Chapter-4

TYPES OF CHANGE
 Overview of Change Management
• UNIT 4 - Types of change
• Planned Vs. Unplanned Change
• Revolutionary Vs. Evolutionary Change
• BPR & BPR process
• BPR techniques and tools
• Implementation of BPR
• Other kinds of Change
 Planned Change

• Planned change occurs when leaders in the organization

recognize the need for a major change and proactively
organize a plan to accomplish the change.
• Planned change occurs with successful implementation of a
Strategic Plan, plan for reorganization, or other
implementation of a change of this magnitude.
• Planned organizational change is normally targeted at
improving effectiveness at one or more of four different
levels: human resources, functional resources,
technological capabilities, and organizational capabilities.
Unplanned Change

• Not all forces for change are the result of strategic planning. Indeed,
organizations also must be responsive to changes that are unplanned.
• Such forces include changes in the demographic composition of the work
force, performance gaps, government regulation, and international
competition.
• Unplanned change is occurred with sudden changes in both internal and
external factors.
• It is not a change through strategic plan, rather it is a change either to
tackle possible risks due to environmental changes or exploit
opportunities without prior plan.
• Unplanned change might occur when the Chief Executive Officer
suddenly leaves the organization, significant public relations problems
occur, poor product performance quickly results in loss of customers, or
other disruptive situations arise.
Evolutionary or Revolutionary Change

• Evolutionary change is change that happens over time to ensure the

survival of the organization.
• Evolutionary change is typically change brought about by either
outside pressure or incentives.
• For example, many hospital and healthcare providers have evolved
by transforming their paper medical record keeping to electronic
medical record keeping due to external financial incentives.
• Retail and food chains typical evolve by outside pressure from
competition.
• A new salad offering at one chain of fast food restaurants and
invariably a salad offering is picked up by all the others.
• Whether healthcare, fast food, retail, or a service industry,
evolutionary change keeps everyone in the game.
 Evolutionary or Revolutionary Change
• In contrast, revolutionary change occurs when organizations make radical
transformations to their product or service in an effort to be on their game
rather than simply in the game.
• These organizations engage in revolutionary transformations at key points of
their evolution.
• Revolutionary change is when the organization anticipates a market change
before it happens and views these potential market changes as a business
challenge.
• Example: Amazon is an organization that engages in revolutionary change.
• The advent of the Kindle was revolutionary to the book publishing and reading
world.
• There are many other outstanding organizations that engage regularly in
revolutionary change.
• It is revolutionary not evolutionary change that separates the winners from
merely the survivors.
Business Process Reengineering (BPR)
• Business Process Reengineering (BPR) 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 (Hammer &
Champy, 1993).
•
Business Process Reengineering (BPR) Points

• Fundamental rethinking
• Radical redesign
• Dramatic Improvements
• Business Processes
Historical Background of BPR

• The concept of reengineering traces its origins back to management

theories developed as early as the nineteenth century.
• Frederick Taylor suggested in the 1880's that managers use process
reengineering methods to discover the best processes for performing
work, and that these processes be reengineered to optimize productivity.
• The later turning point was the article published by Michael Hammer, a
former professor of Computer Science at the Massachusetts Institute of
Technology (MIT), in the Harvard Business Review.
• In his Article, Hammer pointed out that most organizations were using
technology to automate non-value adding work.
• He recommended the reengineering of business processes to weed out
non-value adding work before applying the power of technology to
automate the processes.
 Principles of BPR
• Focus on the customer and generation of greater value for
customers.
• Employees should be involved and empowered to make
decisions for improvement.
• Non-value adding processes must be removed.
• BPR should focus on networking people and integrating
related processes.
• Harness the power of ICT but avoid over-sophistication.
Software tools should not replace creative thinking.
• Critical analysis of current rules, regulations, practices and
legislation
 Objectives of BPR

• Customer focus
• Speed
• Flexibility
• Quality
• Innovation
• Productivity
 Essential Requirements of Business Process Redesign

• It requires the support of information technology.

