defense budget by 38 percent,
its
force structure by
procurement programs by 63 percent (Quadrennial Defense Review,
the defense establishment downsizes
it
has turned to the private sector to
methods for improved productivity.
We
must fundamentally reengineer our infrastructure and streamline our support
structures by taking advantage of the Revolution in Business Affairs that has occurred in
the commercial world.
such efforts can
we
We
must focus on the future and not the
past.
Only through
realize the cost efficiencies necessary to recapitalize the force.
(Quadrennial Defense Review, 1997)
Business Process Reengineering (BPR)
Defense Department to mitigate the
effects
is
of smaller budgets.
Cohen
force has been formed by Secretary of Defense
make recommendations
A
defense reform task-
to improve the organization and
This group of military and civilian executives
procedures in the Department. to
one of the strategies being used by the
to the Secretary to streamline
DOD's
is
expected
organizational structures
and business practices (Department of Defense Press Release, 239-97).
BPR
Within the Marine Corps,
used by Headquarters Marine Corps the
and process improvement techniques are being
(HQMC)
to streamline their business processes with
hopes of increased capacity, greater service to customers,
decision making.
financial savings
and better
team of Active Duty and Reserve Marines and Marine
In April 1995 a
Corps' civilians was formed for the express purpose of documenting and improving the
Marine Corps' business processes within the beltway. Their
activity
became known
Marine Corps Continuous Process Improvement Program (MCCPIP). identified the
key processes
that directly deliver the
at
work
the
DOD
and
within the "Business Enterprise" of the Marine Corps
make Marines and win
HQMC
battles. (Neal,
with higher headquarters.
These smaller organizations
agencies and consequently their processes are by
their
HQMC.
processes
will
However, the need surface
1997)
continue their change efforts, the Operating Forces and
work
the Supporting Establishment will need to adapt their processes to
employed by
This group has
end products and services that the operating forces need to
maintain readiness and ultimately
As
as the
as
the
interact
some measures
in
congruence
with fewer external
less
complex than those
for these organizations to evaluate and
Department
and
other
smaller
improve
intra-service
organizations continue their quest for greater efficiency.
B.
SCOPE OF THESIS This thesis
reengineering.
is
The
a
management guide
objective of the thesis
to the is
methods and tools required for successful
to provide the
Marine Corps' process owners
with a process improvement method and tools that have demonstrated their usefulness
within the public sector and strategies and
DOD.
Research included an examination of the different
methods behind BPR, and the environmental enablers
successful reengineering.
a successful
BPR
within the
DOD
This document seeks
effort; 2) describe
to: 1) outline
some of the most
that together lead to
the steps necessary to ensure
pertinent tools that are being used
and the private sector, 3) identify the characteristics of a work
environment that supports and enables reengineering; and 4) provide references for further reading
in
each area. If the
costly consulting fees. requisite
BPR
effort
If the process
knowledge to
talk
limited then
is
is
it
may be done without
the need for
complex, then readers of the thesis will have the
intelligently
with consultants and recognize appropriate
actions. It is
my
intent that this thesis will
the organization (within departments at
establishment) as a primer for
BPR
be used by military leaders
HQMC,
at the
middle levels of
the operating forces, and the supporting
and a source book for additional readings.
written with the intent to fully educate the reader on
all
how to
not
of the aspects of BPR, but as a
introduction to the methods and tools used during reengineering so the reader
an informed decision on
It is
may make
proceed. At the end of each chapter recommendations for
further reading are presented to
direct the reader to
interesting and relevant for reengineering.
information the author found
BACKGROUND OF PROCESS IMPROVEMENT TECHNIQUES
II.
BACKGROUND
A.
Michael Hammer,
who
reasons that the industrial age result,
many of
popularized the term "business process reengineering,"
is
new
over and that a
postindustrial era
on the
is
rise.
As a
the hallmarks of the industrial age are no longer relevant to today's
business environment
(Hammer and Champy,
Wealth of Nations"
1776 he
in
1993).
classified the industrial
and economies of scale (Smith, 1956). blocks for industrial era corporations.
When Adam
Smith wrote "The
paradigm as the division of labor
was used
This set of assumptions
as building
These corporations broke down processes into
highly simplified tasks that could be performed efficiently by poorly educated workers.
Adam
Smith and Henry Ford discovered, workers that specialized
simple task could perform that task very
efficiently.
parable of the pin makers Smith demonstrated
how
in
As
performing one
(Hammer and Champy, 1993)
In the
dividing the process of making straight
pins into specialized tasks for the workers could increase productivity.
By
dividing the
process into 18 tasks, he found that 10 employees could increase their productivity from less than
by
100 pins a day to 48,000. These separate tasks were coordinated and integrated
layers of
These layers of management were the formation of the
management.
bureaucracy. (Smith, 1956)
Just as the production process
management of organizations was
(Hammer and Champy, Ironically,
simplified
and
was
separated
separated, likewise the into
1993).
according to
Hammer
and
Champy
(1993), the same set of management
principles that enabled the industrial revolution and success during
now
hinder
organizations
from competing
in
this
reengineering as the vehicle of change to incorporate organizations.
manageable tasks
World Wars
post-industrial
age.
new ways of doing
I
and
II,
They see business into
If the industrial era
private
global
sector,
competition
effectiveness and efficiency.
authority
is
no longer
places
plentiful.
more
The pressure of public
and abuse
in the private sector
in the
Clinger-Cohen Act,
and ask
why
scrutiny in the
seen by
10.1.15,
B.
govern
businesses
for
required because funding
American people see can not be used
form of nightly reports on waste,
many
and we
Secretary of Defense William Cohen, 14
to be one
in
the form of the
QDR,
the
method
to
make
this
will
May
do
that.
1997.
change happen
(GAO/AMID-
Department of Defense Press Release No. 238-97).
WHAT IS A PROCESS? Before continuing,
entirety
In the
GPRA and CIM initiatives now require change.
-
is
on
their tax dollars
news, and Congressional mandates
We have to have a revolution in our business practices,
BPR
is
Also, Congress, the media, and the
work
fraud,
demands
additional
In the public sector, change
the efficiencies at efficiently?
why change now?
paradigm worked for over 200 years
of the
how
BPR
effort.
it is
important to define what a process
A business
process
is
is in
order to grasp the
the series of steps and procedures that
resources are used with the intent to create products and services that meet
the needs of particular customers or markets
(GAO/ATMD-10.1.15).
This
is
shown
pictorially in Figure 2-1
Transformation
Input of
By
Output of
Information
Men
Energy
and/or
and/or
Materials
Machines
Services
Figure 2- 1
From
.
Product
A process or system.
Johnson, Kast, and Rosenweig, 1963.
The main processes may be divided
into sub-processes or tasks,
from one sub-process becomes the input for another.
where the output
Together these processes and sub-
processes form a chain that ideally creates value for the customer.
Similar definitions of
processes include the following:
a group of logically related tasks that use the resources of the organization to provide
defined results in support of the organization's objectives. (Harrington, 1991, pp. 9)
Most processes are
cross-
between the boxes on the organizational
chart.
a series of steps designed to produce a product or service. functional, spanning the 'white space'
(Rummler, 1995, pp. 45) a collection of related, structured activities
- a chain of events - that produces
service or product for a particular customer or customers
and
vertical structural designs.
activities
which can
.
.
.
For most mangers, accustomed
virtually stand alone, this is a
much
a specific
regardless of the hierarchy to functional units
and
different view. (Caudle, 1995,
pp. 7-9)
In
processes are what the organization
short,
Developing products,
does.
procuring materials, compensating employees, and financial planning are
Who
processes.
works
organization through
A
its
in
the process
a function
is
processes, rather than
process orientation
is
its
structure,
of structure. is
way of looking
an alternative
all
examples of
Examining an
a process orientation. at
an organization.
That
is,
looking at the organization horizontally as a collection of processes rather than vertically as
a
collection
vertical/functional
organization. activity
of
Figure
functions.
2-2
shows
the
relationship
between
a
view of an organization and the horizontal/process view of an
Business processes are generally cross-functional; the hand-offs from one
or function to the next are points
where the
greatest
performance improvement (Hammer 1995, Rummler 1995). to achieve performance gains in the organization
bringing the pieces back together function in Figure 2-2 improve (cycle time, cost)
may
how
lie
for
Process improvement seeks
by looking
(Hammer, 1995).
opportunities
at the entire
If the individuals
process and
who
perform a
they perform a piece of the process, modest gains
result in the entire process.
Horizontal
work flow versus
vertical organization
Organization 1
Function #1
Function #2
Function #4
Function #3
1
1
Activity #1
Activity #2
Activity #3
Activity #4
Work Flow
Figure 2-2. Contrasting the process orientation
vs. a functional orientation.
Adapted from Rummler, 1995.
However,
order-of-magnitude
gains
are
possible
if
functions
all
improve
their
performance, smooth the interfaces between functions, and arrange the entire process in a logical streamlined path.
(Rummler 1995, Hammer 1993)
fundamental element of BPR.
Whether one
is
The focus on process
is
a
interested in improving the process of
acquisition or providing combat-ready forces, the entire process
must be examined to
attempt to optimize the system.
C.
THREE STRATEGIES TO PROCESS IMPROVEMENT There are many ways to attack any problem and process improvement
different.
Some
and
Champy
(1993),
in efficiency
and effectiveness.
in efficiency
and effectiveness.
