Redesigning Enterprise Processes e-Business Includes cd-RoM with Workflow BPR Process Modeling Software from holosofx nc Omar A El Sawy Marshall school of business University of Southern California McGraw-Hill Irwin Boston Burr Ridge, IL Dubuque, IA Madison, WI New York San Francisco St Louis Bangkok Bogota Caracas Lisbon London Madrid Mexico City Milan New Delhi Seoul Singapore Sydney Taipei Toronto
Redesigning Enterprise for e Dl I^IKI^^C^O -DUol 1600 Includes CD-ROM with WorkflowBPR Process Modeling Software from Holosofx Inc. Omar A. El Sawy Marshall School of Business University of Southern California McGraw-Hill Irwin Boston Burr Ridge, IL Dubuque, IA Madison, WI New York San Francisco St. Louis Bangkok Bogota Caracas Lisbon London Madrid Mexico City Milan New Delhi Seoul Singapore Sydney Taipei Toronto
CONTENTS PREFACE ACKNOWLEDGMENTS NAVIGATION GUIDE TO USING THIS BOOK PART A UNDERSTANDING BPR FOR e-BUSINESS 1 Introduction to BPR fore-Business 1-1: INTRODUCTION 1-1-1: What Is BPR? 1-1-2: What Is bPR for e-Business? 1-2: THE CONTEXT OF BPR FOR e-BUSINESS 8 1-2-1: The Leavitt Diamond: Understanding Organizational Adaptation 1-2-2: The Evolution of BPr 1-3: HOW DOES A BPR PROJECTWORK? 11 -3-1: The Phases of BPr"in the bIG 1 1-3-2: The Participants in a BPR Project 1-3-3: Cross-Enterprise BPR for e-Business 1-4: THE PROCESS REDESIGN PHASE OF BPR: A DESIGN FOCUS 1-5: REDESIGNING BUSINESS PROCESSES 1-5-1: The Properties of Business Processes 16 1-5-2: Three Generic IT-Enabled Ways for Redesigning Business processes 1-6: THE LEARNING BLOCKS OF BPR FORe-BUSINESS 2 Key Issues around BPR and the Evolution of BPR for e-Business 2-0. FIRST AND SECOND WAVES OF BPR 2-1: KEY ISSUES AROUND BPR: WHAT WE LEARNED FROM THE FIRST WAVE 2-1-1: The Scope, Success, and State of BPR 1-2: BPR Methodologies and Information Technologies 34 2-1-3: People Issues in BPR
CONTENTS PREFACE vii ACKNOWLEDGMENTS viii NAVIGATION GUIDE TO USING THIS BOOK x PART A UNDERSTANDING BPR FOR e-BUSINESS 1 1 Introduction to BPR for e-Business 3 1-1: INTRODUCTION 4 1-1-1: What Is BPR? 5 1-1-2: What Is BPR for e-Business? 7 1-2: THE CONTEXT OF BPR FOR e-BUSINESS 8 1-2-1: The Leavitt Diamond: Understanding Organizational Adaptation 8 1-2-2: The Evolution of BPR 9 1-3: HOW DOES A BPR PROJECT WORK? 11 1-3-1: The Phases of BPR "in the BIG" 12 1-3-2: The Participants in a BPR Project 13 1-3-3: Cross-Enterprise BPR for e-Business 14 1-4: THE PROCESS REDESIGN PHASE OF BPR: A DESIGN FOCUS 15 1-5: REDESIGNING BUSINESS PROCESSES 15 1-5-1: The Properties of Business Processes 16 1-5-2: Three Generic IT-Enabled Ways for Redesigning Business Processes 18 1-6: THE LEARNING BLOCKS OF BPR FOR e-BUSINESS 23 2 Key Issues around BPR and the Evolution of BPR for e-Business 25 2-0: FIRST AND SECOND WAVES OF BPR 26 2-1: KEY ISSUES AROUND BPR: WHAT WE LEARNED FROM THE FIRST WAVE 27 2-1-1: The Scope, Success, and State of BPR 27 2-1-2: BPR Methodologies and Information Technologies 34 2-1-3: People Issues in BPR 39 iii
V CONTENTS 2-2. BPR FOR e-BUSINESS: WHERE THE SECOND WAVE IS TAKING US 2-2-1: BPR and Supply Chain Management 44 2-2-2: BPR and Knowledge Management 2-2-3: BPR and Web-Enabled e-Business pRinciples and Tactics of Process Redesign for e-Business 3-1: THE e-BUSINESS SPEED LOOP FOR THE ENTERPRISE 3-2: REDESIGN PRINCIPLES AND TACTICS 3-2-1: Principles and Tactics for Restructuring and Reconfiguring Processes(Restructure It) 3-2-2: Principles and Tactics for Changing Information Flows around the Process(Informate It 3-2-3: Principles and Tactics for Changing Knowledge Management around the Process(Mind It) PART B HOW TO REDESIGN ENTERPRISE PROCESSES WITH BPR SOFTWARE 4 Scoping an Enterprise Process 4-0: READY TO LAUNCH? 4-1: OPERATIONALIZE PROCESS PERFORMANCE TARGETS 4-2: DEFINE PROCESS BOUNDARIES 4-3: IDENTIFY KEY PROCESS ISSUES 4-4: UNDERSTAND KNOWN BEST PRACTICES AND DEFINE INITIAL VISIONS 4-5: FAMILIARIZE PARTICIPANTS WITH BPR SOFTWARE 4-6: OUTLINE DATA COLLECTION PLAN AND COLLECT BASELINE DATA 4-7: PROCESS SCOPING REPORT 5 Foundations of Business Process Modeling and Analysis with BPR Software 105 5-1: WHY USE BPR SOFTWARE? 106 5-2: WHAT IS A BPR MODELING AND ANALYSIS METHOD? 5-3: THE SPECTRUM OF MODELING METHODS ADOPTED BY BPR SOFTWARE 110 5-4: UNDERSTANDING BPR MODELING AND ANALYSIS FOUNDATIONS 112 5-4-1: Building Block #1: Activity Decision Flow Diagrams -4-2: Building Block #2: Linking Resources to Activities 115 5-4-3: Building Block #3: Rules of Graphical Connection 116 5-4-4: Building Block #4: Activity Path Management Capabilities 5-4-5: Building Block #5: Process Performance Measu 5-5: RAMPING UP YOUR MODELING SKILLS 5-5-1: Taking Advantage of HoloSofx CD-ROM Help Files 134 5-5-2: Working through the Online Tutorial 5-5-3: Process Modeling Tips
