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Organization & Markets

Advantages and Disadvantages of Business Process Reengineering

Supervisor: Submitted by: Period:

Prof. Dr. Breyer-Mayländer Tobias Kiefer (Matrikel-Nr.: 164282) Winter Semester 2003/2004

Organization & Markets

Business Process Reengineering

Table of Contents
1. Business Process 2. Business Process Improvement 3. Business Process Reengineering 3.1 Business Process Reengineering Formally Defined 3.2 Rethinking the Business Process 3.2.1 Combination of Jobs 3.2.2 Responsibility for the Workers 3.2.3 Delinearizing the Process 3.2.4 Multiple Versions of Processes 3.2.5 Reducing Checks and Controls 3.2.6 Additional Requirments 3.3 Advantages of BPR 3.3.1 Satisfaction 3.3.2 Growth of Knowledge 3.3.3 Solidarity to the Company 3.3.4 Demanding Jobs 3.3.5 Authority 3.4 Risks of Reengineering 3.4.1 Resistance to the change 3.4.2 Drawbacks to Business Process Reengineering 3.4.3 Higher Demands to the Workers References 4 5 7 8 9 10 11 11 12 12 13 14 14 14 14 14 15 15 16 16 16 18

Tobias Kiefer

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Organization & Markets

Business Process Reengineering

Table of Figures
Figure 1.1: Business Process Model Figure 2.1: Continous Process Improvement Model Figure 3.1: Business Process Reengineering Model 4 5 7

Tobias Kiefer

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Organization & Markets

Business Process Reengineering

1. Business Process
"If you have ever waited in line at the grocery store, you can appreciate the need for process improvement. In this case, the "process" is called the check-out process, and the purpose of the process is to pay for and bag your groceries. The process begins with you stepping into line, and ends with you receiving your receipt and leaving the store. You are the customer (you have the money and you have come to buy food), and the store is the supplier. The process steps are the activities that you and the store personnel do to complete the transaction. In this simple example, we have described a business process. Imagine other business processes: ordering clothes from mail order companies, requesting new telephone service from your telephone company, developing new products, administering the social security process, building a new home, etc. Business processes are simply a set of activities that transform a set of inputs into a set of outputs (goods or services) for another person or process using people and tools. We all do them, and at one time or another play the role of customer or supplier. You may see business processes pictured as a set of triangles as shown below. The purpose of this model is to define the supplier and process inputs, your process, and the customer and associated outputs. Also shown is the feedback loop from customers." [1] [Six Sigma Software, BPR Online Learning Center]

Figure 1.1: Business Process Model [Six Sigma Software, BPR Online Learning Center]

Tobias Kiefer

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Organization & Markets

Business Process Reengineering

2. Business Process Improvement
"Improving business processes is paramount for businesses to stay competitive in today's marketplace. Over the last 10 to 15 years companies have been forced to improve their business processes because we, as customers, are demanding better and better products and services. And if we do not receive what we want from one supplier, we have many others to choose from (hence the competitive issue for businesses). Many companies began business process improvement with a continuous improvement model. This model attempts to understand and measure the current process, and make performance improvements accordingly. The figure below illustrates the basic steps. You begin by documenting what you do today, establish some way to measure the process based on what the customers want, do the process, measure the results, and then identify improvement opportunities based on the data you collected. You then implement process improvements, and measure the performance of the new process. This loop repeats...
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