Zhukova Sofya Vitaljevna,

Zhukova Sofya Vitaljevna, zhukova.sofya@gsom.pu.ru
Topic 4. BPI and BPR Zhukova Sofya Vitaljevna, Good day ladies and gentleman. Today we will start our journey in BPM course. My name is Zhukova Sofya Vitaljevna, I am associate professor of information technologies in management department. In 2007, I defended my PhD thesis at Saint-Petersburg State Politechnical University on the faculty of Computer Science. It was dedicated to the multidisciplinary research that comprises results from Information Data processing Artificial Intelligence, Synegetics and Modeling. So I have a thorough IT background and is specialized in System Analysis that at the moment penetrates greatly into business activities, because in the circumstances of fast and constantly changing environment the cost of wrong decisions cannot be ignored and the tools that allow to minimize wastes of different kind cannot be overvalued. But about this a bit later. Let us get acquainted with each other. Here I have the preliminary results of your voting for this course. Lets make call the roll (Making Call the roll and handshakes). List of the names – файл names MIB BPM.xls So today I ask you to relax, because today we have an introduction meeting. I will tell you about the rules of the game named business process modeling, give some comments on the program, distributed among you, and that is of most important operate a tour that will help you to mark out the place of BPM in the general management theory and practice. This will take us the first two hours. Then we will speak about the history of the discipline and provide some hands-on work in order to understand the basics of a new scientific area. Is everything clear about the agenda. May be I missed something but you are willing to ask?

Approaches within BPM 2 FO BPO TQM BPI Six Sigma BPR
Business Process Reingineering Business Process Orientation FO BPO TQM BPI Six Sigma BPR Total Quality Management Business Process Improvement Functional Specialization

Business Process Management
… is a systemic, structured approach to analyze, improve, control, and manage processes with the aim of improving the quality of products and services. Business Process Management Life-Cycle: Process Design Business Process Management starts with the design of efficient core processes that forsee and overcome the hurdles that can be faced over the lifetime of a process. Business Process Management software systems are an important tool for the process design phase, allowing your resources to efficiently model and improve their process maps. Process Modeling Process Modeling takes the process design and introduces costs, resource use, and other constraints that will affect the process lifecycle. Oftentimes, process modeling incorporates process simulation and scenario analysis into the business process management implementation. Process Execution Buisness process management is about acheiving results. The ultimate goal of any process management intiative is to execute the process design with a high degree of accuracy. Using business process management workflow tools will help maintain this symmetry between execution and design by keeping employees engaged in process activities. Process Monitoring By monitoring your buisness process management processes, your company can track performance on a per-process basis. This allows your company to collect data on how processes can be improved. Process Optimization Business process management is about implementing constant improvements in the process structure that will result in greater efficiency and profit. The optimization phase of the process lifecycle drives performance and enhances all aspects of your business. 3

After Second World War: USA versus Japan and Europe
4 Demand for American goods was so high that corporations’ main concern was insufficient capacity. This meant there was little concern for product quality or catering to customer requirements. Consumers, starved of goods during the Depression and war years, bought anything American companies were selling. As trade barriers lowered in the 1970s, United States corporations began to find competition from European and Japanese companies both in domestic and export markets. Because of higher average income, consumers demanded more customized goods and services. They were no longer satisfied with whatever corporations sold them. Customers are also now demanding a satisfactory purchasing experience and customer service. Corporations that do not provide an easy buying experience risk exclusion from future sales. This increased competition and the resulting shift from the supplierdriven economy to a customer-driven economy have forced corporations to rethink their organizations and business practices.

Clients are unsatisfied
5 O. D. Power & Associates‘ 1989 survey For example, the performance of American automobiles improved 8 percent in Japanese cars improved 17 percent, and European cars improved 21 percent. Consider the results of a survey conducted in the United States and Japan:

Clients are unsatisfied
6 O. D. Power & Associates‘ 1989 survey For example, the performance of American automobiles improved 8 percent in Japanese cars improved 17 percent, and European cars improved 21 percent. Consider the results of a survey conducted in the United States and Japan:

Result versus Process 7 Japan is described as a process-oriented and people-oriented society whereas the U.S. is described as a results-oriented society. In a results-oriented society, only results count. In a process-oriented society, improvement efforts count. Results-oriented tends to focus only on the what, thus neglecting the how, while the process-oriented focuses on the how, neglecting the what. Both have demotivating and defocusing issues.