Three strategies for process improvement have surfaced
These
Others, like
exhort that radical changes are necessary to achieve
breakthrough order-of-magnitude increases
for this thesis.
no
authors, like Harrington (1991), proclaim the need for continuously
improving current processes to achieve gains
Hammer
is
strategies differ in their
in the
research conducted
approach and the rate of change prescribed
for
improvement.
process
This
describes
section
the three
for
strategies
process
improvement: Continuous Process Improvement (CPI), Business Process Redesign, and Business Process Reengineering.
Continuous Process Improvement
1.
CPI grew out of the Total Quality Management (TQM) movement. uncover and
empowered
fix
to
problems occurring
make
task-level
in the
improvements
usually done within a particular function but
continuous,
it
current process.
becomes a philosophy and
a
seeks to
Self-managed teams are
in quality, cycle-time,
may
It
and
cost.
involve cross-functional teams.
way of
life,
CPI
is
CPI
is
finding problems, identifying the
causes, and incrementally modifying the process to fix the problems.
A
number of
well-
defined techniques and tools are available for use by practitioners that require a moderate
amount of
training (e.g., control charts, Pareto diagrams, flow charts, cause and effect
diagrams,
histograms).
improvements
Performance gains
in cost, time, or
customer
satisfaction.
organizational change and level of effort required
money
is
incremental,
are
is
usually
5-10
percent
Costs are low because the level of
low.
Risks are avoided because
invested in the change effort and the scope of the change
is
little
incremental. (Davis
1994, Caudle 1995)
Business Process Redesign
2.
Business Process Redesign
removing non-value added Direction
setting
and
performance and
little
usually a project that aims to streamline processes by
activities
strategic
improvement objectives.
is
and attempting to integrate tasks in a process.
planning
focus
cross-functional
teams
on
specific
Processes generally remain intact with moderate increases in
to moderate changes in information systems and organizational
structures.
Additional resources are used and risk
to the level
of organizational change involved
(Davis 1994, Caudle 1995)
is
increased, as
compared to CPI, due
(e.g., culture, tasks, structure,
and
roles).
Business Process Reengineering
3.
BPR Radical
is
seeks to radically change processes to dramatically increase performance.
derived from the Latin
word
getting to the root of things, not only fixing
because
what
is
BPR is not
about
1
increases in performance.
&
Champy, 1993).
about
Dramatic
percent improvements, but stretching for order-of-magnitude
BPR
rejects the notion that significant gains in
and efficiency may be achieved through incremental improvements. (1993) define
is
already in place, but also inventing
new ways of accomplishing work (Hammer
completely
Reengineering
"radix" meaning root.
performance
Hammer and Champy
BPR as: and radical redesign of business processes to achieve contemporary measures of performance, such as cost, service and speed. (Hammer and Champy, 1993, pp.32)
the fundamental rethinking
dramatic improvements in quality,
critical,
Cross-functional teams, including outsiders (facilitators, customers, consultants), rebuild the entire end-to-end process. results
in
The scope of the change
high level of organizational
a
infrastructures and culture are apt to effort.
The
project
is
change.
change as the
effort,
the entire process, usually
Existing result
organizational
technical
of a successful reengineering
driven from the top-down using executive leadership and strategic
planning to lead the effort.
Information technologies are used to enable reengineered
processes rather than support existing processes.
Simply described,
and rebuilding the process from the ground up. (Davis 1994,
Hammer
BPR
is
starting over
1993)
Table 2-1 below, compares and contrasts the features of each of the process
improvement
strategies:
10
Features
Business Process
Improvement
Redesign
Rcenginccring
Accepts current process:
Focus on
Remove "hand
processes: Alter or
Improve what you do
Philosophy
Business Process
Continuous Process in
functional or subactivity;
quo
—
Accepts status
current processes
are what customers need
off'
of little value in
activities
critical
broken
replace basic approach to
an end-to-end
doing business in jobs,
examination
skills, structures,
Done on
Used
systems, culture
Timing
Part of a
way of life
to
a periodic basis;
project results in short
improvement may take a few months for simple
time frames
efforts;
continuously improve,
1
to 2 years if
efforts are
more complex
may
take several months; full
deployment across an entire
may Scope
selectively; sub-
process deployment
complex process
take 2 to 5 years
Coverage of many sub-
Scope
interrelationship of
processes and "turf';
major sub-processes that
business processes in a
internal focus
cover broad cross-
Little
emphasis on
is
entire process or
business system; internal
functional areas; includes
focus
interfacing outside the
organization
Broad-based, bottom-up
Leadership
Both bottom-up and topdown, more senior leadership needed
Management
focused,
top-down; significant senior
management and time
attention
Means
Improvement generally done by dedicated teams
part-time teams; use of
Improvement work often done by diversified task forces or teams that cross
quality tools
functions
activities;
work
facilitated
by process
Generally, improvement work done by work unit
representing end-to-end
sponsors and owners
Performance Gains
Incremental: Slightly
Moderately increases
Revolutionary: Greatly
increases (5-10%)
performance
increases performance
performance
Low: Resources generally
Costs, Risks, Pain
easily
handled within
existing budgets and
personnel allocations; small iterative investments; low-level effort offers
few
risks;
pain of implementation is
minimal
Low
may
require
"radical."
originally
Meaning
and
dedicated personnel
personnel; risks increase
risks greatly increase
somewhat as more
given extensive process
activities are involved;
coverage,
implementation pain
implementation pain
covers more activities
high
thought that the key word
that significant
significant funding
and personnel or adding more funds and shifting funds
Table 2-1. Process Improvement Approaches.
Hammer
High: Resources require
to moderate:
Resources
improvements
11
in
allocations; large,
upfront investments;
From Caudle,
in
his
is
1995.
definition
of
BPR was
performance were only achieved by
changing the process,
radically
or
from scratch
starting
recently recanted (1996) and stated the key
However, he
blank piece of paper).
(a
word
"process."
is
Whatever the approach the improvement team intends to improvement
is
the focus
on processes. The
strategies are only a matter
distinctions
of scope and
between CPI, redesign, and
improvement techniques, as presented
BPR on the
between the three improvement
distinctions
of organizational change.
level
BPR are blurred.
a process orientation and customer focus.
key to business
take, the
Therefore,
in Figure 2-3,
opposite end, and redesign somewhere
All share the
may be
it
In practice the
common themes
best to view process
on a continuum with CPI
in the
of
at
one end,
middle.
Continuous
Business
Business
Process
Process
Process
Improvement
Redesign
Reengineering
1
1 1
1 w^
Incremental
Radical
Improvements
Improvements Ask
Accept current processes
Look Try
for
to
ways
to
if process
Look
tune processes
modify components of system
Try
Avoid radical change and disruption
is
necessary
for radically different
to
make changes that
models
are dramatic
in hope of making improvements
Seek radical change significant
Level of Risk
Figure 2-3. The Process Improvement Continuum.
Adapted from Lucus, 1996. Additionally, the three strategies are not mutually exclusive.
of
BPR
It is
the combination
and CPI that allows organizations to truly become world class performers.
process-centered organization,
management
Hammer
CPI/TQM
describes
TQM
is
not an additional duty, but
and
12
BPR
as different
pews
is
In a
the essence of
in the
church of
process improvement (Hammer, 1996). traces the
needed
assumes the current process
sound and
is
symptoms of problems (broken processes) back to the "root cause" so the
underlying cause can addressed.
process
TQM
was put
If the
into place, large
Figure 2-4 shows
how
environment has significantly changed since the
improvements may be required.
TQM and BPR,
when used
This
is
where
BPR
is
together, allow for continuous
and breakthrough improvements.
i
i
*r~^
Process
Performance
Q r|
Q = Quality Programs R = Reengineering
"~cT
Time Figure 2-4.
CPI and
1996.
WHAT BPR IS NOT
D.
Some managers, when flavor-of-the-month, the
fade
BPR working together. From Hammer,
away
other
as the next
ways they
introduced to
BPR,
management buzzword
buzzword stakes
are wrong.
its
claim.
see
it
as another business
that will claim to cure
In
some
improvement
all ills
and quietly
respects, they are correct and in
The term Business Process Reengineering
is
new, the
concepts are not.
The concept behind
BPR
is
an extension of the systems theory, looking
organizations as a system of systems.
at
Systems theorists (Kast and Rosenweig 1972,
Optner 1960) and quality consultants (Juran 1974, Deming 1986) have proposed a process
view of organizations for years. British and American system
13
theorists, during
World War
II,
used these same concepts to analyze the complexities of war production and
(Hellriegel
and Slocum,
1960's systems theory was applied to
In the early
1993).
management (Optner 1960, Johnson,
organizational
logistics
of the same ideas put forth over 35 years ago sound
Kast, and Rosenweig, 1963). like the
Many
reengineering rhetoric heard
today.
What makes BPR new
is
using the combination of systems theory and modern
Modern information
information technologies to radically change a process. (e.g.,
networks, intranets, electronic data interchange, shared relational databases) allow
organizations to perform processes in
and
ways
that
Champy (1993) and Davenport (1993)
change the way business
Some of
is
done
Dilbert
comic
strips,
the phase
in light
were unthinkable 20 years ago. Hammer
highlighted and
championed the need to
of emerging technologies.
the confusion that surrounds reengineering might stem from the term
reengineering seeming to have
life"
technologies
is
become
a part of the national lexicon.
From
satire in
to car commercials that ask potential customers to "reengineer your
heard often.
