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Business Process Improvement
BPI methodology provides the technical procedures for implementing business process improvement in organizations.
Terms in this set (68)
The first wave of performance-improvement activities in the 1970s and 1980s was done to reduce error rates to parts-per-million level and maximize productivity in the product processes. The second wave of improvements have been directed to improving administrative processes.
is a logical, related, sequential (connected) set of activities that takes an input from a supplier, adds value to it, and produces an output to a customer.
is a process that usually involves more than one function within the organizational structure, and its operation has a significant impact on the way the organization functions.
is a portion of a major process that accomplishes a specific objective in support of the major process.
are things that go on with a process or subprocess. They are usually performed by units of one (one person or one department). All activity is usually documented in an instruction. The instruction will document the tasks that make up the activity.
are individual elements and/or subsets of an activity.
administrative business process
defined as a series of successive activities by which administrative tasks are performed.
is a technical or organizational facility/resource that makes it possible to perform a task, activity, or process. Ex of technical: include PC, copy equipment, voice response, decentralized data processing, etc. Ex of organizational enabler: communication, education, self-management, etc.
in 1990s we began to realize the need to learn that systems tie together improve the organization's total performance
is an assembly of components (hardware, software, procedures, human functions, and other resources) united by some form of regulated interaction to form an organized whole.
product business process improvement
is directed at improving the processes in producing a the delivered products or services.
administrative business process improvement
is directed at all of the support processes, such as new product development, order processing and accounts payable.
is any group, company, corporation, division, department, plant or sales office.
focusing on defining, understanding, and improving the activity flow within major processes.
reduction in cost, cycle time and error rates.
4 concepts of BPI
Fast Analysis Solution Technique (F.A.S.T.) used by IBM in mid
1980s. General Electric refined the approach in the 1990s. Ford further development under the name RAPET. E&Y calls it Express
focuses a group's attention on a single process for a one or two-day meeting to define how the group can improve the process over the next 90 days.
identifies the root causes and no value added activities. Typical purpose is reduction rate between 5 - 15% in 3 months. Improvements are identified and approved for implementation in 1 or 2 days.
8 phases of F.A.S.T.
1. problem identification
2. high-level sponsor support
3. FAST team
4. FAST team meetings
5. FAST team agreement
6. team presents findings to sponsor
7. sponsor approval of team's recommendation
8. solutions are implemented over next 3 months.
is systematic way to identify, and understand the organization's practices, designs, equipment, processes and products to improve the organization's real performance by studying how other organizations are performing the same or similar operations.
comparing a set of measurements to another set of measurements for similar.
typically reduce cost, cycle time and error rates between 20-50% and takes 4 - 6 months to design.
Process design focus
applied to processes that are working fair to well. typically process redesign projects will reduce costs, cycle time or error rates between 30-60% and takes between 80 - 100 days. Use with approximately 70 to 90% of major business processes.
Redesign Streamlining tools
1. Bureaucracy elimination
2. Value-added analysis
3. duplication elimination
4. Simplification methods
5. Cycle time reduction
6. Error proofing
7. process upgrading
8. simple language
10. supplier partnership
11. automation, and IT
applied after the present process activities have been optimized. IT and computerization bast practices are used to support optimum process. IT is a process enabler not a process driver.
is sometimes called process innovation because its success relies heavily on the process improvement team's innovation and creative abilities. this approach takes a fresh look at the objectives of the process and completely ignores the present process and organizational structure.
process reengineering focus
when applied reduces cost and cycle time between 60 - 90% and error rates between 40 -70% and used for 5 - 20% of the major processes within the organization. most costly, time consuming and high degree of risk.
process engineering approach
1. big picture analysis
2. theory of ones
3. process simulation
4. process modeling
big picture analysis
not constrained in its vision. activities must be in alignment with mission and strategy. reinforce the core capabilities and competencies. challenge other paradigms. understand direction and future of organization. think outside the box. challenge constraints and assumptions.
big picture vision statement
defines what must be done, not what is being done. 10 - 30 pages in length. in reality, it is a new process specification.