IV CONTENTS 2-2: BPR FOR e-BUSINESS: WHERE THE SECOND WAVE IS TAKING US 44 2-2-1: BPR and Supply Chain Management 44 2-2-2: BPR and Knowledge Management 47 2-2-3: BPR and Web-Enabled e-Business 50 3 Principles and Tactics of Process Redesign for e-Business 54 3-1: THE e-BUSINESS SPEED LOOP FOR THE ENTERPRISE 54 3-2: REDESIGN PRINCIPLES AND TACTICS 56 3-2-1: Principles and Tactics for Restructuring and Reconfiguring Processes (Restructure It) 57 3-2-2: Principles and Tactics for Changing Information Flows around the Process (Informate It) 65 3-2-3: Principles and Tactics for Changing Knowledge Management around the Process (Mind It) 70 PART B HOW TO REDESIGN ENTERPRISE PROCESSES WITH BPR SOFTWARE 77 4 Scoping an Enterprise Process 79 4-0: READY TO LAUNCH? 79 4-1: OPERATIONALIZE PROCESS PERFORMANCE TARGETS 82 4-2: DEFINE PROCESS BOUNDARIES 86 4-3: IDENTIFY KEY PROCESS ISSUES 89 4-4: UNDERSTAND KNOWN BEST PRACTICES AND DEFINE INITIAL VISIONS 96 4-5: FAMILIARIZE PARTICIPANTS WITH BPR SOFTWARE 98 4-6: OUTLINE DATA COLLECTION PLAN AND COLLECT BASELINE DATA 100 4-7: PROCESS SCOPING REPORT 103 5 Foundations of Business Process Modeling and Analysis with BPR Software 105 5-1: WHY USE BPR SOFTWARE? 106 5-2: WHAT IS A BPR MODELING AND ANALYSIS METHOD? 108 5-3: THE SPECTRUM OF MODELING METHODS ADOPTED BY BPR SOFTWARE 110 5-4: UNDERSTANDING BPR MODELING AND ANALYSIS FOUNDATIONS 112 5-4-1: Building Block #1: Activity Decision Flow Diagrams 112 5-4-2: Building Block #2: Linking Resources to Activities 115 5-4-3: Building Block #3: Rules of Graphical Connection 116 5-4-4: Building Block #4: Activity Path Management Capabilities 127 5-4-5: Building Block #5: Process Performance Measurement 131 5-5: RAMPING UP YOUR MODELING SKILLS 134 5-5-1: Taking Advantage of HoloSofx CD-ROM Help Files 134 5-5-2: Working through the Online Tutorial 135 5-5-3: Process Modeling Tips 136
CONTENTS V 6 Analysis and Redesign of an Enterprise Process 137 6-0: ANALYSIS AND REDESIGN ACTIVITIES 6-1: REDESIGNING THE CUSTOMER SERVICE PROCESS AT ZYCO INSURANCE 138 6-1-1: Skeletal Storyline and Process Scoping 138 6-1-2: Modeling the As-Is Baseline Proces 6-1-3: Analysis and Diagnosis of the As-Is Baseline Process 6-1-4: Analysis and Redesign of the To-Be Process 148 6-1-5: Comparing As-Is and To-Be Processes 54 6-1-6: Analysis of What-lf Scenarios Through Simulation 6-1-7: Partner Impact and Process Reengineering Reports 163 7 Designing Collaborative Supply Chain Processes for e-Business 167 7-1: UNDERSTANDING MISALIGNMENTS AND COLLABORATIVE OPPORTUNITIES IN SUPPLY CHAINS 168 7-2. REDESIGNING SUPPLY CHAIN PROCESSES: REENGINEERING FROM THE 172 7-3: ROSETTANET EXAMPLE: NING e-BUSINESS PARTNER INTERFACE PROCESSES FOR THE IT-INDUSTRY SUPPLY CHAIN 174 7-3-1: Understanding the Process Structure of a Supply Chain 177 7-3-2: Designing e-Business PIPs for a Supply Chain Process 178 8 IT Integration Options for e-Business Processes 187 8-1: PLANNING PROCESS INTEGRATION: PREAMBLE TO IMPLEMENTATION 8-2: THE EVOLVING SPECTRUM OF IT PLATFORMS FOR PROCESS INTEGRATION 8-2-1: Custom Application Development 191 8-2-2: Workflow Engines 191 8-2-3: Enterprise Application Integration 192 8-2-4: Specialized e-Process Automation Software 8-2-5: XML-Based Process Integration Suites for e-Business 194 8-3: KEEPING BPR IN PERSPECTIVE THE CHALLENGE OF ORGANIZATIONAL TRANSFORMATION FOR e-BUSINESS APPENDIX NSTALLING THE HOLOSOFX WORKFLOW BPR MODELER SOF TWARE
CONTENTS 6 Analysis and Redesign of an Enterprise Process 137 6-0: ANALYSIS AND REDESIGN ACTIVITIES 137 6-1: REDESIGNING THE CUSTOMER SERVICE PROCESS AT ZYCO INSURANCE 138 6-1—1: Skeletal Storyline and Process Scoping 138 6—1—2: Modeling the As-ls Baseline Process 141 6—1-3: Analysis and Diagnosis of the As-ls Baseline Process 143 6—1—4: Analysis and Redesign of the To-Be Process 148 6—1—5: Comparing As-ls and To-Be Processes 154 6-1—6: Analysis of What-lf Scenarios Through Simulation 155 6—1—7: Partner Impact and Process Reengineering Reports 163 7 Designing Collaborative Supply Chain Processes for e-Business 167 7-1: UNDERSTANDING MISALIGNMENTS AND COLLABORATIVE OPPORTUNITIES IN SUPPLY CHAINS 168 7-2: REDESIGNING SUPPLY CHAIN PROCESSES: REENGINEERING FROM THE OUTSIDE-IN 172 7-3: ROSETTANET EXAMPLE: DESIGNING e-BUSINESS PARTNER INTERFACE PROCESSES FOR THE IT-INDUSTRY SUPPLY CHAIN 174 7—3—1: Understanding the Process Structure of a Supply Chain 177 7-3—2: Designing e-Business PIPs for a Supply Chain Process 178 8 IT Integration Options for e-Business Processes 187 8-1: PLANNING PROCESS INTEGRATION: PREAMBLE TO IMPLEMENTATION 188 8-2: THE EVOLVING SPECTRUM OF IT PLATFORMS FOR PROCESS INTEGRATION 19O 8—2—1: Custom Application Development 191 8-2-2: Workflow Engines 191 8—2-3: Enterprise Application Integration 192 8—2-4: Specialized e-Process Automation Software 193 8—2—5: XML-Based Process Integration Suites for e-Business 194 8-3: KEEPING BPR IN PERSPECTIVE: THE CHALLENGE OF ORGANIZATIONAL TRANSFORMATION FOR e-BUSINESS 199 APPENDIX 201 INSTALLING THE HOLOSOFX WORKFLOW.BPR MODELER SOFTWARE 202 INDEX 203
