1. Postech Strategic Management of Information Systems LAB
BPR/ERP
Postech Strategic Management of Information Systems LAB

2. Postech Strategic Management of Information Systems LAB
What is BPR?
“Reengineering is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measure of performance, such as cost, quality, service, and speed”
-Dr. Michael Hammer
Postech Strategic Management of Information Systems LAB

3. Fundamental Concept of BPR
Process
Fundamental
Radical
Dramatic
Shift from function based thinking to process based thinking
Fundamental rethinking of the way of conducting business
Disregarding all existing structures and inventing complete new ways –not improvement or modification
Making quantum leaps in performance rather than incremental improvement
Postech Strategic Management of Information Systems LAB

4. Postech Strategic Management of Information Systems LAB
Why BPR?
Innovation
Customer
Driven
Core
Competence
Globalization !
Change
Competition
Postech Strategic Management of Information Systems LAB

5. Postech Strategic Management of Information Systems LAB
What is Process?
Definition of Process
A process is a cross-functional interrelated series of activities that convert business inputs into business outputs
Supplier
Customer
Input
Output
Activity
Process
Postech Strategic Management of Information Systems LAB

6. Seven Principles of BPR
Organize around outcomes, not task
Have those who use the output of the process perform the process
Subsume Information processing work into the real work that produces the Information
Treat geographically dispersed resources as though they were centralized
Link parallel activities instead of integrating their results
Put the decision point where the work is performed, and build control into the process
Capture all information at the source
BPR Principles
Postech Strategic Management of Information Systems LAB

7. Common steps when performing BPR
1. Selection of project
2. Analysis of initial capability
3. Selection of process and project scope
4. Work analysis
5. Redesign of alternative process
6. Cost/benefit analysis for each alternative process
7. Selection of alternative process
8. Implementation of process
9. Change of process information
Postech Strategic Management of Information Systems LAB

8. Taylorism VS. BPR Taylorism BPR(Hammerism) Orientation Task, Function
Process
Tool
Stopwatch IT
Domain
Production Management
Entire organization
Goal
Mass production
Customer satisfaction
Age
Industrial revolution
Information revolution
Postech Strategic Management of Information Systems LAB

9. Assumptions Questioned
BPR VS. Other Programs
Reengineering
Rightsizing
Restructuring
TQM
Automation
Assumptions Questioned
Fundamental
Staffing
Reporting Relationships
Customer Wants and Needs
Technology Applications
Scope of change
Radical
Staffing, Job Responsibilities
Organizations
Bottom-up
Systems
Orientation
Processes
Functional
Procedures
Improvement Goals
Dramatic
Incremental
Postech Strategic Management of Information Systems LAB

10. Information Technology
What is ERP?
Definition of ERP(Enterprise Resource Planning)
A set of applications designed to bring business functions into balance and represents the next generation of business systems – by Gartner Group
An accounting oriented information system for identifying and planning the enterprise wide resource –by APICS
ERP
Advanced Process
BPR
Information Technology
Process Innovation
Postech Strategic Management of Information Systems LAB

11. Development of ERP 1970’s 1980’s 1990’s 2000’s SCM ERP MRPII MRP
(Material Requirement Planning)
MRPII
(Manufacturing Resource Planning)
ERP
(Enterprise Resource Planning)
SCM
(Supply Chain Management)
1970’s
1980’s
1990’s
2000’s
Material Planning
Minimum Inventory
Closed Loop MRP
Capacity Planning
Cost Reduction
Enterprise-wide Planning
Management Innovation
Inter-company Optimization
Win-Win-Win
Postech Strategic Management of Information Systems LAB

12. Functions of ERP ERP Product Development Process CAD/CAM PDM
Finance/
Accounting
Engineer-
ing
Sales/
Mktg
Supplier
Production
Logistics
Customer
Product Development Process
CAD/CAM
PDM
Drawing/Docu Mgmt
EC Mgmt
Configuration Control
Release Control
Order Fulfilment Process
Manufacturing Process
Management Process
Employee
MES
Finite Scheduling
Data Collection/POP
Facility Management
Quality Management FA
Postech Strategic Management of Information Systems LAB

13. Structure of ERP System
Supplier AR
Planning AP GL
Receiving
Shipping
Inventory
Manufacturing Plants
Distribution Centers
Product Life cycle
Engineering
Purchasing
Order Admin
Finance
Order
Entry
Shop Floor Control
PDM E D I . W e b FA
Customer
Postech Strategic Management of Information Systems LAB

14. Characteristics of ERP
BPR Tool
BPR Infrastructure
Data Integration
Single View of Distributed Systems
Communication Tool
Configuration Function
No Programming
Supporting Multi-language
BPR Enabler
Integration
Globalization
Enterprise
Real-time
Integration
Postech Strategic Management of Information Systems LAB