Business Process Transformation - Spring 1997

Lecture 1- Overview of BPT

(Jim)

Why BPT ? (rather than BPR)

• less attached to particular methodologies
• allows consideration of other approaches

The Global Economic Environment

a driving force for organisational change

Globalisation

• removal of trade barriers - single global market
• competition from recently developed countries
• internationalisation of financial systems
• national governments have less choice

"Informatisation"

• businesses have come to depend more and more on information
• money is essentially a form of information
• provision of information becomes a business in itself
• increased the importance of information industries
• more difficult to find "undeveloped" resources to exploit
• this environment is that it has been created by ourselves

Sources of Current Business Problems

• foreign competition, recessions, new technology, hostile takeovers, unsympathetic bankers
• many businesses expand far too rapidly in boom times
• many businesses (eg airlines) rely on growth to replace obsolete capital equipment
• industries characterised by large long term investment in plant have cycles of fortune
• price competition forces prices down until profit reaches zero

Lack of Measurable IT Payoff

• return on investment for many IT projects is low or negative
• productivity in service industries has not improved.
• perception that IT is not paying its way

Some Leading Industries

• Rupert Murdoch
• DB Telkomm - using private network to provide public telecommunications service
• Pay TV?

Business Process Reengineering

(Kylie)

Concept Development

Davenport (& Short), Hammer, Champy

• Key paper, Davenport & Short, 1990
• Sloan Management Review
• Reengineering, Redesign, Innovation

Definition:

The fundamental rethinking and radical redesign of buiness processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service and speed (Hammer & Champy, 1993, p.32)

BPR Content

Discontinuous Thinking: Instead of asking how to perform a process better, BPR asks the question WHY?
Why does the organisation perform the process at all?

• Customer focus
• Process perspective
• Radical change
• Information technology
• Employee empowerment

           => Organisational Transformation

Organisational Changes (Hammer & Champy,1993)

• work units change - from functional departments to process teams
• jobs change - from simple tasks to multi-dimensional work
• people's roles change - from controlled to empowered
• job preparation changes - from training to education
• the focus of performance measures and compensation shifts - from activity to results
• advancement criteria change - from performance to ability
• values change - from protective to productive
• managers change - from supervisors to coaches
• organisational structures change - from hierarchical to flat
• executives change - from scorekeepers to leaders

BPR and Transformation

Definition: approach to radical, revolutionary change in the entire context of an organisational system. OT involves transformational changes in the fundamental nature of the organisation in relation to its ecosystem and requires completely new ways of thinking, behaving, and perceiveing by members of the organisation.(Fletcher,1990)

BPR within the context of transformation - promoted as a revolutionary, radical change approach that produces a more responsive organisation that is more capable of performing in the unstable, changing environments that organisations continue to be faced with

Transformational Scope of BPR (Earl, 1994)

Change	Quantum leap
Focus	Start again
Frequency	One shot
Scope	Broad, crossfunctional
Participation	Top-down
Risk & Rewards	High
Type of Change	Structure, culture, roles
Role of IT	Key enabler
Aids	Methods and tools

Extent of Transformation - The MIT90s framework (Scott-Morton, 1991)

BPR RHETORIC

Hammer claims that BPR can achieve:

• 7-day turnaround reduced to 4 hours
• staff involved in a process reduced by 75%
• time to production halved
• tooling and manufacturing costs reduced by 25%

BUT

• 70% failure rate

Most surveys of companies undertaking BPR suggest that it is less radical and produces less dramatic results than proponents

BPR is like TEENAGE SEX:

It's on everyone's mind all the time,

• Everyone talks about it all the time,
• Everyone thinks everyone else is doing it,
• Almost no one is really doing it,

The few who are doing it are:

• doing it poorly,
• not practicing it safely,
• sure it will be better next time.

(Mark Weiz, 1995)

About this Page

BPT Lecture 1, 8/8/97

Any questions or comments, just e-mail me.

This page is maintained by Jim Underwood who can be reached at jim@socs.uts.edu.au.
This page was last updated on November 11th, 1997.

http://linus.socs.uts.edu.au/~jim/bpt/s97l1.html