PREFACE PREFACE This is the decade of redesigning enterprise processes for e-business. While creating a process advantage has always been a formidable strategic weapon for business enter prises, a new urgency for a different form of business process redesign or reengineer ing(BPR) has been ignited by e-business At this writing I cannot imagine any career in line management that will not require basic skills in BPR for e-business. Whether you are in a start-up that is trying to design new marketing processes around the Internet, or in a large traditional brick-and-mortar enterprise that is redoing its supply chain for e-business, or in a Big 5 consulting com- pany with an electronic commerce practice, or in a nonprofit company that is restruc turing web-based customer service, or whether you work in Stockholm or Singapore you will definitely need skills in BPR for e-business. The career advancement opportu- nities that it opens are endless As we enter the 2lst century, the rapid progress in the capabilities of the Internet and information technology infrastructures are enabling enterprises to create value in new and exciting ways. In this customer-centered high velocity environment an enterprise's business processes must be fast, focused, and flexible. Business-to-business electronic commerce is coming together with physical supply chain management and is coalescing into an information-rich combination called e-business. moreover the focus of business process redesign has shifted to include cross-enterprise processes partly executed by one nterprise and partly by another Competitive pressures and value creation opportunities have never been greater for enterprises to redesign their business processes In such an environment, business professionals need to learn how to describe, lyze, diagnose, and redesign a business process through robust BPR methodologies tools. In an era of e-business, redesigning a business process involves more than re- structuring the workflow. It also involves changing the information flows around the usiness process and changing the knowledge management capabilities of the process by harnessing the collective intellectual assets around it. This book is targeted to the practicing or future business professional who would like to learn how to carry out such BPR in e-business settings
PREFACE PREFACE This is the decade of redesigning enterprise processes for e-business. While creating a process advantage has always been a formidable strategic weapon for business enterprises, a new urgency for a different form of business process redesign or reengineering (BPR) has been ignited by e-business. At this writing I cannot imagine any career in line management that will not require basic skills in BPR for e-business. Whether you are in a start-up that is trying to design new marketing processes around the Internet, or in a large traditional brick-and-mortar enterprise that is redoing its supply chain for e-business, or in a Big 5 consulting company with an electronic commerce practice, or in a nonprofit company that is restructuring web-based customer service, or whether you work in Stockholm or Singapore, you will definitely need skills in BPR for e-business. The career advancement opportunities that it opens are endless. As we enter the 21st century, the rapid progress in the capabilities of the Internet and information technology infrastructures are enabling enterprises to create value in new and exciting ways. In this customer-centered high velocity environment an enterprise's business processes must be fast, focused, and flexible. Business-to-business electronic commerce is coming together with physical supply chain management and is coalescing into an information-rich combination called e-business. Moreover, the focus of business process redesign has shifted to include cross-enterprise processes partly executed by one enterprise and partly by another. Competitive pressures and value creation opportunities have never been greater for enterprises to redesign their business processes. In such an environment, business professionals need to learn how to describe, analyze, diagnose, and redesign a business process through robust BPR methodologies and tools. In an era of e-business, redesigning a business process involves more than restructuring the workflow. It also involves changing the information flows around the business process and changing the knowledge management capabilities of the process by harnessing the collective intellectual assets around it. This book is targeted to the practicing or future business professional who would like to learn how to carry out such BPR in e-business settings. vii
