Business Process Re-Design

1. Identify core business processes

A business process is a series of linked activities that create a service or a product of value to the customer.

2. Assess redesign opportunities in the following areas of each core business process:

  • Service quality
  • Cost
  • Work flow

3. Redesign the process.

Appoint a redesign team which would include:

  • Process insiders
  • Process outsiders (e.g., customers, information-technology specialists)
  • Document the process
  • Questions to ask in documenting the process:

Tools to be developed in documenting the process:

  • Process "maps"
  • Activity "dictionary" and work-distribution analysis (Identify the constituent activities of a business process -- the activity dictionary -- and measure the economic value of staff time expended on each activity)
  • Transaction volume and unit-cost analysis (Identify all transactions; sort transactions by type/dollar value; analyze work distribution by type of transaction; and analyze cost per completed transaction)

4. Identify process deficiencies

Questions to be asked in identifying deficiencies:

  • Are activities performed in a logical and efficient sequence?
  • Is the process characterized by frequent backlogs, delays, or errors?
  • Does the process satisfy customer needs?
  • Is the cost per completed transaction excessive?
  • Could activities be eliminated with the aid of technology?

Tools to be used to identify deficiencies:

  • Customer interviews
  • Value-added analysis (Value-added analysis distinguishes between activities that are truly essential from the customer's perspective and those that are not -- Could this activity be eliminated without affecting the form, use, or purpose of the final product or service from the customer's perspective? Is the cost of performing this activity justified by the value it creates for the customer? Could this activity be eliminated if some prior activity were done differently or correctly?)
  • Cost-of-quality analysis (Cost-of-quality analysis identifies the costs incurred to prevent, detect, and correct errors.)

5. Evaluate possible redesign strategies:

  • Eliminate duplicate activities
  • Combine related activities
  • Change the order of activities
  • Create multiple processes
  • Minimize hand-offs and data exchanges
  • Perform activities where it makes most sense
  • Let workers make decisions
  • Minimize reviews and approvals
  • Minimize reconciliation
  • Acquire/upgrade technology

6. Develop a schematic redesign that addresses the following questions:

What activities should be performed? In what sequence should they be performed? By whom should they be performed? What technologies would be required to achieve the planned reconfiguration of work flows and record flows? What improvements in cost, performance, and customer satisfaction would be realized by implementing the redesigned process?

Source: Stillwater Higher Education Group, MBIA & Associates Consulting, Inc., Armonk, New York.


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