BUSINESS PROCESS REENGINNERING MODULE 4

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Unit IV: Big R Small-r reengineering-Role of BPR in ERP implementations-Business Process
Visualization-simulation-prototyping-transition and change management for the new process
implementation-Role of training in change-BPR is not downsizing-Business Process audit.
Little’s Law
Little's result, theorem, lemma, law or formula is a theorem by John Little which states:
The long-term average number of customers in a stable system L is equal to the long-term average
effective arrival rate, λ, multiplied by the average time a customer spends in the system, W; or
expressed algebraically:
L = λW.
Role of BPR in ERP implementations
 BPR and ERP Implementation
Enterprise resource planning (ERP) is business process management software that allows an
organization to use a system of integrated applications to manage the business and automate many back
office functions related to technology, services and human resources.
ERP software typically integrates all facets of an operation — including product planning,
development, manufacturing, sales and marketing — in a single database, application and user interface
ERP software ( benefits):
 boosts efficiencies by automating data collection;
 enables business growth by managing increasingly complex business processes;
 helps lower risk by enabling better compliance;
 fosters collaboration using data sharing and integrated information;
 provides better business intelligence and customer service capabilities; and
 Improves supply chain management.
 Processes, organization, structure and information technologies are the key components of BPR, which
automates business processes across the enterprise and provides an organization with a well-designed
and well-managed information system. While implementing ERP, the organizations have two options
to consider.
 Either the organization must reengineer business processes before implementing ERP or directly
implement ERP and avoid reengineering.
 In the first option of reengineering business processes, before implementing ERP, the organization
needs to analyze current processes, identify non-value adding activities and redesign the process to
create value for the customer, and then develop in-house applications or modify an ERP system
package to suit the organizations requirements. In this case, employees will develop a good sense of
process orientation and ownership.
 The second option of implementing ERP package is to adopt ERP with minimum deviation from the
standard settings. All the processes in a company should conform to the ERP model and the
organization has to change its current work practices and switch over to what the ERP system offers.
This approach of implementation offers a world-class efficient and effective process with built-in
measures and controls, and is likely to be quickly installed.

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ERP-driven BPR can more easily design process change; companies that consider BPR in ERP system
will have better implementation performance.
ERP-driven BPR, requires that the existing processes be aligned with the software, a
step-by-step implementation plan through cross-functional BPR implementation 577 coordination, and
addressing issues relating to employee training and culture. Most ERP systems such as SAP, Oracle,
Peoplesoft, and JD Edwards provide functionality for almost all vital business functions in any industry
and in combination with internet/telecommunications, are capable of covering any business network.
With ERP-driven BPR it is easier for management to offer a realistic preview of the
expected outcomes, possible changes in the design and scope of the project, and to guard against
unrealistic worker expectations.
BP Visualization
This is an analogue to process mining, which allows for the identification of exceptions, variances and
work-arounds. The old saw in process modeling circles is that there are three state of the process
model: As-Is, To-Be, and How It’s Really Done.
This visualization capability provides a lens into the latter, using a Microsoft Visio add-in for
presenting the process model. The metrics and performance data are captured in the workforce and
application monitoring tools, providing a comprehensive perspective across all work being performed,
across all identified applications. Thus this becomes a very powerful tool for optimizing work and
processes from a truly end-to-end perspective, not simply limited to a discrete process model within a
traditional BPM or workflow management solution.
The basis for business process visualization is to find an adequate approach for
layouting process graphs. Doing so one has to preserve potentially existing process meta model
properties (e.g., information about the structuring of related process models) and existing layout
information. This step is then followed by layouting the whole business process using the graphical
notion of the canonical meta model. Thereby the challenges are to (1) find an algorithm for layouting
business processes graphs, (2) exploit the particular semantics of the different process elements, and (3)
use available meta model properties and already existing layout information in order to optimize the
process layout algorithm
BP Simulation
Business process simulation is an instrument for the analysis of business processes. It is used to assess
the dynamic behaviour of processes over time, i.e. the development of process and resource
performance in reaction to changes or fluctuations of certain environment or system parameters. The
results provide insights supporting decisions in process design or resource provision with the goal to
improve factors such as process performance, process and product quality, customer satisfaction or
resource utilization.
Business process simulation is the analysis and experimentation of a business processes in a
virtual environment without all the risks and problems that can arise by testing something in a live
environment.