VIM PREFACE There are many books and how articles on the'whyand the what' of BPR. However that is not the case with the howof BPR, and especially not in the case of e-business There are also many books and articles about managing the organizational change efforts that are needed to make the implementation of BPR successful. There is, however, notice- ably much less publicly available about the nitty-gritty of the how that is needed to redesign and improve business processes. The how of design appears to be kept within the propri- etary domain of consulting companies and is relatively unarticulated and underdeveloped in the public domain. Existing books provide little hands-on progressive experiential learn- ing. Neither do they provide a business-orien nted BPR software tool and an accompanying step-by-step BPR methodology to enrich the quality of the learning experience. Most im- ortantly, at this time there are no books that address these BPR issues in an e-business context. This book is designed to fill all these gaps This book prepares you to be a full-fledged participant in any process redesign effort an enterprise in this era of e-business. It provides basic understanding of business process redesign concepts, a how-to guide for redesigning business processes, and ac- companying business process modeling software on CD-ROM. The software is a lim- ited version of a leading-edge commercial software package, Workflow BPR Modeler from Holosofx Inc. that runs on any standard Windows-based personal computer. Th book also provides a series of case studies and examples based on real company expe- riences that the engaged reader can work through with the software. In addition, the book provides a supply chain view of business processes that is geared to e-business The book is also augmented with updates and tips accessible through McGraw-Hill's Internet website This book can be used in classroom settings, on the job, and in a self-guided learn- ing mode. It assumes only that the reader/learner has an intelligent understanding of how a business works and that he or she has basic point-and-click computer literacy in order to use the software and navigate through it. For university classroom settings, the book is designed to be used in business process reengineering courses that want to be relevant to current e-business settings; in electronic commerce and e-business hat want to provide concrete process redesign methods for e-business; and for chain management courses geared to e-business. The book is also helpful for ctual field projects during t Whether your passion and interest is business process consulting, e-business, infor- mation systems, electronic commerce, operations, or supply chain management, this book is geared to prepare you to be a full-fledged participant in BPR and e-business ini- ACKNOWLEDGMENTS his book could not have been completed without the help, support, patience, and en ouragement of many people. One"Big Thank You"is to my wife Hana and our chil Iren Nada, Hassan, and Kareem who patiently(and usually lovingly)endured the mak ing of a book that had its starts and stops. The other"Big Thank You" is to my good friend Hassan Khorshid, CEO and president of Holosofx who shared insights and made available the expertise of Holosofx and the software that comes with this book fo
VIM PREFACE There are many books and 'how' articles on the 'why' and the 'what' of BPR. However, that is not the case with the 'how' of BPR, and especially not in the case of e-business. There are also many books and articles about managing the organizational change efforts that are needed to make the implementation of BPR successful. There is, however, noticeably much less publicly available about the nitty-gritty of the how that is needed to redesign and improve business processes. The how of design appears to be kept within the proprietary domain of consulting companies and is relatively unarticulated and underdeveloped in the public domain. Existing books provide little hands-on progressive experiential learning. Neither do they provide a business-oriented BPR software tool and an accompanying step-by-step BPR methodology to enrich the quality of the learning experience. Most importantly, at this time there are no books that