The
diverse use of the term obfuscates the technical
meaning of the term.
BPR
is
not downsizing or rightsizing.
adjust to changes in asks,
demand (Hammer,
"how can we do more, with
BPR primarily
on
is
less?"
These techniques focus
not reorganizing, delayering, or restructuring.
structure, looking to
structure.
Reengineering addresses the process and
1993).
do the same processes, with a smaller
effect puts the cart before the horse, asking if
new
These are actions taken by organizations to
Or
as
Hammer
on top of an old process
is
one needs to
and Champy (1993) put
pouring sour wine into
change an organization's structure?
Of course,
new
it
alter a
process to
"Overlaying a
bottles."
new
Might the
but by designing the
This in
structure.
new
fit it
to the
organization
effects
of BPR
process, before
realigning the structure, the horse leads the cart.
BPR is
not about eliminating
hierarchy from an organization.
all
controls from a process or removing structure and
Bureaucracy busting, as
14
it
as
sometimes
called,
also
attacks the problem from the
along without
it.
wrong
As was mentioned
the fragmented process together.
If
angle.
you do not
earlier in this chapter,
BPR
allowing for a smaller bureaucracy and a
pulls the pieces
it
like is
bureaucracy try getting
the bureaucracy that holds
of the process together, thereby
flatter organization.
(Hammer
& Champy,
1993)
HOW IS REENGINEERING DIFFERENT FOR GOVERMENT/DOD?
E.
All organizations are public.
Their degree of publicness arises from the extent to
which they are governed by public authority whether laws, anti-trust laws and the like (Bozeman, 1993). exists for reengineering in
DOD
that
be labor laws, environmental
No
pure "clean slate" approach
any organization, certainly not within
DOD.
occurs in a political environment where a clean-sheet approach
or practical.
In addition to the usual notion of customers
is
Reengineering
in
seldom available
the operating forces)
(i.e.,
reengineering must also take into account the effects of change on a larger set of
customers,
commonly
called stakeholders.
Bryson (1995) defines stakeholders as "any
person, group, or organization that can place a claim on an organization's attention, resources, or output or
and executive
is
affected
by
that output."
These stakeholders include
interests, the taxpayers, the media, special interest groups, unions,
host of agencies (within and outside the receive services from the
DOD. These
DOD)
that in
some way provide resources
stakeholders have the
support, policy determinations, and funding (Caudle, 1995). in
legislative
power
and a for,
or
to influence political
Caudle defines reengineering
government:
Government business process reengineering is a radical improvement approach that examines, rethinks, and redesigns mission-delivery processes and sub-
critically
processes.
In a political environment,
it
achieves dramatic mission performance gain
from multiple customer and stakeholder perspectives. It is a key part of a process management approach that continually evaluates, adjusts, or removes processes or subprocess for optimal performance. (Caudle, 1995, pp. 10)
While
autonomy
BPR
in
government
the reengineering
is
similar to the private sector
it
differs to the extent
team has to change the process while
15
fulfilling
of
stakeholders
interests
and mandates. The reengineering team
BPR
the government (Caudle, 1995).
is
direction setting in the public sector and
F.
its
is
normally more constrained in executing
The next chapter relation to
take a closer look
will
at
BPR.
INFORMATION TECHNOLOGY AND BPR Information systems
(e.g.,
hardware,
software,
telecommunications,
management) are fundamental elements of most reengineering essential
allows organizations to
enabler that
However
reengineering
processes
is
do work
in
projects, serving as an
radically
not synonymous with automation.
is
analogous to paving
cow
paths,
it
and data
ways.
different
Automating outdated
way of doing
further reinforces the "old"
business by embedding processes in silicone. System developers have too often simply
automated existing processes without thinking about the need
(Hammer, 1990). "Automation simply provides more kinds of things"
(Hammer
&
efficient
that
radical
change
ways of doing the wrong
Champy, 1993).
Firms that do develop new applications must do so in a new way.
commonly
for
packages
tailor application
to
fit
Organizations
existing business practice, with the result
most business applications are functionally orientated; marketing systems solve
marketing problems, sales systems solve sales problems, manufacturing systems solve manufacturing problems.
Such "stovepiped" systems cannot support a process view of
the organization; they imprison data within functions, so that
new product
designs
cannot be released to engineering, sales data cannot be transferred to manufacturing,
and customers
for
one product who might be customers
for another product
cannot be
identified. (Davenport, 1993, pp. 44)
Likewise,
not
all
processes
consideration in any process. service and end
require
How
need
or
do you
feel
automation,
when you
call
the
a
human
company
factor
is
a
for customer
up moving through a maze of touch-tone options on a Interactive Voice
Response (IVR) system?
How
would you
feel if
you
called that
same company and
a
human voice answered "goodafternoonXYZcompanypleasehold"? Neither of the above examples
may be
acceptable customer service but serve to demonstrate a point, the lesson
being that automation should not be randomly thrown
16
at a process.
Information Technology as an Enabler of BPR
1.
Many
processes were never designed at
grew ad hoc processes formed
all,
handle a certain situation.
to
abnormality necessitated some sort of Band-Aid®
Technology was
first
seen as a
way
they just happened.
fix to
As
organizations
Each exception and
be incorporated into the process.
to support the process, automating tasks and speeding
the accomplishment of activities. But as Davenport stated this only served to reinforce the functional stovepipes.
and
information
flow to
new
reengineering,
Technology
used during reengineering to allow process
is
happen
ways
in
processes are
that
have never been possible.
automated,
not just
activities
but
enabled by
After
information
(Hammer, 1990)
technologies.
Reengineering leverages information technology (IT) to allow organizations to rethink fragmented processes and glue the pieces back together.
can
we
we
use technology to do things
use technology to enhance what
Reengineering
is
about
we
we
seeking
exploiting the opportunities IT provides.
break the rules that
How
limit
how
are already doing?" the question
is
"How
"How
can
(Hammer and Champy, 1993)
are not already doing?"
innovation,
Instead of asking,
new ways
to
accomplish the
mission,
This allows organizations to be innovative and
they conduct their work.
does IT enable reengineering?
Davenport (1993) declares that IT can
aid
reengineering in the following ways:
•
IT's automation capability can reduce or replace
Within service processes
it
human
labor in a process.
can automatically route images and text from
person to person. •
IT's information capability can be used to capture information about process
performance and allows the detailed tracking of tasks, inputs and outputs. •
IT has a sequential capability and can enable changes in
a process, often allowing multiple tasks to be
reducing cycle times.
17
in the
sequence of tasks
worked on simultaneously,
Because of its monitoring and tracking capability, IT can trace outputs to customers or inputs from suppliers, like those used in the transportation and logistic industries.
IT can bring complex analytical methods and decision-making capabilities to bear
in a
process.
IT can make processes independent of geography.
Through
IT, information
thus integrating
split
IT can provide an
may be accessed and used remotely by many
users,
tasks and processes.
intellectual capability
by allowing the capture and
dissemination of knowledge and expertise to improve the process.
two parties would otherwise communicate through an intermediary.
IT's disintermediation capabilities can pass information between
within a process that
The
tools that technology "brings to the table" helps to alter fragmented processes and
bring
them
driver,
together, thereby enabling reengineering.
Technology
is
an enabler, not a
of reengineering. 2.
BPR and
the Role of the Information Systems Staff
Successful reengineering projects must
strike
a balance between reliance
Information Systems (IS) personnel and general management. identify the applicable technologies, design,
reengineering.
IS staff have the
on
skills to
implement, and manage the technical areas of
Because of the important role of IS
considered partners in the reengineering effort.
in reengineering, the
IS staff must be
Their involvement on the cross-functional
teams, early in the effort, highlights the importance of IT and allows the IS staff to
preview the proposals
move from "order
(i.e.,
a sanity check) for implementation hazards.
The IS
role
must
taker" and "system mechanics" to one of a partner in leadership
(Martinez, 1995).
Hammer
admits that 50 to 70 percent of reengineering efforts
intended dramatic results (Hammer, 1993).
fail
to deliver the
Martinez (1995) states that more often than
not this failure "can be attributed to the companies failure to engage IS as a true partner in
18
reengineering." benefits
However, IS should not take the
of managers
accountability for the
reengineering
leading
new
lead for the overall effort, the obvious
initiatives
are
that
responsibility
and
process are placed "on those most knowledgeable about
operations and most affected by the impending change" (Martinez, 1995).
Throughout the role
IS should be assessing current capabilities, redefining
effort,
its
and mission, developing strategies and architectures, developing a master plan, and
taking leadership roles where applicable
(e.g.,
application of technology to the process).
Project managers must pay careful attention to ensure that IS
developed plans harmoniously with the
of the
rest
effort for
is
smooth
involved and has integration during
project implementation.
TAILORING YOUR APPROACH TO PROCESS IMPROVEMENT
G.
The appendix presents three methods, or conducting process improvement.
approach that may be used by
model
is
all
situationally dependent.
What
is
specific step-by-step procedures,
the "best"
way? Unfortunately,
organizations, public or private.
there
is
for
no
The development of a
Successful organizations will tailor their improvement
models to the breath and depth of the change needed within sub-processes and across a process (Caudle,
1995).
Successful managers continue to use multiple improvement
techniques (quality teams, unit costing, technology-based methods, etc.) to leverage those tools and techniques in order to afford different insights to organizational
(Euske and Player, 1996). The inclusion of parts of the models presented along with the generic model proposed within
this thesis
improvement
in the
appendix
should allow process managers to
sufficiently tailor their approach.
