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Syllabus H. Innovation, Performance Excellence & Change Management H6. Managing Innovation And Change Management

H6c. Business Process Redesign

Business Process Redesign

Although this syllabus heading is referring to the current situation of a business (from the scenario in the exam) - obviously we can’t comment on that here but the following is needed when the processes aren’t working well currently, and a complete overhaul is needed

Business Process redesign is also called Business process Re-engineering (BPR)

Harmon recommends a 5 stage approach to this:

  1. Plan Identify goals, scope, personnel and plan

  2. Analysis Document workflow, identify problems

  3. Redesign Explore alternatives and choose best

  4. Development Redesign of jobs, products, hiring & firing, KPIs

  5. Transition Integrate, train, test, modify where needed

In the exam you may be asked to evaluate an existing process and make redesign suggestions - look out for..

  1. Are there any steps or gaps missing?

  2. Any duplication of work?

  3. Any no value added activities?

Process Re-design Patterns

These are simply solutions / approaches that have worked in the past..

  • Pattern What causes it? Description
    Re-engineering Major re-organisation Major redesign from scratch. High risk/return
    Simplification Duplication and unnecessary activities Checking each step in the process to check they’re needed. Low risk/return
    Value added analysis Non value adding activities Check each activity for what value it adds to the customer. Moderate returns
    Gaps and Disconnects Information flows not working Using process diagrams to see what needs to happen. Moderate returns

In the exam you need to decide if you think a complete redesign is needed or just an improvement on existing processes.

In doing so think about the pros and cons in terms of money, culture, effect of change etc

Process redesign and Strategy

As we have seen BPR involves improving the value chain and looks at existing processes to check they are operating according to our current strategy

  • This strategy, according to Norton and Kaplan’s Balanced Scorecard, is formulated from four different perspectives.

    1. Financial

    2. Customers

    3. Internal business processes

    4. Innovation and learning

  • Each of these 4 categories will have KPIs

    So BPR should be aimed at improving these KPIs and thus ensuring that they are following strategy