address these BPR issues in an e-business context. This book is designed to fill all these gaps. This book prepares you to be a full-fledged participant in any process redesign effort for an enterprise in this era of e-business. It provides basic understanding of business process redesign concepts, a how-to guide for redesigning business processes, and accompanying business process modeling software on CD-ROM. The software is a limited version of a leading-edge commercial software package, Workflow-BPR Modeler from Holosofx Inc. that runs on any standard Windows-based personal computer. This book also provides a series of case studies and examples based on real company experiences that the engaged reader can work through with the software. In addition, the book provides a supply chain view of business processes that is geared to e-business. The book is also augmented with updates and tips accessible through McGraw-Hill's Internet website. This book can be used in classroom settings, on the job, and in a self-guided learning mode. It assumes only that the reader/learner has an intelligent understanding of how a business works and that he or she has basic point-and-click computer literacy in order to use the software and navigate through it. For university classroom settings, the book is designed to be used in business process reengineering courses that want to be relevant to current e-business settings; in electronic commerce and e-business courses that want to provide concrete process redesign methods for e-business; and for supply chain management courses geared to e-business. The book is also helpful for courses in these topics that include actual field projects during the course of the semester. Whether your passion and interest is business process consulting, e-business, information systems, electronic commerce, operations, or supply chain management, this book is geared to prepare you to be a full-fledged participant in BPR and e-business initiatives. Go conquer! ACKNOWLEDGMENTS This book could not have been completed without the help, support, patience, and en couragement of many people. One "Big Thank You" is to my wife Hana and our chil dren Nada, Hassan, and Kareem who patiently (and usually lovingly) endured the mak ing of a book that had its starts and stops. The other "Big Thank You" is to my gooc friend Hassan Khorshid, CEO and president of Holosofx who shared insights and made available the expertise of Holosofx and the software that comes with this book fo
PREFACE WX educational purposes. He is the vision and key architect behind the Workflow BPR soft- ware and has deeper intellectual insight into business processes and process management than anyone I have ever met There are also a number of colleagues, friends, graduate students, and institutions whom I would like to especially thank. The Zyco insurance example in Chapter 6 is adapted from field work and modeling by les Sunohara of Holosofx who also provided detailed commentary at short notice. Il Im, Ph D. candidate at the USC Marshall School of Business, painstakingly smoothed rough spots in the flow and exposition of the ex- amples in Chapters 5 and 6. Chapter 7 draws on joint work between the RosettaNet Consortium. Holosofx. and the uSc marshall School of Business. Thanks are due to the pioneering efforts of Fadi Chehade, RosettaNet CEO, for creating such an exciting and forward-looking context for e-business, with whom I really enjoyed working over the last two years. The examples in Chapter 7 are adapted from modeling by Eric Olson and Jasmine Basrai of Holosofx. Dale Miller, a vice president in the banking industry provided very helpful input to Chapter 4. Gamal Shohaiep of Holosofx provided the de sign of the example in Chapter 5. Mike Laube helped configure and test the CD-ROm and Steve White and Jeff Reed all of Holosofx also provided much help on several oc- Christoph Bussler of Netfish Technologies kindly read Chapte A number of colleagues around the world used the book-in-progress in teaching their BPR and e-business mBa classes and provided very helpful feedback: Tom Housel of the USC Marshall School of Business, Timo Kakola of the University of Jyvaskyla in Finland, Sven Carlsson of Lund University in Sweden, and Guillermo Asper of the Uni versity of Brasilia in Brazil. Several of my teaching assistants and Ph. D. candidates made suggestions and acted as good-humored intellectual sounding boards over the course of writing this book: Sanjay Gosain now at the University of Mary land; Zoonky Lee now at the University of Nebraska; Arvind Malhotra now at the University of North Carolina at Chapel Hill; and Arjan Raven now at Georgia State University; and