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:
Plan Identify goals, scope, personnel and plan
Analysis Document workflow, identify problems
Redesign Explore alternatives and choose best
Development Redesign of jobs, products, hiring & firing, KPIs
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..
Are there any steps or gaps missing?
Any duplication of work?
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.
Internal business processes
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