• To gather and analyze information efficiently and
cost-effectively, Re-designed process need to be
verified for its practicality.
• Information technology makes it possible to put
process into visuals before it is implemented as
wrongful implementation of the process can be
very costly in terms of time, money and
reputation.
 Essential Requirements of Business Process Redesign

• Business process redesign requires

decentralization, so that employs involved in
the process can take decisions, they are in
better position to development viable process
as they aware of the risk and challenges faced in
executing the process in day to day operations.
• It permits fast implementation of processes
because information does not have travel
upwards.
 Essential Requirements of Business Process Redesign

• Horizontal communication (Communication between

departments) is necessary to employees involved in
the process know the consequence of their work on
each other and whole business.
• Multi-skilled workers more likely to understand and
take the ownership of whole process.
• They can understand the information needs of other
workers.
• Workers may have to be re-trained to carryout
activities in different manner.
 Essential Requirements of Business Process Redesign

• Team working is necessary rather than

separate department pursuing their own
objectives.
• This involves re-structuring of the business
which is operating in traditional tall and
departmental business structures.
• Personnel from each department which are
expected to carry out the process are involved
in process redesign.
The BPR Process
Preparing for Reengineering

• Planning and preparation are vital for the successful

implementation of a BPR project. The following activities shall be
carried out during the preparation phase:
• Determine need for BPR: Justification for reengineering business
processes marks the initial step in preparing for BPR.
• Top-level management needs to agree on the processes to be
re-engineered and clearly define the project vision.
• Build a cross functional team: The next step is to build a
committed cross-functional team with a clear mandate to carry
out the BPR exercise.
• This team should be guided by the project vision, which is
informed by the customer’s needs.
Mapping and Analyzing Current (“As Is”) Processes

• Mapping: of the existing business processes

facilitates understanding of the process before
the reengineering team proceeds to analyze
them. Definition of “As Is” processes involves
drawing of process models and stating how
long the process takes as well as cost required
by the process in terms of resources.
•
 Mapping and Analyzing Current (“As Is”)
Processes
• Analysis: of existing business processes is done to
understand current processes and to identify inefficiencies
and bottlenecks.
• The analysis should include number of procedures per
process, length of process, service points, actors involved
(including physical location), the cost of the entire process,
the cost of accessing the service by the customer (fees
charged), rules, regulations, practices, legislation governing
the process, impact of current processes and procedures on
the firm’s revenue.
• This step helps to identify the processes to be reengineered.
Designing “To Be” Processes

• The objective of this phase is to propose one or more alternatives

to the “As Is” or existing business process, which satisfy the
strategic business goals of the organization. This step involves:
• Benchmarking: This involves comparing the way an organization’s
processes are conducted as well as performance of those
processes with those of peer organizations in order to obtain ideas
for improvement.
• The peer organizations need not be competitors or even from the
same industry as innovative ideas may be obtained from diverse
sources.
• Combining benchmarking and reengineering ensures that the best
practices are in use and helps a firm seek out and eliminate steps
that waste resources.
 Designing “To Be” Processes
• Map “To Be” Business Processes: After potential improvements to the
existing processes are identified, envisaged (“To Be”) business process
models are mapped.
• Definition of the “To Be” business processes will also entail detailing the
number of procedures, the cost required by the process in terms of
resources, length of the process, service points, and also the actors involved.
•
• Select “To Be” Business Processes: This shall only be done for those cases
where several “To Be” Business Processes have been proposed to resolve
specific challenges.
• Upon mapping of the “To Be” Business Process Model(s), the best possible
“To Be” business process is selected.
• At the end of this step, the team should have a list of Reengineered Business
Processes to be implemented.
Implementing Reengineered Processes

• Reengineering efforts are likely to meet most resistance

during this phase and therefore implementation must
be accompanied by effective leadership and appropriate
change management programs to ensure smooth
implementation of Reengineered processes.
• It is prudent to initiate and run a change management
program concurrently with the reengineering effort
from the beginning of the exercise in order to
adequately prepare the organization for change and to
build a culture where people accept change.
•
 Monitoring and Evaluation

• Upon implementation of the Reengineered

Business Processes, monitoring and evaluation
must be carried out to assess the progress and
effectiveness of the reengineered Business
Processes in achieving the project vision.
• This should be done on a continuous basis.
Corrective action, where appropriate, should be
taken to ensure that reengineered processes are
achieving the project vision and the organization’s
objectives.
BPR Vs Total Quality Management/TQM
BPR Tools and Techniques

• Decision support system

• the nature of data to be analyzed,
• the background of users.
 Benchmarking

• Benchmarking is a systematic process of measuring

your organization's performance against toughest
those companies recognized as the best in class. The
two major purposes of benchmarking are first to
provide illumination of your organization's practices
and second, to get ideas on how to do them better.
Benchmarking is used in organizational analysis to
determine the performance gaps between an
organization and the leaders in similar industries in the
market place.
•