our USC isitor Carl-Johan Westin of CEPRO and the University of Linkoping, Sweden. Arvind and Sanjay were also my collaborators and soulmates on the RosettaNet research proj ect and completed their doctoral dissertations in that field context. I learned much from hem through our collaboration adjoint work. USC faculty colleagues Alexander Hars, Ravi Kumar, and Ann Majchrzak provided encouragement as did Inger Eriksson of the University of Turku, Finland. Paul Gray of Claremont Graduate University and Peter G.w. Keen provided inspiration for writing this book. The MBA students in my IOM 539 course endured early versions of some chapters. Thanks to all those wonderful col- leagues and to the usc marshall School of Business I would also like to thank the anonymous reviewers who provided useful suggestions that made this a better book. I would like to thank the McGraw-Hill project team headed by Mary Conzachi. Finally, a very warm thanks is due to Rick Williamson, my senior spon- soring editor at McGraw-Hill, who patiently provided creative guidance in bringing this project to completion. Omar A. El Sawy Manhattan Beach California
PREFACE iX educational purposes. He is the vision and key architect behind the WorkflowBPR software and has deeper intellectual insight into business processes and process management than anyone I have ever met. There are also a number of colleagues, friends, graduate students, and institutions whom I would like to especially thank. The Zyco insurance example in Chapter 6 is adapted from field work and modeling by Les Sunohara of Holosofx who also provided detailed commentary at short notice. II Im, Ph.D. candidate at the USC Marshall School of Business, painstakingly smoothed rough spots in the flow and exposition of the examples in Chapters 5 and 6. Chapter 7 draws on joint work between the RosettaNet Consortium, Holosofx, and the USC Marshall School of Business. Thanks are due to the pioneering efforts of Fadi Chehade, RosettaNet CEO, for creating such an exciting and forward-looking context for e-business, with whom I really enjoyed working over the last two years. The examples in Chapter 7 are adapted from modeling by Eric Olson and Jasmine Basrai of Holosofx. Dale Miller, a vice president in the banking industry, provided very helpful input to Chapter 4. Gamal Shohaiep of Holosofx provided the design of the example in Chapter 5. Mike Laube helped configure and test the CD-ROM, and Steve White and Jeff Reed all of Holosofx also provided much help on several occasions. Christoph Bussler of Netfish Technologies kindly read Chapter 8. A number of colleagues around the world used the book-in-progress in teaching their BPR and e-business MBA classes and provided very helpful feedback: Tom House! of the USC Marshall School of Business, Timo Kakola of the University of Jyvaskyla in Finland, Sven Carlsson of Lund University in Sweden, and Guillermo Asper of the University of Brasilia in Brazil. Several of my teaching assistants and Ph.D. candidates made suggestions and acted as good-humored intellectual sounding boards over the course of writing this book: Sanjay Gosain now at the University of Maryland; Zoonky Lee now at the University of Nebraska; Arvind Malhotra now at the University of North Carolina at Chapel Hill; and Arjan Raven now at Georgia State University; and our USC visitor Carl-Johan Westin of CEPRO and the University of Linkoping, Sweden. Arvind and Sanjay were also my collaborators and soulmates on the RosettaNet research project and completed their doctoral dissertations in that field context. I learned much from them through our collaboration and joint work. USC faculty colleagues Alexander Hars, Ravi Kumar, and Ann Majchrzak provided encouragement as did Inger Eriksson of the University of Turku, Finland. Paul Gray of Claremont Graduate University and Peter G.W. Keen provided inspiration for writing this book. The MBA students in my IOM 539 course endured early versions of some chapters. Thanks to all those wonderful colleagues and to the USC Marshall School of Business. I would also like to thank the anonymous reviewers who provided useful suggestions that made this a better book. I would like to thank the McGraw-Hill project team headed by Mary Conzachi. Finally, a very warm thanks is due to Rick Williamson, my senior sponsoring editor at McGraw-Hill, who patiently provided creative guidance in bringing this project to completion. Omar A. El Sawy Manhattan Beach, California
