business process reengineering

 What is Business Process Reengineering

“Business Reengineering 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, and speed” – Michael Hammer and James Champy

Business process reengineering is an approach used to improve organizational performance by increasing the efficiency and effectiveness of processes that exist across the organization.  In addition to the redesigning of business processes, it also involves the redesigning of associated systems and organizational structures. 

Usually, reasons like new market opportunities, increasing competition, poor financial performance, and decreasing market share trigger the need for a business process transformation. 

BPR involves the analysis and transformation of several major components of a business. These include,

• Strategy
• Organization
• Process
• Technology
• Culture

BPR includes three phases; analysis phase, design phase, and implementation phase. It is also referred to as business process redesign, business process change management, and business transformation.

Benefits of Business Process Reengineering

BPR plays a major role in organizational performance improvement in terms of cost, quality, delivery, employee productivity, etc. It also helps

• Streamline business processes and systems 
• Companies easily adapt to changing times and reduce operating expenses
• Improve company profitability and sustain competitive advantage
• Boost employee productivity 
• Increase customer satisfaction by improving the quality of products and services

Principles of Business Process Reengineering

Following are the 7 principles of reengineering proposed by Michael Hammer and James Champy

1. Organize around outcomes, not tasks.
2. Identify all the organization’s processes and prioritize them in order of redesign urgency
3. Integrate information processing work into the real work that produces the information
4. Treat geographically dispersed resources as though they were centralized
5. Link Parallel activities in the workflow instead of just integrating their results
6. Put the decision point where the work is performed, and build control into the process
7. Capture information once and at the source

BPR Implementation | Business Process Reengineering Steps

Reengineering a process focuses on redesigning a process as a whole which includes fundamentally rethinking how the organizational work should be done in order to achieve dramatic improvement. That’s what differentiates BPR from process improvement which only focuses on functional or incremental improvement. 

Reengineering might not be appropriate in all situations, especially if your processes only require optimization and if your organization is not looking to undergo dramatic change. In such a case, you can opt for a process improvement technique.

Step 1: Set the vision and business goals 

This is where the senior management needs to identify the business situation; customer expectations, competition, opportunities, etc.

This will make it easier to understand the need for change and create a clear vision of where the company needs to be in the future. Then clarify the objectives in both qualitative and quantitative terms. 

Step 2: Establish a competent team

The team you select needs to be cross-functional because expertise and perceptions from all levels of the organization are necessary to minimize the chances of failure. 

It should be the responsibility of the top management to have a clear vision of the activities that need to be carried out and provide strategic direction. You also need to have an operational manager who knows the ins and outs of the processes. It is equally important to have the right engineers with different expertise from various fields to make the team complete. 

At this stage, it is important to have the goals and strategies outlined properly. You can also carry out surveys and benchmarking activities to identify customer needs and analyze the competition.   

In this step, it’s also necessary to communicate the business case for change and the objectives of the project to the rest of the employees. This will encourage their feedback as well and help them get ready for what’s to come.  

Step 3: Understand the current process

In this step, you need to select the process(es) that you will be redesigning. Such processes that are broken, cross-functional, value-adding, have bottlenecks or have high-impact on the organization, etc. can be prioritized. 

Step 4: Redesign the process

Keeping your vision in mind, redesign a new process that effectively overcomes the inefficiencies of the previous process. Here you will create a future-state map that highlights the solutions you have identified for the issues of the current state process. 

Step 5: Implement the reengineered process

Once the process has been redesigned, you can run a small test to see how it works by monitoring with the KPIs you have defined earlier. This will allow you to make necessary adjustments to the process before implementing it company-wide. If the new process works better than the current one, you can implement it on a larger scale.

BPR Methodologies

There are several business process reengineering methodologies out there, and we have listed some of them below, along with the steps. They highlight more ways of reengineering business processes in addition to what we have discussed above. 