theory of ones
once the vision statement is done. define what must be done with the process cannot be done in once activity by one person. set the minimum quantity of units that you are trying to optimize. Ex: optimizing cycle time from 5 days to 1 sec. What enablers would have to be used? What paradigms would have to be discarded to accomplish this?
theory of ones enablers
1. process enabler
2. IT enabler
3. personnel enabler
4. organizational enabler
each enabler is reviewed and defined by their present state as well as reviewed to accomplished the desired outcome
is used to evaluate how the new process design will function. reinitiate the theory of ones activity to refine simulation for better results
once simulation model indicates that the design process will meet the vision statement, theoretical model is physically modeled to prove the concepts.
new process design modeling approach
1. conference room modeling
2. pilot modeling individual location or small part of the total organization.
3. pilot modeling entire process in a small part of the total organization
provide direct traceability from each task to organization's business plan and organization's critical success factor.
organizational change management
BPI approaches can cause more trouble than its worth if your organization does not manage the change process. it is a fallacy to think that you can change the processes without changing the behavior patterns or the people who are responsible for the operating these processes. this means identifying new behaviors and not rewarding old behaviors. must change performance standards.
we all must change to survive. we need to feel comfortable with change and learn a new way of getting our job done.
Change management tools and techniques
1. pain management
2. change mapping
role of IT in BPI
in 1970s and 1980s, information technology was seen as a process driver that reshaped business processes around the information technology programs and equipment, resulting in undelivered promises. in 1990s, information technology is used as a process enabler. organizations define and improve the process before applying technology to optimize the processes' total performance. this puts the responsibility in the hands of the line manager where it should be.
information management systems
1. information required for strategic, tactical and operational levels.
2. information quality requirements: relevance, reliability, presentation, and efficiency
3. information control requirements: procedures to generate reliable information.
1. executive management
2. project leader
3. subject matter experts
4. staff from adm, business, departments
1. responsible for the quality of the results of the entire project
2. authority to make decisions
project management team (PMT)
1. responsible for choosing the project objectives,
2. supervise the realization of the objectives,
3. managing the cost and time of the project,performs audits
4. distributing the information to the entire organization
5. installing and managing the PMT team
6. determines tasks and functions of the group
7. monitors progress
8. manages staff availability
9. tune the project to the daily operational activities
project leader (PMT)
1. delegates responsibilities
2. authors the project proposal
3. provides daily project direction
4. coordinate the PITs
5. instruct, train and guide PIT members
6. report to the PMT
7. posses both theoretical and practical experience
project improvement team (PIT)
sub-PIT is formed when more than 15 people or when the process being analyzed is located at many different locations. less extensive projects the PIT can be a subgroup of PMT. PIT member should be available to work FT on the project.
1. Charting the business process and documenting according to standards.
2. perform analysis, research and reporting results
3. draft proposal of best value and future state solution
4. involved in user requirements
when too many departments and managers are involved with the process, special contact groups are established.
1. supply information to PIT members
2. approving documentation of the business process
3. discussing and commenting on the analysis
4. discussing and commenting on the proposal
5. regulating and modifying to the existing process or introducing a newly developed process
objective is to make the project manageable. regularly scheduled project reviews, progress tracking, and desired results are according to expectations.
1. designing the project proposal
2. defining the details of the project
3. drawing up a project proposal
4. documenting the process
5. designing the project organizational change management plan
6. analyzing the processes
7. modifying the existing processes
8. integrating and evaluating modified or new setup process
proposal will contain the reasons for initiating the project and its objectives, to include an outline of the structure of the project, recommend a project leader and the makeup of the PIT. an external expert acts as the project advisor or as the project leader. the project proposal is written before the decisions about the project structure and phase objectives have been approved.
designing the project
in designing the project, the structure, methods, techniques and enablers that are to be used are defined. the structure is related to the creation and the composition of the PIT and any contact groups; a discussion of the time various staff members can spend on the project, meeting frequency and subjects to be discussed. techniques related to project objectives, discussion concerning the processes, analysis, and development.
defining the details of the project
Plan consists of 8 concrete steps
1. determine the documentation standards
2. determine the order of the approach and set priorities for documentation and analysis of the processes
3. determine who should perform the various activities
4. manage training and education
5. keep the departments and staff informed
6. introduce the project into the organization
7. draw up a detailed plan for the project
8. develop a project organizational change manage plan
during phase 1, the detail project plan will not be complete. the project plan will define what needs to done, when it should be done, and who will do it.
determine the documentation standards
1. describe the techniques.