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With a simulated environment, there are no risks of a process crashing and halting
productivity in the office. With business process simulation, you‟re assured of having a stable
environment where you can work with different ideas and implementations to see what sticks and what
doesn‟t. Using business process simulation, you can even work on radical new ideas that haven‟t been
tested before to see if they make a meaningful benefit to the process that you‟re working on.
Business process simulation plays an important role in the continuous improvement
approach to business process management (BPM). By running business process simulations,
companies can predict how business processes perform under specific conditions. Simulations can
also be used to test process design, measure performance, identify bottlenecks and test changes.
Ultimately, process simulation can identify the most effective process flow and help prevent problems
from cropping up during process execution. Simulation models can be very simple or highly complex.
 Definition of Input for Business Process Simulation
The input for business process simulation, the simulation model, typically comprises information about
process flow, resources and process instantiation.
The process flow defines the time-based and logical order of function execution. Further information is
added in order to define the behaviour of decision points or loops in the flow during simulation. In
addition the time spent for the execution of each function is specified.
 When Should You Apply Business Process Simulation?
Business process simulation is the ideal path when:
 You want to significantly change a process, but don‟t know the results
 You are working with a mission-critical process that can‟t be stopped
 You want real data on how a process might perform in a certain condition
 Steps in Business Process Simulation
1. Decide on the metrics you will use to evaluate. Do you hope the new process is faster? Saves
money? Results in fewer errors? Collect specific data on the existing process.
2. Select a business process modeling tool. Choose one that has an easy drag-and-drop interface and
doesn‟t require any complex coding.
3. Design the improved process. Make the necessary changes to your existing process and create the
optimal solution.
4. Run the business process simulation. Collect all the necessary data to prove your hypothesis.
5. Decide what to implement in the new process. Make any changes to your existing process based on
the results.

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 Benefits of Business Process Simulation
1. Use Virtual Resources
In a virtual environment, you‟re not limited by the number of staff and resources to test and develop
something. Using a simulated environment helps you overcome these challenges and see which
processes and ideas work and which don‟t, using the virtual resources at hand.
2. Experiment With Different Ideas
You can define your own input variables to test the process and see how it would perform under a
variety of conditions. Using this data, you can change the parameters of the model, or even the model
as a whole, to suit your requirements. This way, you can test out different ideas and models, helping
you build a truly robust process that can perform under a variety of conditions.
3. Find Mistakes Before They Happen
Another benefit of business process simulation modeling is the fact that you can debug your processes
in a virtual environment. This way, you‟re ensuring that you‟re fixing all the bugs before the process
goes live, which is infinitely better than finding bugs when the process is live.
4. Real Results or Not?
Within your team, there can be a number of ideas that everyone wants to implement. But even if they
sound good on paper, there‟s no guarantee that they‟ll provide real world benefits. Business process
simulation is a great way to try out new ideas to see if they actually deliver the results that they‟re
promising. If they are, you can take it to the test stage of development. If they don‟t, you can either find
out what‟s wrong and fix it, or drop the process entirely.
This method of checking for results before the process is even on the floor can help businesses cushion
or prevent any impact inefficient processes could have on actual productivity.
5. Cheaper Design Costs
Using business process simulation modeling, you can root out inefficient models and processes from
the design stage. This saves a lot of time that would otherwise be spent in developing an inefficient
model. Business process simulation ensures that you‟re only spending money developing a model that
can actually give you real world benefits.
6. Testing Improvements Are Easier
If you have an existing process model and all you really want to do is ensure that it‟s improved or
scaled up to your current operations, process simulation is a good way to see which improvements
work and which don‟t, without having to tamper with an already live process.