Business process orientation: Masaaki Imai
8 Masaaki Imai, a leading Tokyo-based management consultant, unequivocally stated at that time that “kaizen strategy is the single most important concept in Japanese management — the key to competitive success” (Imai,1986). Kaizen, as explained by Imai, is the overriding concept behind good management: a combination of philosophy, strategy, organization methods, and tools needed to compete successfully today and in the future. The philosophy component of kaizen is one of continuous improvement of everything, every day, and involving everyone. Imai proposes that the implementation of kaizen will lead to an organization with reduced conflict and improved connectedness across the departments of the firm.

a customer-driven improvement strategy;
Kaizen philosophy 9 recognizing that there are problems and establishing a corporate culture in which everyone can freely admit these problems; taking a systematic and collaborative approach to cross-functional problem-solving; a customer-driven improvement strategy; significant commitment and leadership of kaizen from top management; an emphasis on process and a process-oriented way of thinking; a management system that acknowledges people’s process-oriented efforts for improvement.

Business process orientation: William Deming
10 Deming, W. E. (1986) Out of the Crisis, MIT Press Edward Deming developed the “Deming Flow Diagram” depicting the horizontal connections across a firm, from the customer to the supplier, as a process that could be measured and improved like any other process. Deming began to introduce the statistical quality control methods he developed at the Census Bureau to industrial corporations. He gradually developed a prescriptive set of practices that have been labeled Deming’s 14 points.

Deming’s 14 points 11 Constant improvement of product and service
Adopt the new philosophy. Cease dependence on inspection to achieve quality. Move towards a single supplier for any one item, on a long-term relationship of loyalty and trust. improve quality and productivity, and thus constantly decrease cost. Institute training on the job. Institute leadership Drive out everyone’s fear Break down barriers between departments. Force asking for zero defects and new levels of productivity. Eliminate work standards (quotas) on the factory floor Remove barriers that rob the hourly worker of his right to pride of workmanship. Institute a vigorous program of education and self-improvement. Put everyone in the company to work to accomplish the transformation. Constant improvement of product and service Adopt the new philosophy. Cease dependence on inspection to achieve quality. Move towards a single supplier for any one item, on a long-term relationship of loyalty and trust. improve quality and productivity, and thus constantly decrease cost. Institute training on the job. Institute leadership Drive out everyone’s fear Break down barriers between departments. Force asking for zero defects and new levels of productivity. Eliminate work standards (quotas) on the factory floor Remove barriers that rob the hourly worker of his right to pride of workmanship. Institute a vigorous program of education and self-improvement. Put everyone in the company to work to accomplish the transformation.

Business process orientation: Kaoru Ishikawa
12 While Deming focused on organizational practice and behavior to achieve quality with his 14 points, Kaoru Ishikawa focused on the importance of senior management in quality improvement, and he extended quality improvement to the business processes. He introduced the concept of the quality circle organization, continuous improvement philosophy, and bottom-up analytical methods such as cause and effect diagrams.

Business process orientation: John Byrne
13 Business Week, December 13, 1993 John A. Byrne provided the popular foundation for this area of investigation when he described the old organizational model as a vertical organization, an organization whose members look up to bosses instead of out to customers. Too many layers of management still slow decision-making and lead to high coordination costs. The answer, said Byrne, is the horizontal corporation. The horizontal corporation is described as eliminating both hierarchy and functional boundaries and is governed by a skeleton group of senior executives that includes finance and human resources. Everyone else is working together in multidisciplinary teams that perform core processes such as product development.