H.
HOW THIS DOCUMENT WILL APPROACH PROCESS IMPROVEMENT There
All
is
a commonality
methods include project
between
definition
all
the process improvement methods researched.
and planning, an examination of the old process, the
modification or reengineering of the process, and project implementation that takes the
19
strains
These commonalties are addressed
of organizational change into account.
in this
thesis:
The
details of a specific
method
or approach to process innovation
inclusion of several key activities
is
critical to the success
may
of any
vary, but the
These
initiative.
include selecting processes for redesign, giving structured consideration to enablers of innovation, creating a vision, understanding the existing process, and designing the
new
process and organization in detail. (Davenport, 1993, pp. 300)
This document provides instruction into each of these phases
primer for your improvement
The remainder of this document
efforts.
in
order to act as
will
follow a rather
generic process improvement model shown below:
The phases addressed Phase
I:
model
in this
Direction Setting
-
are:
Ensuring the improvement effort
is
properly aligned
with the organization's vision and goals.
Phase
II:
Development of the
BPR
plan/timelines and
team
-
Setting
up the team
and planning for BPR.
Phase
III:
Analyzing the existing process
-
Ways
to view and examine the current
process for improvement opportunities.
Phase IV: Designing the new process
thumb
for designing the
new
-
How
to simulate creativity
and rules-of-
process.
Phase V: Implementation
-
Ensuring the project
is
properly implemented into the
organization.
Phase VI: Environmental Enablers and it
is
the considerations of
how
Inhibitors
-
This
is
not so
much
a phase, as
people affect the reengineering process and what must be
done to take account of the impact. This model provides the barebones of any improvement process. applicable to smaller organizations and
may be
20
It
is
tailored to their specific application.
readily
RECOMMENDED READINGS
I.
The following readings provide greater
detail into topics
covered
in this chapter:
The Electronic College of Process Innovation (ECPI): Achieving Breakthrough
Improvement
is
CD-ROM
a
(DTIC)
The ECPI
related to
BPR,
is
a
available through Defense Technical Information Center
knowledge-warehouse about
total quality
BPR
management, acquisition reform, and change management.
contains textbooks, guidebooks, and training course materials.
anyone considering
DSN: 427-8274
BPR
covering numerous topics
within the
DOD.
It is
It
a handy reference for
Copies may be ordered by calling
DTIC
at
or 1-800-225-3842.
Framework for Managing Process Improvement by Robert authoritative reference guide for
form on the ECPI
DOD
process improvement.
It is
J.
Davis
is
the
available in electronic
CD-ROM or hard copy through DTIC.
Reengineering the Corporation by Michael
Hammer
is
recommended
for learning
the core of reengineering from an executive standpoint, without being cluttered with a
methodology.
21
22
ORGANIZING FOR BPR
in.
Before rolling up the processes,
some key
and reengineering the organization's business
sleeves
decisions need to be made.
•
Do you
•
Will the reengineered process contribute to the organization's goals and
require the help of consultants?
objectives?
Why is the
process done
What can
at all?
Is
it
they do for you?
congruent with the
organization's strategic direction?
•
Who
•
Which processes should be reengineered?
is
needed for a successful reengineering project? What Is the
This chapter provides guidance to help the reader
will
they do?
process really broken?
work through
and properly prepare for a successful reengineering project. The
first
these questions
section discusses the
benefits and problems of using outside consultants to aid the organization throughout
reengineering. Next, direction setting
is
introduced, ensuring reengineering
the organization's vision and goals. Lastly, the composition and roles of the lead and do the
A.
work of reengineering
is
aligned with
team
that will
are considered.
CONSULTANTS Consulting
getting bigger.
is
big business, and due to the recent interest in reengineering
By some
estimates consulting for reengineering projects
now
it
is
provides
approximately 20 percent of the revenue for the consulting industry, or anywhere from $1.4 to $2.6 billion a year.
Why
do organizations
reengineering project? Reengineering basis, or
is
have ever done for that matter.
can be daunting. their efforts,
It is
namely
feel the
need to hire consultants for the
not something that organizations do on a routine
The
idea of taking
on such a risky undertaking
because of these reasons that organizations have sought help with
in the
form of consultants. (Hammer, 1995)
23
What Can
1.
Consultants Do?
Hammer
According to
(1995) consultants can aid
in the
reengineering effort in
three ways: head, heart and hands.
The Head
a.
Consultants can bring experience and knowledge to the project (the head).
Many of
application of these techniques.
Costing
complex and require
the tools used during reengineering are
(ABC)
are
all
training for the
For example, Benchmarking, IDEFO, and Activity Based
disciplines in their
own
right.
The use of either
external or internal
consultants can aid the reengineering team in the application of these tools. the team to focus intricacies
of the
on
their
primary goal of redesigning the process and not on learning the
tools.
Consultants bring specialized organization
1995)
may need
Some
experience, and
skills,
to steer efforts
that the
but cannot afford the cost or time to develop internally (Shabana,
Using the lessons learned
at
other organizations they
around expensive or time-consuming
b.
may know how
pitfalls.
The Heart
Consultants can also provide the "heart." the project the consultant
may be
In the tough times throughout
able to motivate and enthuse the team.
By
acting as
they are in a position to mediate the conflicts that are likely to occur during
reengineering. participate in transition."
know-how
consultants have the ability to transfer their knowledge from reengineering
other organizations.
facilitators
This allows
Their dedication to the effort
communication
efforts,
may be contagious
as they counsel leaders,
support the teams, and help "navigate the rapids of
(Hammer, 1995)
c.
The Hands
Consultants
may
lend extra sets of hands to the project.
organization does not have the available
manpower
24
What
if
the
to devote to the effort? Reengineering
is
time consuming work, even the simple projects
may will
If the organization
involve years.
may
take months, and larger projects
does not have slack resources (man-hours)
who
do the detailed work of reengineering? Consultants can lend a hand to help develop
the models, run the numbers, and complete the documentation.
The Pro's and Con's of Consultants
2.
Outsiders provide a fresh set of eyes, unbiased by the present organizational
They sometimes provide another perspective
culture.
and
in the
design of
may
to protect, or
new
or reengineered process.
believe the present process
Outsiders, or consultants,
may
find
it
of the old process
in the analysis
Organizational insiders
works
fine the
easier to say the
way
is
it
may have
turf
(Interview, Haga).
emperor has no
clothes.
Larger
consulting firms can provide assistance by helping to develop the software and databases that might be required to
implement the project.
Few
organizations have the
skills
and
experience to implement change throughout the organization, a good consulting firm brings this kind of experience with them.
(Hammer, 1995)
Consultants however, can be a double-edged sword. consultants to lead the effort results
of the
dangerous.
is
It is
your organization
have collected
effort long after the consultants
Depending
entirely
on
that will live with the
their fees
and gone home.
By
not actively involving the organization's
own
the necessary talent in-house
Additionally, by not involving the organization's
personnel
in
is
missed.
personnel, a golden opportunity to develop
conjunction with the consultants'
work
little
monitoring
may be done
to
ensure the consultants are doing a proper job. For instance, one Chicago bank hired a firm
and allowed the consultants to position themselves as the leaders and owners of the entire project.
When
the bank discovered the consulting firm
information to hide problems, the
bank was forced to
it
start
was too over.
late, six
was using
(adapted from
effort.
The use of consultants
Hammer,
Summarized below
control over the
to
be scrapped, and
will
depend on the
months of plans had
organization's experience with process improvement and the
devote to the
its
amount of time
available to
are the pros and cons of using consultants
1995):.
25
Pro-The
companies' experiences
ability to leverage other
Pro-Getting access to essential
skills
Pro-Third-party objectivity
Con-The
risk
of outsourcing an important capability
Con-Incurring significant expense
Con-Diffuse accountability
Con-Risk of expecting the consultants to have
all
the answers
Con-Risk of having the consultants' biases influencing organizational decisions
Not
all
companies use consultants.
Texas Instruments and Harley Davidson both
have chosen not to use consultants during reengineering (Barrett, 1996). Instead teams
The
the corporate level are available for use by the divisions during process innovation.
advantages
of
internalizing
the
change
function
is
the
clout
at
with
associated
recommendations generated from within the organization, thereby avoiding the "notinvented-here"
syndrome
(Barrett,
1996).
Also while
it
is
consultants to diagram processes and functions, their diagrams
certainly
may
possible
ignore the political
and organizational forces that have shaped existing processes (Shabana, 1995). forces are a necessary consideration throughout the project and
may
for
These
not be recognized by
the consultants.
Furthermore,
at
least
consultant's interventions had
one study (Shabana, little
1995) shows that the "level of
influence over the success of the
the outcomes and implementation dimensions."
He
credits this to the
BPR
project in both
"wide fluctuation
the quality of services currently offered by consulting firms" and the trap that
organizations
fall
into "expecting consulting firms to reengineer their processes with
or no contribution on their part" (Bashein, 1994).
26
As
is
in
some little
further explained in Chapter 6,
the
outcome of
the project
is
on the organization's commitment to
ultimately dependent
the project (Shabana, 1995).
PHASE
B.
I:
DIRECTION SETTING
This section planning
titled
is
direction setting rather than the broader term
order to properly place this exercise
in
much
in the
strategic
context of a small organization
larger bureaucracy, the primary audience of this report.
Additionally,
the term strategic planning seems to downplay the significance of action.