NAVIGATION GUIDE TO USING THIS BOOK The book is divided into two parts Part A: Understanding BPR for e-Business Part a provides a general under- standing of the concepts and issues of business process redesign(BPR)in the context of e-business Part B: How to Redesign Enterprise Processes with BPR Software Part provides a step-by-step progression of how to redesign enterprise processes and supply chain processes with BPR software through examples. Part B takes advantage of the Holosofx Workflow- BPR software on CD-ROM that comes with the book Part A consists of three chapters Chapter 1: Introduction to BPR for e-business Chapter I provides an introduction to BPR and e-business and their relationship to how business enterprises go through organizational change. It provides an overview of how BPR projects work and also provides a general orientation and introduction to the book hapter 2: Key Issues around BPR and the Evolution of BPR for e-Business Chapter 2 provides a general survey of the concepts and perspectives around the evolu- tion of BPR for e-business. The first part of the chapter presents the key issues around BPR by examining what we learned from the first wave of BPr in the early to mid 1990s. The second part of the chapter presents the issues around the evolution of BPR in its second wave in the late 1990s in order to better understand the direction of evolution of BPR for e-business. The structure of the chapter is in a question-and-answer mode to allow the reader to flexibly navigate through it and also to refer back for reference Chapter 3: Principles and Tactics of Process Redesign for e-Business Chapter 3 provides three different sets of principles and tactics for redesigning enter- prise processes in e-business situations: principles and tactics for restructuring and re- configuring a business process(restructuring it), principles and tactics for changing the information flows around a business process (informating it), and principles and tactics heuristics for changing knowledge management around a business process(minding it) The principles and tactics are illustrated through many current examples Part B consists of five chapters that progressively go through the phases of business process redesign for enterprise processes and supply chain processes in the context of e-business Chapter 4: Scoping an Enterprise Process Chapter 4 explains through a detailed real case study what needs to happen at the end of enterprise process redesign(the scoping phase). It provides steps, methods
X PREFACE NAVIGATION GUIDE TO USING THIS BOOK The book is divided into two parts: • Part A: Understanding BPR for e-Business Part A provides a general understanding of the concepts and issues of business process redesign (BPR) in the context of e-business. • Part B: How to Redesign Enterprise Processes with BPR Software Part B provides a step-by-step progression of how to redesign enterprise processes and supply chain processes with BPR software through examples. Part B takes advantage of the Holosofx WorkflowBPR software on CD-ROM that comes with the book. Part A consists of three chapters. Chapter 1: Introduction to BPR for e-business Chapter 1 provides an introduction to BPR and e-business and their relationship to how business enterprises go through organizational change. It provides an overview of how BPR projects work and also provides a general orientation and introduction to the book. Chapter 2: Key Issues around BPR and the Evolution of BPR for e-Business Chapter 2 provides a general survey of the concepts and perspectives around the evolution of BPR for e-business. The first part of the chapter presents the key issues around BPR by examining what we learned from the first wave of BPR in the early to mid- 1990s. The second part of the chapter presents the issues around the evolution of BPR in its second wave in the late 1990s in order to better understand the direction of evolution of BPR for e-business.The structure of the chapter is in a question-and-answer mode to allow the reader to flexibly navigate through it and also to refer back for reference. Chapter 3: Principles and Tactics of Process Redesign for e-Business Chapter 3 provides three different sets of principles and tactics for redesigning enterprise processes in e-business situations: principles and tactics for restructuring and reconfiguring a business process (restructuring it), principles and tactics for changing the information flows around a business process (informating it), and principles and tactics heuristics for changing knowledge management around a business process (minding it). The principles and tactics are illustrated through many current examples. Part B consists of five chapters that progressively go through the phases of business process redesign for enterprise processes and supply chain processes in the context of e-business. Chapter 4: Scoping an Enterprise Process Chapter 4 explains through a detailed real case study what needs to happen at the front end of enterprise process redesign (the scoping phase). It provides steps, methods, and templates