Functional Corporations: Good management, bad quality
14 Adam Smith Henry Ford Frederick Taylor William Deming John Byrne, Kaoru Ishikawa Massaaki Imai Functional corporation Specialization increase quality Total Quality Management (TQM) Quality improvement

Cross Functional processes vs. Functional silos
15

Six Sigma 16 A Six Sigma is a business management strategy, originally developed by Motorola. Six Sigma seeks to identify and remove the causes of defects and errors in manufacturing. It uses a set of quality management methods, including statistical methods, and creates a special infrastructure of people within the organization. The path for Six Sigma to accomplish its goal is the Define, Measure, Analysis, Improve, and Control (DMAIC) methodology. Sigma is as much a corporate culture as it is a tool for process improvements. Recently, another Six Sigma methodology, Design for Six Sigma (DFSS), has gained popularity.

Six Sigma 17 The term "Six Sigma" is derived from a field of statistics known as process capability studies. Originally, it referred to the ability of manufacturing processes to produce a very high proportion of output within specification. Processes that operate with "six sigma quality" over the short term are assumed to produce long-term defect levels below 3.4 defects per million opportunities (DPMO). One Sigma = 690,000 DPMO = 31% efficiency Two Sigma = 308,000 DPMO = 69.2% efficiency Three Sigma = 66,800 DPMO = 93.32% efficiency Four Sigma = 6,210 DPMO = % efficiency Five Sigma = 230 DPMO = % efficiency Six Sigma = 3.4 DPMO = % efficiency

The empirical results of Six Sigma
18 GE cost savings from Six Sigma of $2 billion in 1999. Motorola - cost savings of $16 billion from Black & Decker cost savings of $60 million in 2000 Honeywell - cost savings of 3.5 billion from 1995 to 2001

Globalization and Internet era
19 Products Services The Forum Corporation reports that customers are five times more likely to switch to another supplier because of poor service than because of poor product quality or price issues. Customers will pay up to 30 percent more for an average product if they receive outstanding service from the organization. Throughout the 1980s, most companies focused their major efforts on correcting and improving their production processes. But then management realized that it had been working on the wrong part of the business. The production process for an average product accounts for less than 10 percent of the product value, and the service industry that provides most of our jobs is 100 percent business processes. For years we have focused our efforts on measuring, controlling, certifying, and correcting our production processes. As a result, business processes became the major cost factor in our companies.

Functional view and problems
20 The functional structure is positioned as having hand-offs between functions that are frequently uncoordinated. The functional structure also does not define complete responsibility and ownership of the entire process. People in functional silos focus on what is best for that function, many times at the expense of other functions. This means that while the individual function benefits, oftentimes the firm as a whole loses. Too often, what is being managed is power and authority, not the activities that bring value to the customer. Without changing our patterns of thought we will not be able to solve the problems we created with our current patterns of thought --- Albert Einstein

Business process orientation: Thomas Davenport
21 Davenport’s process approach implies adopting the customer’s point of view. A measure of customer satisfaction with the process output is probably the priority measure of any process. No one is managing the ship, only pieces of it. This is expensive, time consuming, and does not serve customers well. The solution proposed is that the interfaces between functional or product units be improved or eliminated, and sequential flows across functions be made parallel through rapid and broad movement of information.

Approaches comparison
22

Automation attack 23 The first rule of any technology is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency. (Bill Gates, Microsoft Corporation) The answer lies in Bill Gates’ observation. Automating something doesn’t fix its underlying problems; it just helps them to occur more quickly, in vastly increased numbers and at greater frequency. ‘Why don’t organizations fix their processes before they look to automation solutions?’

Business process orientation: Michael Hammer
24 "Reengineering Work: Don't Automate, Obliterate" by Michael Hammer Harvard Business Review, July-August 1990 Companies rarely achieve radical performance improvements when they invest in information technology. Most companies use computers to speed up, not break away from, business processes and rules that are decades, if not centuries, out of date. But the power of computers can be released by "reengineering" work: abandoning old ways of working and creating entirely new ones. Business process reengineering (BPR) involves the breaking of old, traditional ways of doing business and finding new and innovative ways. And from the redesigned processes, new rules will emerge that will determine how the processes will operate. The reengineering process is an all-or-nothing proposition, the results of which are often unknown until the completion of its course.