Plans never
operating
in
a
executed, or executed poorly, are useless. For these reasons the author has elected to use the phrase "direction setting."
Direction stetting connotes an azimuth for action, the direction to which the organization will strive for throughout the reengineering effort. organization
overarching strategies the organization.
may
Below
Every organization
in
direction
identifying
good
is
its
charge of an
(DOD)
the specific
is
why
whom they
they exist, and
created for a purpose.
routine sets
be
likely to
in,
increasingly
is
generally
however, does not eliminate the need for these smaller
This,
and objectives are
grows
larger organization
is in
the business unit or functional area strategic planning
organizations to think through
more complex, and
one
not be relevant or applicable to the tactical level execution of
not required (Davis, 1994).
specific goals
much
a particular need of a
fulfilling
If
clear.
exist for.
In the early years the mission
As
the organization matures,
and the
becomes
the specific mission and the communication of changes
complex and
difficult
(Simons,
1995).
Only
reason for being can an organization begin the reengineering process.
reengineering a process, and making
it
more
efficient, if
it is
after
What
not properly aligned
with the vision and objectives of the larger organization? Until the organization asks what it
should be doing, the question of
spent on reengineering
how
may be wasted
if
best to
do
it is
moot.
The time and resources
leadership has not defined the strategic direction.
(GAO/ATMD-10.1.15, Davenport 1993)
Figure 3-2 shows
27
how
mission
is
a critical
work
consideration in defining in the
processes, and
it
is
from the mission that
all
other elements
process flow.
Mission Defines
Vj
||
Accomplish
Work Processes Execute
\J
Guide ft
Decisions
Consider \)
Supports
Information
Employs
{j
4r
Processes
Technology
Work Processes From GAO/AMED-IO. 1.15.
Figure 3-1. Relationship between Mission and
Technology. Direction setting
mission
is
still
is
to Information
looking back to the organization's mission,
seeing if the
applicable and relevant, to ensure the reengineered process
is
properly
aligned with the organization's mandates and mission.
Measuring how well the agency's core business processes perform in terms of cost, quality, and timeliness in serving customers helps the agency prioritize areas for improvement, decide whether reengineering is in order, and make a compelling argument for investing time and resources in redesigning a process to achieve better results.
The
who
(GAO/AMID-10.1.15, 1997,
results
of the
this
pp. 14)
phase are a clear organization mission, an appreciation of
the key customers or stakeholders are,
define success.
With
this
how to meet
their expectations,
and metrics to
information the reengineering team can set out with specific
goals and not waste time determining what their objectives should be. (Davis, 1994)
28
Identifying Organizational
1.
Mandates
Before reengineering any applicable mission statements,
documents should be reviewed by leadership to must do.
The
legislation,
ascertain what, in fact, the organization
In this context, mandates are the requirements of the organization as a whole.
military
the idea here
is full
is
of mandates
in the
form of Standard Operating Procedures (SOPs) but
to review the relevant policy
exists, its mission,
and what
it
is
documents
required to do.
that lay out
why
the organization
Bryson (1995) has found that unless
organizational mandates are clear and well known, organizations will likely all
and policy
make one
or
of the following mistakes: •
By
•
They may believe they
not
knowing what they are
are supposed to do, they are not likely to
more constrained
in their actions
do
it.
then they actually
are.
•
They may believe allowed to do it.
The outcomes of
this
that unless specifically ordered to
do something, they are not
review are the identification of formal and informal mandates, the
requirements of these mandates (possibly leading to goals and/or performance indicators),
and an understanding of what actions are
mandates the organization
may
revisits the
specifically
off-limits.
By
reviewing the
sphere of the organization's possible actions and
continue with the direction setting process having a better understanding of what
it is
"formally and informally required to do (and not do) by external authorities". (Bryson,
1995) 2.
Customer and Stakeholder Analysis
Reengineering should be focused on the customer. organization should have an understanding of
who
its
Before reengineering, the
customers
are,
and
their
needs and
expectations. This information will be used to guide the reengineering effort and set goals for cost, quality, and cycle-time for the organization's outputs (products, information).
29
In addition to customers, there exists another set
of people/organizations
who have
the ability to influence the organization or that are affected by the actions and strategies
These other groups, outside the immediate boundaries of the
the organization pursues. organization, are
known
as stakeholders. Stakeholders
may
include, suppliers, regulatory
groups, inspectors, higher headquarters, and subordinate units.
Stakeholders can play an
What
important role in reengineering through their ability to influence the process. their expectations?
What
is
are
the gap between current performance and their expectations?
This defines the measures the reengineering team will consider in order to bridge that gap.
If
an organization does not know
who
its
[stakeholders] use to judge the organization,
against those criteria, there
should do to satisfy
its
is little
stakeholders
are,
what
and how the organization
likelihood that the organization will
they
criteria is
performing
know what
it
key stakeholders. (Bryson, 1995, pp. 70)
Stakeholder and customer input, gathered throughout reengineering, or even their
involvement on the reengineering team are keys to success and will help to shape the mission and guide the reengineering
Clarifying Mission
3.
If
effort.
you do not know where you're heading, you're
likely to
end up somewhere
else.
—Yogi Berra
Typically missions for organizations operating within the larger mission.
to provide
DOD's
largest mission, "provide for the
much guidance
mission defines
why
in
it
sets the
common
are subsets of the
defense,"
terms of direction for process innovation.
the organization exists,
its
contributes to the larger organization's purpose. issue,
DOD
is
Reviewing the
organizational purpose, and
Mission development
not likely
is
how
this
a leadership
course and direction of the entire organization and the reengineering
initiative.
Clarifying mission involves looking at the critical factors that define success for the
organization, reaching a consensus on
what
it
30
is
to accomplish for
whom, and by when
Bryson (1995) presents
(GAO/AMID-10.1.15).
questions
six
that
serve
to
help
organizations clarify their mission:
Who are we?
•
Separate what the organization
from what
is,
it
does.
Organizations are a means to an end, not an end in themselves. identity
of the organization? What does
For instance,
in the early parts
it
mean
to say
you are
What is the who you are?
of the 20th century the railroad companies saw
themselves as railroad companies and not as transportation companies that
happened to be themselves
The
in the railroad business.
was an
inability to
result
of this definition of
recognize the rise of new competitors like the
automobile and trucking industries. •
In general, what are the basic needs social or political problems
•
we
we
exist to
exist to meet,
or what are the basic
address?
do we do to recognize, anticipate, and respond to these needs or problems? The more that the people in the organization as a whole attend to external needs and problems, the more likely it will be that a climate
In general, what
conducive to innovation
will prevail,
and the easier
it
will
be to justify desirable
innovations to internal audiences. •
How should we respond to our key stakeholders?
•
What are our philosophy,
values,
and culture? Only
strategies that are
congruent with the philosophy, core values, and culture are
What makes us
•
By
distinctive or
clarifying mission, process
of the
likely to succeed.
unique?
improvement
is
given meaning and direction in the context
entire organization.
Vision of Success
4.
The wants to
vision of success, or vision statement,
be,
organization
the end-state, the
should
strive
for,
commander's the vision
is
the vision of what the organization
intent.
It
of success.
is
Vision helps to inspire the
reengineering effort by describing the organization's future successfully implemented and adopted
policy and decision making.
It
by the organization.
lays out the values, ethics,
31
the picture of what the
when
innovation plans are
Vision provides a basis for
and morals that describe
how
the organization will
move towards
the vision.
defines the boundaries that will not be
It
crossed in pursuit of its mission.
Goals, Objectives and Performance Criteria
5.
Without measurement, you cannot control
manage
If you cannot manage
it.
it,
Goals are refinements to the
it.
you cannot control
If
you cannot improve
They
vision.
it.
identify
-
H.
how
Goals support and quantify the mission and
strive to perform.
J.
it,
you cannot
Harrington.
well the organization will
vision.
Clausewitz stressed
the importance of goals and objectives for military operations, and goals are
no
less
important for reengineering military organizations.
Goals for reengineering should be ambitious stretch goals, for instance, over 50 percent improvement (Davenport
improvements of
1993,
five or ten percent,
it
Hammer is
1993).
Reengineering
is
not about
about breakthroughs and quantum leaps
performance (Caudle, 1995). Stretch goals motivate reengineering,
set the goals small
the reengineering team will likely deliver small results, incremental improvements.
team
aggressive, bold goals and the reengineering strive to
develop
How ways:
new ways
will
identify their stakeholders, internal
reengineering
Successful
and external customers, and what
their
Two
projects
performance
Goals are established that direct the organization to meet or exceed
expectations are. these expectations.
communicate extensively with They ask what the performance problems
organizations
stakeholders. is
doing to meet their performance expectations.
their
are
customers
and
and how well the
They ask what business
processes should deliver as final products and services, what performance levels should be,
Set
to conquer the problems.
customer involvement and benchmarking.
organization
and
be forced to think creatively and
should the process performance goals be established and measured?
Successful
in
and what suggestions customers and stakeholders have about
enable improvement (Caudle, 1995, pp. 22)
32
factors that
might
Another way to determine process goals
is
through benchmarking. Benchmarking
involves comparing the process being reengineered with a similar process within the organization, or a similar process in an outside organization that does a first-class job.
The purpose
is
to find out
who
does
job the best.
this particular
Benchmarking
is
discussed in detail in Chapter IV.