PREFACE XI Chapter 5: Fou of busir and analysis with BPR Software Chapter 5 is the process modeling chapter. It provides the foundations of business process modeling and analysis with BPR software. It explains what BPR software is ind provides a hands-on initial familiarization with the Holosofx Workflow BPR soft rare that comes with the book. This is done by working through a case example using the software. Finally, it provides guidance for readers who want to further ramp up their modeling skills Chapter 6: Analysis and Redesign of an Enterprise Chapter 6 explains through a detailed case example the different methods of process analy- sis and redesign for enterprise processes while taking advantage of the Workflow BPR software capabilities. It explains the steps in the modeling, analysis, and redesign phase. It shows how to compare"as-is"and"to-be"process designs through weighted average analysis and what-if simulation scenarios. Chapter 7: Designing Collaborative Supply Chain Processes for e-Business Chapter 7 takes the business process redesign methodology beyond the enterprise level to the supply chain level. Through a real case example, it shows how to redesign sup- ply chain processes for e-business when there are multiple partners doing business with hapter 8: IT Integration Options for e-Business Chapter 8 briefly describes the different types ofIT software platforms that can be used to integrate new or redesigned e-business processes into enterprise architectures so they can be executed. The examination and consideration of these alternatives is the final step before launching organizational implementation. The chapter also reiterates how the focus of Part B of the book fits into the broader perspective of organizational trans formation for e-business
PREFACE XI Chapter 5: Foundations of Business Process Modeling and Analysis with BPR Software Chapter 5 is the process modeling chapter. It provides the foundations of business process modeling and analysis with BPR software. It explains what BPR software is and provides a hands-on initial familiarization with the Holosofx Workflow-BPR software that comes with the book. This is done by working through a case example using the software. Finally, it provides guidance for readers who want to further ramp up their modeling skills. Chapter 6: Analysis and Redesign of an Enterprise Process Chapter 6 explains through a detailed case example the different methods of process analysis and redesign for enterprise processes while taking advantage of the Workflow-BPR software capabilities. It explains the steps in the modeling, analysis, and redesign phase. It shows how to compare "as-is" and "to-be" process designs through weighted average analysis and what-if simulation scenarios. Chapter 7: Designing Collaborative Supply Chain Processes for e-Business Chapter 7 takes the business process redesign methodology beyond the enterprise level to the supply chain level. Through a real case example, it shows how to redesign supply chain processes for e-business when there are multiple partners doing business with each other. Chapter 8: IT Integration Options for e-Business Processes Chapter 8 briefly describes the different types of IT software platforms that can be used to integrate new or redesigned e-business processes into enterprise architectures so they can be executed. The examination and consideration of these alternatives is the final step before launching organizational implementation. The chapter also reiterates how the focus of Part B of the book fits into the broader perspective of organizational transformation for e-business
PART A UNDERSTANDING BPR FOR e-BUSINESS Part a of the book provides a general understanding of the concepts and issues of busi- ess process redesign(BPR)in the context of e-business. It provides an introduction to BPR and e-business, as well as a general survey of the concepts and perspectives around the evolution of BPR for e-business. It also provides principles and tactics for re- designing enterprise processes in e-business situations
PARTA UNDERSTANDING BPR FOR e-BUSINESS Part A of the book provides a general understanding of the concepts and issues of business process redesign (BPR) in the context of e-business. It provides an introduction to BPR and e-business, as well as a general survey of the concepts and perspectives around the evolution of BPR for e-business. It also provides principles and tactics for redesigning enterprise processes in e-business situations