Hammer/Champy Methodology

The methodology introduced by Hammer and Champy popularized business process reengineering. It involves six steps. 

Step 1: The CEO who initiates the reengineering process should introduce it to the employees by explaining the current situation of the company and his/her future vision for the company. 

Step 2: Identify business processes in terms of how they interact within the company and in relation to the outside world. Here process maps can be used to visualize the processes. 

Step 3: Select the processes that have the potential to bring value to the company once reengineered and those that are easy to be reengineered. 

Step 4: Analyze the current performance of the processes as opposed to what is expected from them in the future. 

Step 5: Redesign the selected business process using creativity, lateral thinking and imagination. 

Step 6: Implement the redesigned processes. 

The Davenport Methodology

Davenport puts information technology at the heart of business reengineering. The Davenport model covers six steps.

Step 1: Develop business vision and process objectives.

Step 2: Identify the business processes that should be reengineered. Davenport advises selecting not more than 15 processes at a time. 

Step 3: Understand the functioning and performance of the selected processes. And set up performance benchmarks for the reengineered processes. 

Step 4: Study how information technology tools and applications can be applied to the newly designed business processes. 

Step 5: Design a functioning prototype of the new business process. Allow the team to study the prototype and identify areas for improvement. 

Step 6: Implement the tested prototype across the organization. 

Manganelli/ Klein Methodology

Manganelli and Klein state only to focus on those business processes that are crucial to the strategic goals of the company and customer requirements.

Step 1: Ask everyone involved to define goals and prepare for the business reengineering project. 

Step 2: Select the key business processes for redesign

Step 3: Study the current performance of the selected processes and determine the future performance that you want to achieve.

Step 4: Develop information technology design to support new processes. And design new work environments for the people. 

Step 5: Implement the redesigned processes and the new work environments within the organization. 

Kodak Methodology

Developed by the international Kodak organization, the Kodak methodology is applied across all Kodak facilities worldwide. 

Step 1: Plan the process reengineering project and define all project administration rules and procedures.

Step 2: Bring together your project team,  assign project managers, and design a comprehensive process model for the organization.

Step 3: Redesign the selected processes. This step should conclude with a plan of a Pilot Implementation of the redesigned processes.

Step 4: Implement the newly designed processes across the organization. Adjust the organization’s infrastructure to the requirements of the new processes. 

Step 5: The last step is performed parallel to the other steps. Here the project team should find ways to deal with the obstacles that may occur during the reengineering project. 

Mobile app

 A mobile app is a computer program designed to run on smartphones, tablet computers and other mobile devices.

Apps are usually available through application distribution platform, which began appearing in 2008 and are typically operated by the owner of the mobile operating system, such as the Apple App Store, Google Play, Windows Phone Store, and BlackBerry App World. Some apps are free, while others must be bought. Usually, they are downloaded from the platform to a target device, but sometimes they can be downloaded to laptops or desktop computers. For apps with a price, generally a percentage, 20-30%, goes to the distribution provider (such as iTunes), and the rest goes to the producer of the app.^[1] The same app can therefore cost the average Smartphone user a different price depending on whether they use iPhone, Android, or BlackBerry 10 devices.

Encryption and Decryption

Encryption:

 In cryptography, encryption is the process of encoding messages or information in such a way that only authorized parties can read it.^[1] Encryption does not of itself prevent interception, but denies the message content to the interceptor.^[2]:374 In an encryption scheme, the message or information, referred to as plaintext, is encrypted using an encryption algorithm, generating ciphertext that can only be read if decrypted.^[2] For technical reasons, an encryption scheme usually uses a pseudo-random encryption key generated by an algorithm. It is in principle possible to decrypt the message without possessing the key, but, for a well-designed encryption scheme, large computational resources and skill are required. An authorized recipient can easily decrypt the message with the key provided by the originator to recipients, but not to unauthorised interceptors.