Each goal should contain
by how much, and by
as least three elements: what,
when. For instance: •
Reduce development cycle time by 50 percent
•
Double customer service
satisfaction levels in
•
Reduce processing costs
for customer orders by
Measures must be developed to determine.
what the organization
instance, in the former Soviet Union,
was rewarded on the that
was
two years 60 percent over three years
relevant to the workers performing the
desires to achieve (mission and vision).
management
manufacturing
at sheet glass
basis of tons of glass produced.
The
result
The measures were then changed
thick and heavy.
years
that are affordable to collect, readily available or easy
They should be understandable and
process, and measure
in three
was poor
For
facilities
quality glass
to square-foot
of glass
produced, and the predictable results were thin glass that was no more usable than before (Euske, 1984). criteria
An
effective performance
measurement system should
fulfill
the following
(From Defense Enterprise Planning and Management, 1996): •
Validity:
•
Reliability:
It
conditions,
must measure what
On it
it
sets out to measure.
re-assessment of the same things, under the same/similar
must produce the same/similar data or information.
The performance measure captures
•
Utility:
•
Strategic Focus:
It is
the kind of information needed.
aligned with the higher organization's vision and goals.
33
•
Systematically Optimized: as vertical reporting.
To improve performance and
Measure
quality
horizontal, as well
of output (effectiveness) as opposed to
focusing only on efficiency (cost of production). •
Integrated: Evaluates cost, quality,
•
Understandable and Useful: Easy to use
etc.
(so
gets used) and has an assigned
it
owner. •
Selective: Includes a reasonable
number of measures
critical to success.
Provides assessment of things that provide a balanced perspective of performance.
It is
effective analysis
easy to get "data/information overload", which hinders
and use of performance measurement
results.
Use common
sense.
•
Relevant and Appropriate: For the intended audience and organizational setting.
•
Cost-effective: Available at a reasonable cost. analysis
must not be excessive. Purchasing expensive hardware
computers) to gather data that the data
The cost of data
is
very useful, the cost
is
of marginal use
may
still
is
collection and (e.g.,
not cost-effective.
Even
if
be excessive.
Performance targets define and measure progress toward meeting goals and objectives.
way
They provide gates and check-marks to meet during an improvement
to monitor and measure the success of process improvements.
organizational goal
is
For instance,
months, another 30 percent by the end of the
linkage between mission and action.
At
least
performance
1
four
target.
if
a
an
to double customer service satisfaction levels in three years, a
performance target might be to improve customer service levels by 50 percent six
effort,
categories
in the first
first year.
Performance targets provide a
can be
developed for each goal or
*
of measures
Consider developing process measures that describe fitness for
The Defense Technical Information Center (DTIC) can provide software support for tracking goals and targets. TurboBPR uses graphical and spreadsheet formats for periodically tracking process
performance
performance targets and actual performance.
34
purpose, conformance to standard, process time, and process costs as described below (Davis, 1994):
•
Fitness-for-purpose provides a means of measuring the effectiveness of a
process or product with respect to stakeholder interests. •
Conformance-to-standard provides a means of measuring the quality aspects of a process or product.
•
Process time measures quantify the response and cycle time characteristics of a process.
•
Process cost measures weigh the efficiency and productivity characteristics of a process.
These measures may be developed for any of the stakeholders identified during the customer/stakeholder analysis.
How
and for whom, they are identified for
is
dependent on
the needs of leadership with respect to the particular organization, process, or product.
Strategies
6.
Strategies are the plans, policies, programs,
organization to meet performance targets, organization's vision (Bryson, 1995).
and decisions that
goals and
objectives,
Strategies are the bridge
will enable the
and ultimately the
between
specific actions,
the vision, and process reengineering.
Bryson (1995) presents a five-step process for strategy development:
1
What
are the practical alternatives, dreams, or visions
we might pursue
to achieve
this goal, address this strategic issue, or realize this scenario?
2.
3.
What
are the barriers to the realization of these alternatives, dreams, or visions?
What major
proposals might
visions directly or to
4.
What major
we
pursue to achieve these alternatives, dreams, or
overcome the barriers
to their realization?
actions must be taken within the next year (or two) to
implement the
major proposals?
5.
What
specific steps
proposals,
and who
is
must be taken within the next
responsible?
35
six
months
to
implement the major
Strategies take into account the opportunities and threats of the external environment, the
strengths and weaknesses of the organization, and the mission to develop plans that will
allow the achievement of the organization's performance targets and goals.
C.
PHASE
H:
DEVELOP THE REENGINEERING PLAN
Reengineering to pull off such an
often underestimated in the amount of time and people required
is
enormous task (Hammer, 1995).
process will ultimately involve most, section
first
if
not
Embarking on an improvement
of the organization (Hammer, 1995).
all,
This
presents the duties of key people throughout the organization that will have
an important role throughout reengineering. Next, the symptoms of broken processes and the selection of which processes to reengineer 1.
The Roles
Reengineering
in
first
BPR
not a one person show.
is
are offered.
As
the process
be familiar with some of the many roles of people engaged
in
owner you might already
the process. This section will
discuss the roles of the people that should be involved in the process. graphically illustrates the
between
members discussed
in
the following sections.
different authors but the overall structure remains
36
much
Figure 3-2
The names change
the same.
EIT
/
Steering
Committee CO Reengineering Leader
Czar
PITs
Reengineering Teams:
/
I
Process
Process
Process
Owner
Owner
Owner
BPR.
Figure 3-2. The Roles in
Adapted from Harrington, 1991 Executive Improvement
a.
Team
Also called the steering committee,
(EIT)
this is the
that provide overall guidance to reengineering efforts.
group of senior executives
The EIT
is
usually comprised of
the leader/Commanding Officer and the heads of the functional departments within the organization.
decide
The EIT does not do the work of reengineering but should
priorities,
lead, support,
and approve new processes and organizations as they are formed
(Currid, 1994).
These members must be willing to shed to positively mentality.
The EIT
The primary
Champy •
change
their organizations, is
and avoid
their traditional roles,
have a desire
falling into a "protecting their turf'
normally organized and coordinated by the reengineering leader.
duties of the
EIT
are (Adapted
from Harrington 1991 and
1993):
Communicating the need for change to the
37
entire organization
Hammer
&
Releasing required supporting documentation Identifying
problem processes
in
(i.e.,
directives)
need of improvement
Assigning business process owners Identifying resources for the reengineering effort
(i.e.,
manpower, money)
Registering process improvement teams (PITs)
Defining business strategy and customer requirements
Following up to ensure that process improvement Resolving conflicts that cannot be handled
at
is
an organizational priority
lower levels
Providing rewards and recognition to members of successful PITs
Within the EIT some roles of key players usually emerge, namely the reengineering leader
and the reengineering czar. They
may be
either appointed as such or
may
naturally be self
appointed.
Reengineering Leader
b.
Sometimes the
called the reengineering champion, the reengineering leader
most important job for successful reengineering.
The
leadership and enthusiasm keeps the effort moving.
customize the entire effort (Harrington, 1991).
He
must have the clout to cause an organization to not brings, but to relish
it.
The
leader understands that
response to the external environment or as
it
should be.
He must be
own
is
the executive
leader's job
acts as a visionary just accept the if
is
fizzle.
Some
and motivator.
the organization
probably not be able to implement the changes
may
He
changes reengineering
internal capabilities,
studies
whose
to develop and
is
not changing
is
not as effective
it
"seized by a passion to reinvent" the organization.
strong leader, the effort will likely will
its
This
is
in
Absent a
get done, but the organization
(Hammer
& Champy,
1993).
The leader helps process owners by breaking through obstacles and ensuring an environment of change
is felt
throughout the organization.
38
Reengineering Czar
c.
Since the leader of the reengineering project
members of the organization he may be organization.
When
or champion.
The czar
first
this is
the leader's chief-of-staff for the reengineering project and calls for
guidance and direction.
"one, enabling and supporting each individual process
team, and, two, coordinating 1993).
up with the day-to-day tasks of running the
happens another role sometimes appears, the reengineering czar
person the process owner
functions:
tied
usually one of the senior
is
all
She must be trained
able to focus her energies activities, or a part-time
accordingly.
The
ongoing reengineering
in,
on reengineering.
is
the
She has two main
owner and reengineering
activities"
(Hammer and Champy,
or familiar with, reengineering concepts and tools, and
job for smaller
czar's job
is
This
activities so
may be
a full-time job for larger
long as her other duties are retailored
to (Adapted from Harrington 1991 and
Hammer
&
Champy
1993):
Customize the process improvement
effort to the business
and
sell
the
approach throughout the organization Develop,
in
conjunction with the EIT, procedures that define
how
reengineering will be implemented within the organization
Serve as the EIT's eyes and ears Prepare the job descriptions for the process owners and the PITs
Review and monitor the progress of the PITs Provide guidance and direction to the PITs
Aid
in the selection
of process owners and reengineering team, and selection of
processes to reengineer
Ensure the coordination between reengineering teams, mediate and resolve disputes between reengineering teams
Developing lesson's learned and other documentation for use during future reengineering efforts
39
The Process Owner
d.
The process owner efficiency and effectiveness
or for
many processes being
is
He
advocacy and oversight of the process.
success and failure of the reengineered process
from
start to finish,
money) are
is
is
is
is
is
identified
familiar with the entire process.
The
on the shoulders of the process owner
expected to take actions to ensure the entire process,
By
improved.
available to the process
responsible for the operating
Within each process a process owner
reengineered.