Business process orientation: James Harrington
25 Unfortunately, many businesses in the 1990s used the phrase "reengineering" as a euphemism for layoffs. Other organizations did not make radical changes in their business processes and did not make significant gains, and, therefore, wrote the process off as a failure. Yet, others have found that BPI is a valuable tool in a process of gradual change to a business. It should be noted that BPI focuses on "doing things right" more than it does on "doing the right thing". In essence, BPI attempts to reduce variation and/or wastage in processes, so that the desired outcome can be achieved with better utilization of resources. Business Process Improvement (BPI) is a systematic approach to help any organization optimize its underlying processes to achieve more efficient results.

Balancing People, Processes, and Technology
26 The triad formed by people, project management processes, and technology forms a system that must be in balance if projects are to have any reasonable chance of succeeding

Business Process Management Life-Cycle
27 Process Design Business Process Management starts with the design of efficient core processes Process Modeling Process Modeling takes the process design and introduces costs, resource use, and other constraints that will affect the process lifecycle. Process Execution Buisness process management is about acheiving results. The ultimate goal of any process management intiative is to execute the process design with a high degree of accuracy. Process Monitoring By monitoring BP, a company can track performance on a per-process basis. This allows your company to collect data on how processes can be improved. Process Optimization Business process management is about implementing constant improvements in the process structure that will result in greater efficiency and profit.

Iceberg syndrome 28 BPM is not a simple concept nor it is simple to implement – it is extremely complex and difficult. Iceberg typically only show about 10 percents of their mass above the water. BPM is often like an iceberg – people and organizations only see what is above the water. The interesting observation is that what appears above the surface depends upon the viewer’s perception. For example a vendor sees technology above the surface, a business analyst sees the processes, HR sees change management, IT sees the technology implementation, business management sees short-term gains (quick wins), cost reduction and simple measures of improvement and the project manager sees short-term completion of project tasks and the deliverables of the project. The reality needs not only to be addressed but also made visible to the organization. A ship could cruise very close to an iceberg on one side and not hit anything, and yet do the same on the other side and sink. The visibility of issues and activities is an important part of addresing them.

Approaches within BPM: from product management to service management
29 Business Process Reingineering Business Process Orientation FO BPO TQM BPI Six Sigma BPR Total Quality Management Business Process Improvement Functional Specialization

30 BPI vs BPM

A business revolution (1993)
31 “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.” Hammer & Champy, 1993

Reengineering the Corporation
Quotes from Hammer I 32 "American managers must abandon the organizational and operational principles and procedures they are now using and create entirely new ones.... Business reengineering means starting all over, starting from scratch.... It means forgetting how work was done.... Old job titles and old organizational arrangements cease to matter. How people and companies did things yesterday doesn't matter to the business reengineer .... Reengineering ... can't be carried out in small and cautious steps. It is an all-or- nothing proposition." Reengineering the Corporation

Quotes from Hammer II 33 "In this journey we'll carry our wounded and shoot the dissenters.... I want to purge from the business vocabulary: CEO, manager, worker, job." Forbes ASAP, Sept. 13, 1993 "It's basically taking an axe and a machine gun to your existing organization." Computerworld,Jan. 24, 1994 "What you do with the existing structure is nuke it!" Site Selection, February 1993 "Reengineering must be initiated by someone who has enough status to break legs." Planning Review, May/June 1993

Key Words 34 Dramatic Business Process
Reengineering should be brought in “when a need exits for heavy blasting.” Companies in deep trouble. Companies that see trouble coming. Companies that are in peak condition. Business Process a collection of activities that takes one or more kinds of inputs and creates an output that is of value to a customer. 5

expect us to know everything to make the right decisions
Customer demand 35 expect us to know everything to make the right decisions to do it right now to do it with less resources to make no mistakes expect to be fully informed

Why Reengineer? Customers Demanding Sophistication Changing Needs
36 Customers Demanding Sophistication Changing Needs Competition Local Global Change Technology Customer Preferences

BPR may sometimes be mistaken for the following:
BPR is Not? 37 BPR may sometimes be mistaken for the following: Automation is an automatic, as opposed to human, operation or control of a process, equipment or a system; or the techniques and equipment used to achieve this. Automation is most often applied to computer (or at least electronic) control of a manufacturing process. Downsizing is the reduction of expenditures in order to become financial stable. Those expenditures could include but are not limited to: the total number of employees at a company, retirements, or spin-off companies.