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BP Prototyping
A prototype is an early sample, model, or release of a product built to test a concept or
process or to act as a thing to be replicated or learned from. It is a term used in a variety of contexts,
including semantics, design, electronics, and software programming. A prototype is generally used to
evaluate a new design to enhance precision by system analysts and users Prototyping serves to provide
specifications for a real, working system rather than a theoretical one. In some design workflow
models, creating a prototype (a process sometimes called materialization) is the step between
the formalization and the evaluation of an idea.
Business prototypes help you to effectively capture your knowledge and understanding about your
enterprise, your value network and the markets you operate in. A business prototype is a concrete and
explicit representation of (a part of) your enterprise as seen by those people who wish to use the
prototype to understand, to transform and to control that part of reality. Depending on the situation,
business prototypes can be simple sketches created on a white-board or more elaborate visual models
and simulations created using a computer.
Prototypes provide an inexpensive, risk-free environment and allow you to perform controlled,
repeatable experiments to deal with uncertainty and risk and explore the consequences of decisions and
actions that are too expensive, dangerous or unethical to take into the real world.
The main purpose of prototyping is to establish that the requirements for a process in a reengineered
organization are sound. The prototype relates to the software system that is to support the process.
BP Transition
Transition and change management for the new process implementation
Change is the shift in the external situation; the thing that has changed. It can happen fast.
Transition is the reorientation people need to make in response to the change. This can take time.
To be successful in both the implementation and in helping people we need to manage both the change and

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the transition. A transition management plan is a necessary component of a change management plan and
presumes that the underlying change is being well managed.
The process of Transition Management involves the implementation of change
through systematic planning, organizing and implementation of change to reach the desirable future state
without affecting the continuity of business during the process of change. The process of transition
management begins much before the actual change occurs and the members of the senior management play
the role of transition managers who support the change agent in the overall process of change. During the
entire process of transition, effective communication with all the key stakeholders directly or indirectly
involved in the process plays a vital role.
Buchanan & Mc Calman (1989) proposed a framework on „Perpetual Transition
Management‟, which provides crucial insights regarding what triggers organizational change and also the
response of the organizations towards the change. The model proposes four key layers and the interlocking
management processes which bring change in an organization. These are:
1. Trigger Layer: This layer is concerned with the need identification and also the avenues for change
are created deliberately and introduced as opportunities instead of threats or any crisis.
2. Vision Layer: This layer involves articulation of the futuristic vision of the organization and
communicating this effectively in terms of the directional strategies and the road map of action for
the organization.
3. Conversion Layer: Mobilizing support for the realization of vision can be the most efficient
approach for handling the triggers of change.
4. Maintenance & Renewal: This involves bringing reforms or change in the values, attitudes and
behaviors for realizing the sustained advantages of change.
The Perceptual Transition Model
The above model implies that for any change to be successful, effective planning, resources management,
communication of the outcomes of change and a large-scale involvement of the management will be
required in connection with the four interlocking processes or layers.

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While analyzing the Trigger Layer, it is important to understand what is actually creating the need for
change. It must involve clear expression and communication of the objectives of change across all the levels
in an organization. In the absence of effective communication and due to poor trigger identification, people
usually tend to misunderstand or develop bias towards the change and try to keep away from the process due
to a perceived fear of failure. Hence, both acceptance of change by understanding its nuances correctly and
acknowledgement of the need for change actually play a crucial role in the entire process. The manner in
which these triggers are communicated and expressed clearly so that everyone develops a shared
understanding of the opportunities, threats, risks, etc, will ultimately define the success of change in an
organization.
Just like shared understanding and identification of the triggers of change help in ensuring seamless process
transition, description and understanding of the vision of the organization equally, play a crucial role in
determining the success of the overall process. The management must consider three criterions for deciding
regarding the vision or future. Firstly, the change should provide a response to all the events which trigger
change. Secondly, it involves the identification of a desirable futuristic condition of an organization
involving the design, goals and products. Thirdly, it must involve stimulation and challenges.
The third Layer of conversion involves recruiting disciples and establishing the structures or needed
systems and processes in place. This process may be time-consuming as it is detailed in its approach and
the members involved in the process of change need to own the entire process. The managers firstly form a
Planning team who are responsible for the overall process of change and secondly pay a lot of importance to
the talking to people about the change in formal and informal setups in every given opportunity.
The last layer Maintenance and Renewal attempt to resolve the issues related to decay in connection with
the management during a mid-term change.
The Three Components of Transition as per Ogilvie
1. Endings: Letting go off the past or accepting the changed processes or behaviours.
2. Transitions: The in-between stage which involves a lot of confusion, ambiguities or a state of
neutrality.
3. New Beginnings: Moving forward once again and focusing the energies on constructively dealing
with the change.
Ending (3 D’s): This stage may be extremely painful, and it may involve multiple reactions:
Disengagement: This is the phase during which people tend to disconnect themselves from the situation and
grieve for whatever was left behind in the past.
Dis-Identification: This may be expressed by the people in the form of identity crisis/clash as a result of the
uncertainties involved in the process.
Disenchantment: This is the stage during which people usually don‟t find any meaning or relevance due to
the identity clash or change which has taken place.