He
is
During reengineering there may be one
of the entire process.
and the reengineering team.
who
the person
ensuring the proper resources
owners they may focus
entirely
(manpower and
on the improvement of
that process.
The process owner process, not just a slice of
need for improvement
it.
lies,
is
given the perspective of looking through the whole
He must
focus his efforts and resources where the greatest
whether that
is
within a certain function, or the hand-offs
between functions (the white space on the organizational
chart).
His job
program manager. A program manager usually has very specific new product by a certain date, in conformance with customer requirements). The business process owner's goal is to improve the assigned process to the point at which it reaches best-of-breed status and to keep it at that level. (Harrington, is
comparable
goals
(i.e.,
to a
to deliver a
1991)
Appointed by the EIT or management, the process owner's
responsibilities
during reengineering are to (Adapted from Harrington, 1991):
•
Act as the representative for
•
Ensure that the overall goals of the process are met and that the improvements
made within
the process
all
functional managers
do not negatively
affect other processes or other parts
of the organization (sub-optimization) •
Define the preliminary boundaries and scope of the process
•
Form
•
Ensure the PIT
a Process Improvement
is
Team
(PIT)
educated or trained
principles
40
in the tools
of reengineering and
its
Organize the PITs
•
and conducting meetings,
activities by: planning, preparing,
following up on PIT activities, and resolving or escalating differences between
PIT members •
Safeguard the integrity of measurement data
•
Identify critical success factors
•
Define sub-processes and their owners (usually
•
Identify
and key dependencies of the process line
managers)
and implement process changes required to meet business and
customer needs Maintain contact with the czar and
•
EIT
regarding: the
PITs progress, resource
requirements, automation and mechanization issues
mechanisms for continuously updating procedures and improving the effectiveness and efficiency of the overall process
•
Establish the appropriate
•
Maintain contact with the customers of the process to ensure that their expectations are understood and met
Keep the PIT informed about changes
•
Who a person
who
is
that
may
effect the process
should be the process owner? The process owner selected should be
concerned and involved
in the present process,
has the power and clout to
influence changes in policies and procedures affecting the process, has developed strong leadership and group
the
entire
process.
skills, is
It
is
confident and persistent, and
is
familiar with the
up to the process owner to organize and
workings of
facilitate
the
reengineering team throughout the process, a challenging and daunting task, but one that
might be very satisfying to the right individual.
e.
The Process Improvement Team
The Process Improvement Team or reengineering team
work of action
reengineering gets done.
on a
is
where the actual
This group, along with the process owner, will take
specific process, analyze the old system,
system, and plan out the details of implementation.
41
redesign or reengineer the
The PIT
is
new
a small group (about 5 to
10 people) of insiders
who
and
represent the various functions being reengineered
outsiders of the current process. Insiders it.
know
the existing process well, or at least their functional part of
They have worked within the process and understand the process "flow."
intimate
knowledge of the process
is
both an asset and a
liability
Their
They
of the team.
are
quickly able to point out deficiencies and the causes of the problems in the current system.
However, because of the time they have spent with the old system they may
new ways of performing
to design
find
it
harder
the process.
Insiders... are incapable of reengineering a process.
Their individual perspectives
be too narrow, confined to just one part of the process.
may
Further, insiders can hold a
vested interest in the existing process and the organization designed to support
it.
It
would be asking too much to expect them, unaided, to overcome their cognitive and institutional biases and to envision radically new ways of working. (Hammer and Champy, 1993).
Therefore the best insiders to have on the PIT are the "mavericks" that are smart enough to understand the old system, open enough to critique and support the reengineered process, and credible enough to muster the support of their functional counterparts. brightest"
Ideally, the
persons assigned from the functional areas are the "best and
(Hammer and Champy,
Due
to the aforementioned reasons, insiders alone
reengineering the process alone. valuable.
1993).
This
Outsiders objectivity and naivete
will stimulate
new ways of approaching
reengineer the
new
A
process
ratio
(consultants), or
where the
may be
is
so
use during the analysis phase, but
when
it
comes time
to redesign or
1993).
of two or three insiders to each outsider seems to be the rule
The
outsiders
may come from
outside the organization
from within the organization but outside the process.
suppliers,
a tough time
fresh blood of the outsiders
little
the problem
(Hammer and Champy,
(Hammer and Champy, 1993)
from the
is
may have
Representatives
customers, or stakeholders of the process can bring their priorities and
recommendations to bear on the new process and are therefore important members of the
42
team.
Outsiders must be big-picture thinkers,
process, and bold
enough to voice
and the contention that
may
result,
who
their opinions.
can quickly get up-to-speed about the
The mixture of
insiders
and outsiders,
must be carefully managed by the process owner.
Outsiders in the form of personnel from IS should be engaged
from the beginning. As discussed applications for IT in the
new
in the last
in the
PIT
chapter they have the capability to introduce
process.
The team members'
responsibilities
are to
(Adapted from Harrington,
1991):
Participate in
Conduct
all
PIT
activities (e.g., train in
BPR activities in
his or her
BPR techniques,
attend meetings)
department as required by the PIT
(e.g.,
obtain "local" documentation, develop a flowchart of the department's participation in the process, verify application of the participation in the
process, verify application of the process, measure efficiency, and help
implement department changes) Participate in the design of the
Implement changes
in the
new
process
process as they apply to his or her department
(e.g.,
supervise production of new documentation, organize training, and perform
follow-up work)
Chair sub-process teams as appropriate
Support change
(e.g., inform,
encourage, provide feedback, and
listen to
complaints) Train and involve other department
members
as appropriate
Solve process-related problems
Provide his or her department with a better understanding of how total process.
43
it fits
in the
Finding the Processes
2.
to Fix
The process owner
Processes, not functions or organizations, are reengineered.
However, the EIT should have
has likely been assigned a specific process to examine.
used some sort of method to choose which processes require attention. briefly describes
how
section illustrates
More
a process should be chosen for reengineering.
some of
the attributes of broken processes.
This
This section
importantly, the
is
useful for the
process owner to gauge the extent to which his/her process requires improvement.
Identify the
a.
Major Business Processes
how
All businesses use processes, these are
of macro-level processes
identification
leadership will need to conclude
the
not always easy
is
work
or
effort
in
The
However,
intuitive.
what the organization's processes are
communication during the reengineering
gets done.
order to facilitate
and to provide a context for understanding
sub-processes.
Texas Instrument's (TI) semiconductor division does about $4 business annually.
When
TI embarked on reengineering they were surprised TI identified
macro-level processes operate within their organization.
six
billion
at
of
how few
processes:
strategy development, product development, customer design and support, manufacturing capability,
customer communications, and order
more than ten
& Champy,
(Hammer
principle processes.
Within the Marine Corps, the
work: command, acquire force operations
assets,
(MCPIP Force
processes could be broken identification
Few
organizations operate
1993)
identified five principle processes at
provide capabilities, sustain readiness, and provide for
Structure Process Reference Book, 1995).
down
into multiple levels
The process assigned
larger macro-process.
larger goals
MCCPIP
of these macro-processes allows for a
during reengineering.
some
fulfillment.
of sub-processes.
common
to the process
In these cases the process
of organization.
44
Each of these However, the
vocabulary and perspective
owner
is
likely a
must be taken
in
sub-process of context of the
Selection of Processes for Improvement
b.
Once
the organization's processes have been identified the question then
becomes which processes
to reengineer
the processes that have a strong impact
If reengineering
first.
on the organization,
is
new
that are truly broken,
have the greatest potential for successful change should be tackled
low hanging
Part
fruit first.
D
of
this section
may
to the organization,
first.
and that
Reach
for the
help in the identification of broken
processes.
The
GAO
(GAO/AMID-10.1.15) provides
organization determine which processes to reengineer
•
first:
Processes with the strongest link to organizational mandate and mission, and the highest impact
•
the following guidelines to help
on customers
Processes with the biggest potential return on the resources invested
improving them
(e.g.,
in
processes that cut across several functional units where
opportunities to reduce hand-offs, reviews, cycle time, and costs
may be
greatest)
•
Processes where change management issues can be more easily resolved
because there
is
strong consensus
among
the organization, stakeholders, and
customers on the need for change •
Processes that can be redesigned with currently available resources and infrastructure
•
Less complex processes where improvement goals can be achieved within a short period
of time and experience can be gained
reengineering
Identify Process Boundaries
c.
Before the Process
must be
in
established.
Owner can
These boundaries
begin to reengineer, the process boundaries
will identify
the level of detail included in the process.
where the process begins, ends, and
Identifying the boundaries includes determining
the potential involvement of functional units in the improvement process.
Davenport
(1993) presents five questions to help define the process boundaries: •
When
should the process owner's concern with the process begin and end?
45
•
When
•
Where do sub-processes begin and end?
•
Is the
•
Are performance
should process customers' involvement begin and end?
process fully embedded within another process? benefits likely to result
from combining the process with
other processes or sub-processes?
The process owner does not make these PIT, the Czar or
EIT
will
decisions alone.
want to ensure
In addition to the input
that the process boundaries
from the
do not overlap with
another PIT's responsibility or leave a gap between processes.
Symptoms and Diseases of Broken Processes
d.
Looking
owner and PIT some
at
how workers
insights into the problems that effect the
The following symptoms and in the identification
within a process operate
diseases are presented by
may
give the process
performance of the system.
Hammer
&
Champy (1993)
to aid
of broken processes.