BPR is Not? 38 Outsourcing involves paying another company to provide the services a company might otherwise have employed its own staff to perform. Outsourcing is readily seen in the software development sector. Continuous improvement emphasizes small and measurable refinements to an organization's current processes and systems. Continuous improvements’ origins were derived from total quality management (TQM) and Six Sigma.

Reengineering & Continuous Improvement--Similarities
39 Reengineering Continuous Improvement Similarities Basis of analysis Process Process Performance measurement Rigorous Rigorous Organizational change Significant Significant Behavioral change Significant Significant Time investment Substantial Substantial 16

Reengineering & Continuous Improvement--Differences
40 Reengineering Continuous Improvement Differences Level of change Radical Incremental Starting point Clean slate Existing process Participation Top-down Bottom-up Typical scope Broad, cross-functional Narrow, within functions Risk High Moderate Primary enabler Information technology Statistical control Type of change Cultural and structural Cultural 17

Business process orientation: James Harrington
41 Unfortunately, many businesses in the 1990s used the phrase "reengineering" as a euphemism for layoffs. Other organizations did not make radical changes in their business processes and did not make significant gains, and, therefore, wrote the process off as a failure. Yet, others have found that BPI is a valuable tool in a process of gradual change to a business. It should be noted that BPI focuses on "doing things right" more than it does on "doing the right thing". In essence, BPI attempts to reduce variation and/or wastage in processes, so that the desired outcome can be achieved with better utilization of resources. Business Process Improvement (BPI) is a systematic approach to help any organization optimize its underlying processes to achieve more efficient results. 41

AS-IS and TO-BE models 42 A model of today’s business is often called an as-is model, to contrast with a model of a desired future situation, a to-be model. The terms “as-is” and “to-be” work for all business modeling disciplines. An as-is organization model and a to-be organization model show today and tomorrow for the organization. It is common to have a single as-is process model and several different to-be process models. Several alternatives are evaluated to decide which is the best business processes for the future. Bridgeland, p.135

Techniques for Modeling the As-Is Process
43 To build an as-is model we have to: Build the team; Organize and initiate the modeling session; Develop RD; Develop CFD. Alec Sharp p.130 Now that we understand the theory (rules and conventions), we can move into the practice— how to actually build an as-is workflow model. You need techniques to get started (which is often the hardest part), to maintain progress (avoiding inappropriate detail and distractions), and to validate the model. It’s not as simple as just grabbing a pen and starting a diagram. We will progress through: 1. Building the team; 2. Organizing and initiating the modeling session; 3. Getting started by building the handoff (level 1) model; 4. Adding detail with a flow (level 2) model; 5. As necessary, developing a task (level 3) model, and even doing some task analysis if the situation warrants it.

Difficulties with As-Is Modeling
44 Possible problems: . Securing or coordinating participation, and dealing with “mystery areas”; Applying a process orientation when it is not appropriate, and vice versa; Facilitation or modeling issues arising during the session; The role of systems in a process model; Disagreements and multiple process versions. Alec Sharp p.143 Difficulties with As-Is Modeling As-is modeling: tips, tricks, and traps Unfortunately, modeling the as-is process doesn’t always sail along smoothly. While preparing for the process modeling session, or even worse, during the session, certain problems just keep coming up. You will encounter them, since clients, associates, and students report the same experiences and concerns. This chapter will arm you with some defense strategies—it is a bit of a grab bag of issues and approaches arranged under five broad topics: 1. Securing or coordinating participation, and dealing with “mystery areas”; 2. Applying a process orientation when it is not appropriate, and vice versa; 3. Facilitation or modeling issues arising during the session; 4. The role of systems in a process model; 5. Disagreements and multiple process versions.