Decryption is the process of converting encrypted data back into its original form, so it can be understood. Encryption and decryption should not be confused with encoding and decoding, in which data is converted from one form to another but is not deliberately altered so as to conceal its content. Decryption is generally the reverse process of encryption. It is the process of decoding the data which has been encrypted into a secret format. An authorized user can only decrypt data because decryption requires a secret key or password.

 

 

Microprocessor

 A microprocessor is a computer processor that incorporates the functions of a computer's central processing unit (CPU) on a single integrated circuit (IC),^[1] or at most a few integrated circuits.^[2] The microprocessor is a multipurpose, programmable device that accepts digital data as input, processes it according to instructions stored in its memory, and provides results as output. It is an example of sequential digital logic, as it has internal memory. Microprocessors operate on numbers and symbols represented in the binary numeral system. The integration of a whole CPU onto a single chip or on a few chips greatly reduced the cost of processing power. The integrated circuit processor was produced in large numbers by highly automated processes, so unit cost was low. Single-chip processors increase reliability as there are many fewer electrical connections to fail. As microprocessor designs get faster, the cost of manufacturing a chip (with smaller components built on a semiconductor chip the same size) generally stays the same.

Application package

 Bundle of two or more computer programs that together address a specific business need. For example, an 'illustration package' might include a drawing program, photograph manipulation program, page setting program, and a color matching and output control (printing) program.

Application packaging may refer to:

• Creation of computer program installations that allow software to be installed across multiple computers
• Operations performed by software bundle management systems in cloud computing environments

Application Package/Software is a set of programs to carry out operations for a specific application. For example, payroll

is an application software for an organization to produce pay slips as an output. Application software is useful for word processing, billing system, accounting, producing statistical report, analysis of numerous data in research, weather forecasting, etc. In later modules you will learn about MS WORD, Lotus 1-2-3 and dBASE III Plus. All these are application software.

Another  example  of  application  Package/Software  is  programming  language.  Among  the  programming  languages

COBOL (Common Business Oriented Language) is more suitable for business application whereas FORTRAN (Formula

Translation) is useful for scientific application. We will discuss about languages in next section.

Intranet

 An intranet is a private network, accessible only to an organisation's staff.^[1][2] Generally a wide range of information and services from the organisation's internal IT systems are available from this that would not be available from the outside, and one company-wide intranet can constitute an important focal point of internal communication and collaboration, and provide a single starting point to access internal and external resources.

Intranets began to appear in a range of larger organizations from 1994.^[1] The launch of the a free webserver from Microsoft in 1996 helped make the technology accessible to a wider market.^[3]

 

extranet

 An extranet is a website that allows controlled access to partners, vendors and suppliers or an authorised set of customers - normally to a subset of the information accessible from an organization's intranet. An extranet is similar to a DMZ in that it provides access to needed services for authorised parties, without granting access to an organization's entire network.

Historically the term was occasionally also used in the sense of an two organisation sharing their internal networks over a VPN[1]

Any Branch Banking

 Engaging in banking activities such as accepting deposits or making loans at facilities away from a bank's home office. Branch banking has gone through significant changes since the 1980s in response to a more competitive nationwide financial services market. Financial innovation such as internet banking will greatly influence the future of branch banking by potentially reducing the need to maintain extensive branch networks to service consumers.

DEFINITION of 'Branch Banking' Engaging in banking activities such as accepting deposits or making loans at facilities away from a bank's home office. Branch banking has gone through significant changes since the 1980s in response to a more competitive nationwide financial services market.

Spyware

 Spyware is software that aims to gather information about a person or organization without their knowledge and that may send such information to another entity without the consumer's consent, or that asserts control over a computer without the consumer's knowledge.^[1]

"Spyware" is mostly classified into four types: system monitors, trojans, adware, and tracking cookies.^[2] Spyware is mostly used for the purposes of tracking and storing Internet users' movements on the Web and serving up pop-up ads to Internet users.