Symptom: Extensive information exchange, data redundancy, and rekeying. Disease: Arbitrary fragmentation of a natural process. If information
is
being transferred from one computer printout into another
computer, or requires computers to electronically
move
the data
from one database to
another, or requires extensive communication between participants in the process,
suggests that a natural activity has been fragmented activities are reactions
smooth the
interface
by employees
between
in
Symptom: Inventory,
1993).
These
an attempt to pull the process back together and Faster,
activities.
symptoms of the problem and not the
(Hammer and Champy,
it
more robust
interfaces will treat the
disease.
buffers,
and other assets
Disease: System slack to cope with uncertainty This goes beyond inventory assets to include information, money, and extra workers.
Why
do workers and management generate and keep
inventory, and workers?
Is
it
additional reports,
to ensure the resources are there just-in-case
46
demand
Reducing
surges and additional items or information are required?
the slack in a
all
system requires certainty, which may not be possible, but by reducing the uncertainty
may be
system, one
One way
able to reduce the slack materials and
to reduce the uncertainty in a system
is
manpower
in a
built into the system.
to structure the processes so that
customers and suppliers can work together to plan and schedule the demand (Hammer and
Champy,
1993).
Symptom: High
ratio
of checking and control to value adding.
Disease: Fragmentation
Do
customers care about the audits, internal controls and quality checks of
The customer values
Probably not.
the organization?
reasonable cost, delivered where and
customer, they do not care
if
it is
when
done
quality results,
From
they need them.
produced
at a
the perspective of the
right the first time or the fourth time.
Like
TQM,
reengineering attacks the root cause of discrepancies, and focuses on eliminating the
causes of non-conformance.
Symptom: Complexity, exceptions, and
special cases.
Disease: Using one process to
needs.
When most specific problem. situation.
As
processes were
fulfill all
first
designed they were created to handle a
special cases arose, the original process
With each new exception another
twist or task
process and subsequently the process grew more complex. into a process
the
may
two
to handle that
was incorporated
into the
However, most of the inputs
continue to be that original simple case, yet
more complex process created
creation of
was modified
for the special cases.
The
it
must proceed through
solution
processes, one for the simple case, and another for the
may
lie
in the
more complex
cases
D.
RECOMMENDED READINGS The following readings provide
additional information
chapter:
47
on the topics covered
in this
Michael Hammer's book
The Reengineering Revolution (1995),
balanced perspective on using consultants during reengineering. not pull
many punches
As
provides
a
a consultant he does
in critiquing his colleagues.
For information on strategic planning or direction setting look for John Bryson's
book Strategic Planning for Public and Non-Profit Organizations: A Strengthening
and Sustaining Organizational Achievement,
For a more Service Process
in
Guide
to
(1995).
depth discussion of goals and performance measures consider the
Guidebook (1998) published by CAM-I.
This guidebook not only
provides instruction on the unique characteristics of service processes, but also includes a case study of the reengineering of the Marine Corps'
Copies are available from
CAM-I
Improving Performance:
How
(1995), by Geary
at
to
Resource Allocation Process.
(817) 860-1654. Alternatively, refer to Chapter 12 of
Manage
the White Space
on
the Organization Chart
Rummler and Alan Brache.
H.J. Harrington's book, Business Process Improvement{\99\), will furnish
some
additional information about the roles and responsibilities of the actors in reengineering.
48
PHASE
IV.
The purpose of
m
this
-
UNDERSTANDING THE OLD PROCESS
Chapter
is
to present a variety of
Some methods
effectiveness and efficiency of processes.
TQM,
perspectives to view the old process.
For
are direct descendants from
The
while others rely on software-based modeling.
methods to gauge the
tools provide a variety of
reason the application of one tool
this
By
provide insights that another tool failed to expose.
may
leveraging the strengths of the
improvement for use
different tools, ideally the user will identify opportunities for
in the
next phase, redesign.
A.
WHY ANALYZE THE OLD PROCESS The
surveyed recommended that a study of the present system be
literature
conducted before attempting to redesign the process (Harrington, 1991;
Champy, 1993, Davenport, 1993, Davis, 1994; cautions readers from spending too
Understanding your process those processes
is
is
Currid, 1994;
much time on
an essential
1995).
and
Hammer
analysis:
first step in
a destructive waste of time.
Hammer,
Hammer
reengineering, but an analysis of
You must
place
strict limits,
both on the
time you take to develop this understanding and on the length of description you create.
(Hammer, 1995,
Hammer
pp. 22)
reasons that
it
is
a waste of time to
process that will shortly be thrown away.
fill
up binders with information on a
Secondly, too
much
analysis might inhibit
change by crippling the imagination, whereby the reengineering team convinced that the process actually works.
He recommends
devoting about 4 to 6 weeks
on studying the current process focusing on what the process does, performs, and
why
it
does not perform
better.
may become
how
well or poorly
it
(Hammer, 1995)
Other authors are not as pessimistic on the value of analyzing the current process (Davis 1994, Harrington 1991, Davenport 1993).
49
They see the old process
as a
handy
example of
how
done and the mistakes previously made.
things have been
Davenport
(1993) presents four reasons for analyzing and documenting the current process:
1
Facilitates
communication among
participants.
Creates a
common
understanding of the existing structure. 2.
Documentation is an essential input to migration and implementation planning. It allows for an understanding of the magnitude of anticipated change and the tasks required to move from the current to a new process.
3.
Highlights problems in an existing process, thereby helping to ensure they are not repeated in the
4.
new
process.
Provides a baseline to measure the value of the proposed innovation. Given a process objective of reducing cycle time, for example, baselined data collection would need to include measurement of elapsed time for the current process.
The reengineering team should take the time For reengineering projects within the changes
in
information
systems,
to
DOD,
document the old process before redesign. especially projects
documentation
a
is
whose scope
prerequisite
for
requires
process
implementation (Davis, 1994).
B.
TOOLS FOR ANALYZING THE OLD PROCESS This section presents six tools, or methods, to view the current process: process
maps, flowcharts, Integration Definition for Function Modeling (IDEFO), Activity Based Costing (ABC), time-based measurement, and value-added assessment. presented
Each
tool
in a natural is
The
material
is
order with each tool building on the results of the previous ones.
discussed in sufficient depth for understanding the purpose for
However, due to the complexity of some of the tools instruction will be required before application.
(e.g.,
its
use.
IDEFO, ABC) additional
At the end of the chapter recommended
readings are listed for further explanation of each tool. 1.
Process
Maps
The process map documents
the sequence of events and steps in converting inputs
to outputs for a specific process (Rummler, 1995).
50
It is
a representation of the major
activities in
and decision points
producing a process
map
being used and introduce 1991).
Once completed
process (Davis, 1994). The reengineering team's efforts
will highlight areas
all
a picture
activities,
of
maps
the process
how
of the process where fuzzy procedures are
team members to the process being examined (Harrington,
communication, and to aid
facilitate
draw
in a
the process
are usually used as wall charts for reference, to
in
more robust modeling
is
currently operating, including inputs, customers,
pictorially displays the events in the
Take
without regard to the department or function performing the action. Figure 4-1, a simplified order fulfillment process
XYZ Corp
Order completed Start
at a fictional
"
will contain only the
what"
is
to
.
add
work
progresses.
Each sub-process may
showing additional
levels
Stop
Simplified Order Fulfillment Process
larger process.
also be broken
of detail. Showing
"
show the
down
into
how" something
Initially
the process
later the reengineering
The process map
done. Each rectangle can then be exploded to
sub-process.
example
Deliver Order
*>
broad-brush workings of the process,
detail as their
for
process
company XYZ.
Order Picked
Each rectangle represents a sub-process of the
will
is
Order Fulfillment Process
Process order
and submitted
Figure 4- 1
team
object
and the sequence of the process. (Rummler, 1994)
The simplest kind of process map
map
The
efforts.
pictorially describes
inner workings of that its
sub-sub-processes
(a process)
is
done
is
best
achieved using a flowchart. 2.
Flowcharts
The flowchart or a sub-process.
is
similar to a process
map
in that
However, the flowchart describes
decisions that are
made by
"
it
pictorially represents a process
how" something
is
done, that
is
the
users of the process and the sequence of actions taken.
(Harrington, 1991)
51
Flowcharts use standard geometric shapes for ease is
the flowchart for
XYZ
in
communication.
Corporation's process order sub-process.
Process Order sub-process into
tasks.
its
sub-processes and sub-sub-processes
is
breaks
down
The procedure of breaking processes down
known
Processing Customer Orders at
Order Entry Receives, Edits, an Enters Order from Field Offices
It
Figure 4-2 the into
as decomposition.
XYZ Corp
J
Inventory Analysis Review
Allocate Inventory to Order
Send Sales Order
to
Warehous
:
Figure 4-2. Flowchart for a sub-process.
From Euske and
A
more robust process diagram
interfunctional process
map.
known
is
In this type
perform each part of the process
is laid
Player, 1996.
as a process
deployment diagram or
of diagram the functions or workers
over the flowchart. In Figure 4-3 the workers
perform each step of the sub-process are indicated on the diagram.
who who
The same type of
diagram could also show the different functional departments working on the process
(Euske and Player, 1996).
52
Processing Customer Orders at
XYZ Corp
Order Entry
Order Entry
-*">».
Receives. Start
[
\—
Edits,
•^ ^\
and
Enters
Order
view
Customer
frorr
Field
Offices
Yes
Credit
