Business Process, Re - Engineering
Evolution of Organization and Management Concepts
Adam Smith
A Philosopher & economist
Concept – Division of Labor
Henry Ford
Concept – Dividing work into tiny, repeatable task
Alfred Sloan
Management process be divided into different functions
Henry Feyol
Management would be effective if business is planned
The Realities of the New Economy
Nothing is constant / Predictable including …
Market Growth Product life cycle
Customer Demand The rate and direction of technological change
The nature of competition
Evolution of Organization Structure
Various Organization Structure
Functional – Product – Matrix
Common characteristics
Structured on the basis of hierarchy
One Section – One function
Restricted decision making
Principle of span of control
Core communication channels
Decision making authority rests at the top
Each functional head fulfills the portion of operation allocated,
accomplishing the business operation
Advantages of Adam Smith’s decision of labor principle & Alfred
Sloan’s principle of management control & accountability.
Companies don’t have to bare people
Everyone in the process is accountable through the bureaucratic
chain of the command
The twenty first century organization
Would be difficult in structure, style & character
Structure would be flexible & responsive to customer need
Needs would be fulfilled about a higher speed
Would endeavor to meet the customer’s basic needs & psychological
expectations
Goal would be to maximize the value offered to the customer about the
least cost & a greatest speed
The organization will provide proper education, training, support &
reward, incorporating them in terms to produce value added
deliverables to the customer.
The business strategy for achieving customer delight therefore calls
for:
Careful choice of the market segment
Ascertaining the value system or profile of the customer in the
chosen segment
Designing the product or service to exceed all the value
expectations
Designing the related processes in such a way that new changes
are made quickly, in product or service and processes, so that
customer loyalty will be maintained, and business leadership
remains challenged.
Reengineering Defined
Re engineering is the fundamental rethinking and radical redesign of
business processes to achieve dramatic improvements in critical,
contemporary measures of performance, such as cost, quality, service
& speed.
The definition contains four key words.
Key Work 1 : Fundamental
Key Work 2 : Radical
Key Work 3 : Dramatic
Key Work 4 : Processes
Key Work 1 : Fundamental
People must ask the basic questions
Re engineering ignores – what is and concentrates on what should
be
Key Work 2 : Radical
Derived from Latin word – Radix means root
Radical redesigning – getting to the root of the things
Re engineering is business re invention and not …
Business improvement / enhancement / modification
Key Work 3 : Dramatic
Company falls 10 % short
If cost is come in 10 % too high
If the quality is 10 % too low
If the customer performance needs a 10 % boost,
Three kinds of companies that undertake re-engineering.
The companies that find themselves in deep trouble
o No choice
o The companies yet not in trouble but also the
management has the foresight to see trouble
coming
o These companies have the vision to begin reengineering
in advance of running into adversity.
Companies are in peak position
o No discernible difficulties
o Sees re engineering as an opportunity
No re engineering
required
o These companies have the vision to begin
Re engineering ignores – what is and concentrates on
Key Work 4 : Processes
Most important / frequent difficulty
Process : A series of activities that delivers value to a customer
Evolution of Organization and Management Concepts
Adam Smith
A Philosopher & economist
Concept – Division of Labor
Henry Ford
Concept – Dividing work into tiny, repeatable task
Alfred Sloan
Management process be divided into different functions
Henry Feyol
Management would be effective if business is planned
The Realities of the New Economy
Nothing is constant / Predictable including …
Market Growth Product life cycle
Customer Demand The rate and direction of technological change
The nature of competition
Evolution of Organization Structure
Various Organization Structure
Functional – Product – Matrix
Common characteristics
Structured on the basis of hierarchy
One Section – One function
Restricted decision making
Principle of span of control
Core communication channels
Decision making authority rests at the top
Each functional head fulfills the portion of operation allocated,
accomplishing the business operation
Advantages of Adam Smith’s decision of labor principle & Alfred
Sloan’s principle of management control & accountability.
Companies don’t have to bare people
Everyone in the process is accountable through the bureaucratic
chain of the command
The twenty first century organization
Would be difficult in structure, style & character
Structure would be flexible & responsive to customer need
Needs would be fulfilled about a higher speed
Would endeavor to meet the customer’s basic needs & psychological
expectations
Goal would be to maximize the value offered to the customer about the
least cost & a greatest speed
The organization will provide proper education, training, support &
reward, incorporating them in terms to produce value added
deliverables to the customer.
The business strategy for achieving customer delight therefore calls
for:
Careful choice of the market segment
Ascertaining the value system or profile of the customer in the
chosen segment
Designing the product or service to exceed all the value
expectations
Designing the related processes in such a way that new changes
are made quickly, in product or service and processes, so that
customer loyalty will be maintained, and business leadership
remains challenged.
Reengineering Defined
Re engineering is the fundamental rethinking and radical redesign of
business processes to achieve dramatic improvements in critical,
contemporary measures of performance, such as cost, quality, service
& speed.
The definition contains four key words.
Key Work 1 : Fundamental
Key Work 2 : Radical
Key Work 3 : Dramatic
Key Work 4 : Processes
Key Work 1 : Fundamental
People must ask the basic questions
Re engineering ignores – what is and concentrates on what should
be
Key Work 2 : Radical
Derived from Latin word – Radix means root
Radical redesigning – getting to the root of the things
Re engineering is business re invention and not …
Business improvement / enhancement / modification
Key Work 3 : Dramatic
Company falls 10 % short
If cost is come in 10 % too high
If the quality is 10 % too low
If the customer performance needs a 10 % boost,
Three kinds of companies that undertake re-engineering.
The companies that find themselves in deep trouble
o No choice
o The companies yet not in trouble but also the
management has the foresight to see trouble
coming
o These companies have the vision to begin reengineering
in advance of running into adversity.
Companies are in peak position
o No discernible difficulties
o Sees re engineering as an opportunity
No re engineering
required
o These companies have the vision to begin
Re engineering ignores – what is and concentrates on
Key Work 4 : Processes
Most important / frequent difficulty
Process : A series of activities that delivers value to a customer
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