2. an explanation of the symbols and a description of how the these symbols should be applied.
3. an example of the form that will be used with each technique.
4. description of the depth of detail that should be maintained (whether details should be defined at the subprocesses, activity or task level).
5. indication of the amount of information that should be recorded for each form.
6. instruction for completing the form
7. an example of a completed form
Each form is provided with a five-number code that represents:
a. the name of the project
b. the phase in which the document originates
c. the subject-matter number
d. the number of the order of the document within the subject matter
e. the version number
Each document should contain the date as well as the name of documenter.
manage training and education
it is important that all of the staff members speak the same language.
keep the departments and staff members informed
it is important that all of the individuals involved get information:
1. the structure of the project
2. the qualification of the other individuals involved
3. the time frame of the project
4. consequences of the time frame for the business, the structure of the organization, and their different tasks
5. the manner by which communication takes place
6. the reasons behind why they were selected
7. the extent to which others are involved in the decision-making process
it is essential that all those involved with the project have a good understanding of how the results of their work will impact the organization. this is done in one or more meetings.
introduction of the project to the organization
information on the objective, the structure, the qualifications of the different teams, the consequences of the project for the various organizational subdivisions and the extent to others are involved in the decision-making process. omission of a suitable introduction will result in resistance and disrupting the collection of information during the course of the project. in european organizations, the work council will be involved in distribution of the information to the organization.
develop an organizational change management plan
during phase 1, an organizational change management plan should be prepared that will define the change management related activities that should take place during phases 2 and phase 4.
detailed time plan
this plan documents the different activities, number of involved departments (per process) and the techniques that are going to be applied. for each process, the activity should be further developed, such as 1. gathering the basic materials, 2. examining the current procedures, 3. feedback . for each of these activities, a time estimate is calculated.
project phases (4)
1. organization phase
2. documentation phase
3. analysis phase
4. design phase
organizational change management (OCM) plan
the plan should be prepared in 3 parts to cover the periods when:
1. process is being redesigned (preparation)
2. best-value future-state solution (implementation)
3. after the BFSS has been (stabilization)
organizational change management
methodology developed to minimize the organization's inherent resistance to change. without an adequate understanding of enablers and barriers (people, process, or technology-related) transition plans will be less realistic and usable. the key is to involve the maximum number of people who are impacted by the change in the process of defining the change.
**A major part is implementing a data gathering process to identify reactions to the upcoming change. these reactions are then characterized as enablers or barriers to the change.
common implementation risks
1. cost of the status quo
2. vision clarity
3. sponsor commitment
4. change agent skills
5. change advocate identification and skills
6. changee response
7. culture/organizational alignment
8. internal/external organizational events
9. implementation architecture
10. improved performance
cost of the status quo
this is the cost related to today's process, plus additional costs if the process does not change (lost opportunities)
how clear is the definition of the best-vale future state at a strategic and tactical level? Are people, process, and technology requirements of the future state definced?
change agent skills
are they knowledgeable and experienced enough to address the human aspects of change management?
how resistant to the change are those individuals? how successful has the organization been in the past?
how consistent or inconsistent are the current reward, recognition, performance management, compensation, employment and communication mechanisms?
internal/external organizational events
how prepared is the organization to deal with economic turns, market shifts, regulatory changes, changes in leadership, downsizing? what events may occur in the near future and how might they affect the change?
how will the organization handle the surpluses (people, space, time, etc.) how will employees react to the way with which the surpluses?
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