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Transition (3 D’s): Before accepting the new methods or practices, people usually face the stages of
transition which may involve the following reactions:
Disorientation: It is the stage of neutrality where the old processes no longer exist, and the new is yet to
happen.
Disintegration: This is the stage during which some people accept that the old processes no longer exist and
they have to cope up with the changes. While, it is hard or difficult for few to get along with the change or
transition which they usually express in the form of resistance or inhibitions.
Discovery: This is the stage during which over a period of time people start to discover the realities and
work in accordance with the changing circumstances.
Beginning (3 I’s): This is the stage of Recovering and starting once again
Inner Realignment: After discovering the realities, the individuals adopt new plans and objectives, establish
new priorities or goals for the future and try to develop an understanding of their new roles and its
importance in an organization.
Investment: It is the stage during which individuals focus on reinvesting their energies to new methods and
processes.
Internal Equilibrium: The individual‟s try to attain a new state of equilibrium by adapting with the change.
Role of training in change
3 reasons why corporate training is essential in the change management process are:
1. Training increases the rate of change management success.
2. Training helps maintain visibility and encourage belonging.
3. Training promotes employee engagement.
BPR is not downsizing
Downsizing is one of the factors which influence BPR.
Downsizing:
Also known as right sizing or man power rationalization, downsizing in considered as the
shortest route to cut costs. Employees in many organizations work under the threat of losing their jobs any
time owing to the management policy of downsizing. Because of this feeling of insecurity, their productivity
in affected.
The impact of downsizing on the financial performance of a firm is temporary because it cannot go on
reducing its manpower forever. Besides, the image of the firm in the market may suffer and when there is a
need to increase man power, competent people may hesitate to join such firms.
When an organisation is going through a bad patch, instead of downsizing, the top
management should consider reengineering. A few key processes can be identified and reengineered to

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reduce the costs. The implementation of the reengineered process may be quite inexpensive, thereby
eliminating the need for downsizing. Usually reengineering should precede downsizing.
BP Audit
A business process audit is a formal and technical way to derive and assess whether the company is
managing its business processes, taking into account:
 The strategic objectives of the organization.
 The specific goals.
 Suitable procedures.
Also, one must make sure that:
 The performance of processes is within the desired standards.
 Controls are suitable for the correct measurement of processes.
 The procedures are suitable to achieve the desired levels of efficiency and effectiveness.
As it turns out, a business process audit is a warning that the administration should take action if
necessary and at the same time, a guarantee that the work is being done right, when the auditors verify
it.
The audit process has become a necessary element for most large corporations to remain competitive
with the competition, ensuring the delivery of expected value to customers and business sustainability.
 Business process audit benefits
 Risk analysis and contingency procedures.
 It promotes more transparency and corporate governance.
 Verification of controls used and their suitability to the business.

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 To verify how often the defined procedures and practices are adequate.
 Provide information for decision making on improvements and changes in processes.
A business process audit should be seen as an aid element that supports managers, bringing benefits
such as always having current and reliable information on how the processes are running and
performing.
 Business process audit objectives
The objectives are many and varied, but we can highlight some of them:
 The elimination of anomalies.
 To be following the goals and objectives set by senior management.
 The encouraging continuous improvement.
 Risk Control.
 The definition of contingency plans.
 Suggestions for improvements.
 Solidifying the “process culture” in the company.
 Best management practices.
 More data for decision-making by leaders.
 Enables the proper training of employees.
 IT resources assessment being used.
 Safer and more reliable information.
 Increased productivity.
 Adequacy of physical and structural resources for the tasks.
 More transparency.

BUSINESS PROCESS REENGINNERING MODULE 4

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BUSINESS PROCESS REENGINNERING MODULE 4