CPR on BPR: Practical Guidelines for Successful Business Process Analysis

CPR ON BPR: Long Live Business Process Reengineering

As mentioned in Part 1: A Primer, companies should never lead with technology when trying to solve business process problems. They should review their business goals and objectives, examine, and refine or replace business processes, and then, and only then, should they find the technology that matches their business goals, objectives, and processes, to support those processes. In this Part, we discuss some practical steps for actually performing business process analysis and fostering change in your company.

The Phased Approach 

I've practiced the art of BPR (Business Process Reengineering) in a phased approach, each with a set of deliverables, to show progress toward the ultimate goal of improving the customer experience, improving the daily work experience for your employees, increasing profits, or, preferably, all three.

• In Phase 0, both the BPR consultants and upper management meet and get familiar with each other.
  
  
• In Phase 1, the team building begins.
  
  
• In Phase 2, data about how things currently exist and how processes are currently conducted are collected.
  
  
• In Phase 3, you go through the re-design process, and document it.
  
  
• In Phase 4, technology needs are considered, the team goes through the technology selection process. Both new processes and new technologies are implemented and rolled out to the company.

Phase 0: "Why is Change So Important?" 

Key upper management team members who will be supporting the change process meet with the consultants. This is the getting to know each other step. In this Phase, the consultants needs to discover the following about the company:

• What industry are they in?
  
  
• What are their key differentiators?
  
  
• What is the corporate vision and corporate goals?
  
  
• How is the company organizationally structured to deliver to that vision and those goals? What, if any, technology solutions are in place to support the delivery of the businesses' products or services?
  
  
• How strong a need does upper management feel to change the way they do business? What do they see as "broken" that needs to be fixed?

The consultants also need to communicate some information, and establish that there is a real need for their work. They explain what reengineering is and isn't, and check the necessary conditions for their work; namely:

• Is there real pain, either current or anticipated? What is the pain? Are sales suffering? Has the company lost market share? Is quality declining? Is morale in the company low? Are processes taking too long? Are customers unhappy? Most change is pain driven, and pain creates a readiness for change.
  
  
• Will senior management be actively involved in the change process? This is crucial. "Indispensable" staff will feel threatened; departments will feel threatened. The very existence of an outside consulting force examining the company and pushing for change will induce fear and anxiety. Only the corporate leadership can deal with those who see it in their interest to resist change. An Advisory Group composed of senior management members will need to be established.
  
  
• Is there a strategy for major change? When employees see a need for change, when they believe a credible strategy is in place to foster the change, when they know not only what sacrifices need to be made but also what they will get in its place, and when they know they can be part of the change process, they can be very supportive. Without it, they won't be.

Phase 1: "Getting Organized"  

"To mobilize, organize, energize, and inform the people who will perform reengineering."

Step 1: Secure executive team buy-in and their corporate communication

As mentioned above, this is critical. The executive team must not only buy in to the notion of change, but they must be the ones communicating the need for change, and the steps that will be taken toward change. Outside consultants, lacking initial credibility, can't do this.

Step 2: Who will be part of the effort?

Process Improvement Team (PIT).

• A representative group of people who actually work in the process is essential. An information technology guru is needed. An outsider or "maverick" helps the team. This is usually a person who works in another area in the client organization. The maverick has the advantage of having no vested interest in the process and hence can be totally objective. The outside consultants often perform this role.

Step 3: How will the PIT be trained on BPR?

Acquaint the team with reengineering and the process. The consultants conduct formal training sessions to educate the PIT.

Step 4: How will the PIT be organized?

Start-up responsibilities include identifying subprocesses, determining where to start the reengineering process, developing challenge goals, and deciding which customers and employees to interview. A Project Champion will remove obstacles needs to be identified. Define project parameters regarding schedule, cost, and risk.

Phase 2: "Getting Data" 

Key Questions to be Answered:

• What are our major business processes?
  
  
• How do these processes interface with customer and supplier processes?
  
  
• What are our strategic, value-adding processes?
  
  
• Which processes should we reengineer within three months, six months, one year, and subsequently?
  
  
• What organizations and jobs are involved in the processes? What pieces of work are done by each job?
  
  
• What policies apply to the performance of the processes? In which piece of work does each policy apply?
  
  
• What technology is used in the processes? In which piece of the work is the technology used?