Whenever spyware is used for malicious purposes, its presence is typically hidden from the user and can be difficult to detect. Some spyware, such as keyloggers, may be installed by the owner of a shared, corporate, or public computer intentionally in order to monitor users.

 

SPAM

 Electronic spamming is the use of electronic messaging systems to send unsolicited messages (spam), especially advertising, as well as sending messages repeatedly on the same site. While the most widely recognized form of spam is email spam, the term is applied to similar abuses in other media: instant messaging spam, Usenet newsgroup spam, Web search engine spam, spam in blogs, wiki spam, online classified ads spam, mobile phone messaging spam, Internet forum spam, junk fax transmissions, social spam, television advertising and file sharing spam. It is named after Spam, a luncheon meat, by way of a Monty Python sketch in which Spam is included in every dish.^[1] The food is stereotypically disliked/unwanted, so the word came to be transferred by analogy.

Automated teller machine

 An automated teller machine or automatic teller machine^[1][2][3] (ATM, American, Australian, Singaporean, Indian, Maldivian, Hiberno and Sri Lankan English), also known as an automated banking machine (ABM, Canadian English), cash machine, cashpoint, cashline, or colloquially hole in the wall (British and South African English), is an electronic telecommunications device that enables the customers of a financial institution to perform financial transactions, particularly cash withdrawal, without the need for a human cashier, clerk or bank teller.

On most modern ATMs, the customer is identified by inserting a plastic ATM card with a magnetic stripe or a plastic smart card with a chip that contains a unique card number and some security information such as an expiration date or CVVC (CVV). Authentication is provided by the customer entering a personal identification number (PIN).

Firmware

 In electronic systems and computing, firmware is "the combination of a hardware device, e.g. an integrated circuit, and computer instructions and data that reside as read only software on that device". As a result, firmware usually cannot be modified during normal operation of the device.^[1] Typical examples of devices containing firmware are embedded systems (such as traffic lights, consumer appliances, and digital watches), computers, computer peripherals, mobile phones, and digital cameras. The firmware contained in these devices provides the control program for the device.

RAM

 Random-access memory (RAM /ræm/) is a form of computer data storage. A random-access memory device allows data items to be read and written in approximately the same amount of time, regardless of the order in which data items are accessed.^[1] In contrast, with other direct-access data storage media such as hard disks, CD-RWs, DVD-RWs and the older drum memory, the time required to read and write data items varies significantly depending on their physical locations on the recording medium, due to mechanical limitations such as media rotation speeds and arm movement delays.

SWIFT, Online Processing, Spam, Spyware, Cash Memory, ATM, Smart Card, Extranet, Digital Signature, Data Encryption , Data Decryption

 SWIFT:

 The Society for Worldwide Interbank Financial Telecommunication (SWIFT) provides a network that enables financial institutions worldwide to send and receive information about financial transactions in a secure, standardized and reliable environment. Swift also sells software and services to financial institutions, much of it for use on the SWIFT Net Network.

 Online Processing:

 A method of using a terminal remote from a company mainframe or an interface to the Internet like an e-commerce website for taking product orders and dealing with payments. The online processing of orders offers considerable savings and greater overall efficiency for most business sales operations, although system down time can be costly in terms of lost sales.

 Spam:

 spamming is the use of electronic messaging systems to send unsolicited messages (spam), especially advertising. As well as sending messages repeatedly on the same site. While the most widely recognized form of spam is e-mail spam.

 Spyware:

 Spyware is software that aids in gathering information about a person or organization without their knowledge and that may send such information to another entity without the consumer's consent, or that asserts control over a computer without the consumer's knowledge.

 Cash Memory:

 Cache memory, also called CPU memory, is random access memory (RAM) that a computer microprocessor can access more quickly than it can access regular RAM.