Step 1: Identifying the Processes to Redesign

Consider the following characteristics in choosing which processes to redesign:

• High customer requirement, but low performance (customers complain)
  
  
• Some things just take too long
  
  
• High cost of poor quality (errors, rework, mistakes, scrap)
  
  
• The company throws people at the problem, but things don't get better
  
  
• High internal frustration factor and low morale
  
  
• Process spans several functions and there is finger pointing and blaming
  
  
• Process is not being measured, high variability in output or results
  
  
• Excessive information exchange, data redundancy, and re-keying of data
  
  
• Inventory, buffers, and other assets sitting idle
  
  
• High ratio of checking and control to value adding
  
  
• Complexity, exceptions, and special cases
  
  
• No one is responsible for the process

Step 2: Customer Interviews

Who are your customers?

The customers of the process are interviewed to discover what they think of the current process, what they like about it and what they do not like about it. External customers, internal suppliers, and internal staff members who work in the process but are not part of the Process Improvement Team are also interviewed to get their ideas, comments and suggestions.

Step 3: Internal "As Is" flowcharting

Map the current processes in detail. Document: time, cost of poor quality, and where frustration occurs. The bottlenecks, delays, areas of poor quality and high frustration are ranked and prioritized.

As-Is Flowchart 

At each step in the flowchart, ask team members to identify their level of frustration experienced (H = high; M = medium; L = low). Write a brief description of what the frustration is so that you can go back and specifically redesign out those areas that are most troublesome.

Advantages to doing As-Is Flowcharts:

• People see the whole process, often for the first time
  
  
• Problem areas become easily visible
  
  
• People can vent about parts of the process that frustrate them
  
  
• People begin to offer improvement ideas after frustrations and problems are identified.
  
  
• The problems point to which process redesign principles are not being used
  
  
• Creates a shared understanding

This phase produces definitions of customers and their performance expectations, processes, and performance measures; identifies value-adding processes; produces process maps, and; designates and orders the processes to reengineer.

Phase 3: "Getting Reengineered" 

Step 1: First-cut Redesigns

Done with a clean sheet of paper. Ask: "If we were to invent this process today with what we know, what would it look like?" Looking for "out-of-the-box" thinking and innovative ideas.

Ask these four questions about the things you are doing:

• Is the customer willing to pay for this activity?
  
  
• Does it add to the quality of our product or service?
  
  
• Does it help us to respond faster to our customers?
  
  
• Does it help us use our resources (people and inventory) more effectively?

Step 2: Share first-cuts with Customer

Gather actionable feedback for new designs.

Step 3: Create second-cut Redesigns

These are based on the feedback from Step 2.

Step 4: Share second-cuts with Advisory Group and Staff

If there are controversial elements or major capital outlays, the Advisory Group (from the Executive Committee) needs to review and approve the plan.

Share redesign with the rest of the people that work within the process to get their ideas, comments, and suggestions.

Step 5: Final Redesigns and Technology Considerations

Document the final redesigns, which should include considerations for the type of technology that will be needed to support the new processes.

Phase 4: Beyond BPR: Getting the Technology and Implementing the Plan 

With the new business objectives and processes in hand, and technology requirements documented, enter the technology selection process. Typically, by working with consultants who are using a product like TEC's TESS, the selection list can quickly be limited to two or three vendors that come fairly close to your ideal solution. The technological gaps between your needs and each of the two or three solutions is documented, and then the vendors are brought in and asked to run their software through your business process scenarios to give you both a general feel for the software, and a truer understanding of their software's ability to deliver against your needs. Be sure to consider such key factors as:

• Vendor viability
  
  
• Vendor's ability to implement, on time and within budget, what they demonstrate
  
  
• Vendor's on-going support programs
  
  
• Vendor's costs: Initial, maintenance fees, and support fees

Interview past customers to understand their happiness with the software, the implementation process, and their on-going experience with the vendor.

Remember: You'll be laying out a lot of money on both the software and the implementation and rollout of the software (usually in a ratio of about 1 to 2 or 1 to 3, software to implementation). Take your time and be thorough.

Later articles in this series will address the steps of Implementation, Change Management, and On-going Continuous Improvement.

Final Thoughts 

This all sounds painful and difficult. It is. Don't let anyone fool you. But often, process and technology changes become essential to not only the success but the very existence of companies as their competitors progress and improve rapidly. Undertake the work with determination and enthusiasm for the health of the company, and keep focused. This kind of work is always beyond the defined job descriptions of anyone in the company. Make this work a measurable (and rewarded) part of the participants' work, and document and publicize successes. Everyone will feel good about the changes.