As the microprocessor processes data, it looks first in the cache memory and if it finds the data there (from a previous reading of data), it does not have to do the more time-consuming reading of data from larger memory

 ATM:

 An automated teller machine or automatic teller machinealso known as an automated banking machineis an electronic telecommunications device that enables the customers of a financial institution to perform financial transactions without the need for a human cashier, clerk or bank tellerOn most modern ATMs, the customer is identified by inserting a plastic ATM card with a magnetic stripe or a plastic smart card with a chip that contains a unique card number and some security information. Authentication is provided by the customer entering a personal identification number (PIN).

 Smart Card:

A smart card is a plastic card about the size of a credit card, with an embedded microchip that can be loaded with data, used for telephone calling, electronic cash payments, and other applications, and then periodically refreshed for additional use. Smart cards can provide identification, authentication, data storage and application processing.[2] Smart cards may provide strong security authentication for single sign-on (SSO) within large organizations.

 Extranet:

 An extranet is a computer network that allows controlled access from outside of an organization's intranet. Extranets are used for specific use cases including business-to-business (B2B). In a business-to-business context, an extranet can be viewed as an extension of an organization's intranet that is extended to users outside the organization, usually partners, vendors and suppliers, in isolation from all other Internet users. It is in context of that isolation that an extranet is different from an intranet or internet. In contrast, business-to-consumer (B2C) models involve known servers of one or more companies, communicating with previously unknown consumer users. An extranet is similar to a DMZ in that it provides access to needed services for channel partners, without granting access to an organization's entire network.

 Digital Signature:

 A digital signature is a mathematical scheme for demonstrating the authenticity of a digital message or document. A valid digital signature gives a recipient reason to believe that the message was created by a known sender, such that the sender cannot deny having sent the message (authentication and non-repudiation) and that the message was not altered in transit (integrity). Digital signatures are commonly used for software distribution, financial transactions, and in other cases where it is important to detect forgery or tampering.

 Data Encryption:

 Encryption is the process of using an algorithm to transform information to make it unreadable for unauthorized users. This cryptographic method protects sensitive data such as credit card numbers by encoding and transforming information into unreadable cipher text. This encoded data may only be decrypted or made readable with a key. Symmetric-key and asymmetric-key are the two primary types of encryption. Encryption is essential for ensured and trusted delivery of sensitive information

 Data Decryption:

 Decryption is the process of transforming data that has been rendered unreadable through encryption back to its unencrypted form. In decryption, the system extracts and converts the garbled data and transforms it to texts and images that are easily understandable not only by the reader but also by the system. Decryption may be accomplished manually or automatically. It may also be performed with a set of keys or passwords.

Online Banking, Mobile Banking, SMS Banking

 Online banking is an electronic payment system that enables customers of a financial institution to conduct financial transactions on a website operated by the institution, such as a retail bank, virtual bank, credit union or building society. Online banking is also referred as Internet banking, e-banking, virtual banking and by other terms.

To access a financial institution's online banking facility, a customer with Internet access would need to register with the institution for the service, and set up some password (under various names) for customer verification. The password for online banking is normally not the same as for telephone banking.

Mobile Banking is a Banking process without bank branch which provides financial services to unbanked communities efficiently and at affordable cost. To provide banking and financial services, such as cash-in, cash out, merchant payment, utility payment, salary disbursement, foreign remittance, government allowance disbursement, ATM money withdrawal through mobile technology devices, i.e. Mobile Phone, is called Mobile Banking.

SMS Banking:

 SMS banking is a type of mobile banking, a technology-enabled service offering from banks to its customers, permitting them to operate selected banking services over their mobile phones using SMS messaging

Audit Trail

 Paper or 'electronic' trail that gives a step by step documented history of a transaction. It enables an examiner to trace the financial data from general ledger to the source document (invoice, receipt, voucher, etc.). The presence of a reliable and easy to follow audit trail is an indicator of good internal controls instituted by a firm, and forms the basis of objectivity.