As-Is model analysis – not only improve
45 Drop/abandon: This process is not necessary, or the benefit will never justify the cost. It is rare, but we had a case where a software license validation process cost several hundred thousand dollars per year and consumed skilled resources, but delivered no benefit (never uncovered problems). The company decided to abandon the process rather than reengineer it. Outsource: It would be a more effective use of resources to have a supplier carry out the process. Traditionally, this has been the choice for generic, infrastructure activities such as cleaning and catering. Leave as is: The process is fine; the issues were elsewhere (e.g., no one follows the process, or training is needed). Apply the 10% rule: if the new process will not be at least 10%, better leave it alone. Improve: The basic structure of the process is okay, but specific improvements are possible. Redesign: The process should be fully redesigned. Alec Sharp p.153 Decide on approach Before going any further, take some time to decide if you need to. Go further, that is. The future of the process is not necessarily that it will be redesigned. There are five possible courses of action: • Drop/abandon: This process is not necessary, or the benefit will never justify the cost. It is rare, but we had a case where a software license validation process cost several hundred thousand dollars per year and consumed skilled resources, but delivered no benefit (never uncovered problems). The company decided to abandon the process rather than reengineer it. (Technically, this is the ultimate in reengineering.) • Outsource: It would be a more effective use of resources to have a supplier carry out the process. Traditionally, this has been the choice for generic, infrastructure activities such as cleaning and catering. Companies are increasingly doing this in areas such as billing, receivables, help desk, network operations, PC support, and so forth. • Leave as is: The process is fine; the issues were elsewhere (e.g., no one follows the process, or training is needed). Apply the 10% rule: if the new process will not be at least 10%, better leave it alone. • Improve: The basic structure of the process is okay, but specific improvements are possible. • Redesign: The process should be fully redesigned.

Goals of creating TO-BE models
46 The primary goals of “Characterizing and Designing the To-Be Process” are: . Produce a description of the important characteristics of the to-be process in terms of the process enablers—workflow design, IT, motivation and measurement, and so forth. Collectively, these are the specifications for the new process. Develop swimlane diagrams at increasing levels of detail (handoff, flow, etc.) depicting the process workflow that supports the desired characteristics of the process or processes. One way to look at this is that we’re starting with conceptual process design—we will identify the main concepts and characteristics of the new process, and only then do we perform detailed process design by specifying the workflow. Goals The primary goals of “Characterizing and Designing the To-Be Process” are: • Produce a description of the important characteristics of the to-be process in terms of the process enablers—workflow design, IT, motivation and measurement, and so forth. Collectively, these are the specifications for the new process. • Develop swimlane diagrams at increasing levels of detail (handoff, flow, etc.) depicting the process workflow that supports the desired characteristics of the process or processes. One way to look at this is that we’re starting with conceptual process design—we will identify the main concepts and characteristics of the new process, and only then do we perform detailed process design by specifying the workflow.

Techniques to build TO-BE process model
47 Brainstorming. Find the bottlenecks. Find the redundant activities. Find the activities that can be performed simultaneously Find the non value added activities and try to reduce the number. Sometimes it is important to expand the set of activities in order to reduce the time of service. Sometimes it is impossible to reduce time and cost expenses at the same time.

Any process can be modeled with three types of routing. Sequential
Routing of tasks 48 Any process can be modeled with three types of routing. Sequential Parallel Conditional Iterative

Routing of tasks (continued)
49 Sequentional Parallel

Routing of tasks (continued)
50 Conditional Iterative

As-Is process model example – What’s wrong here?
51 Bridgeland p.127, p.128 Let’s look at an example of an as-is process. Figure 5.24 shows a single as-is process: the subprocess for seating customers. The as-is process is purely manual; No technology supports the host in her job of seating the customer. A dining party waits until a table is available, and they either check periodically with the host or just wait until the host informs them that a table is available. Studying the as-is process provides an understanding of how work is performed today as well as some insight into problems. For example, when a table is not available, the dining party waits in the Wait for Table activity. For some customers, this is an anxious wait because they are unsure whether they have been forgotten.

As-Is process: anxious customers
52 Let’s look at an example of an as-is process for seating customers. The as-is process is purely manual - no technology supports the host in her job of seating the customer. A dining party waits until a table is available, and they either check periodically with the host or just wait until the host informs them that a table is available. Studying the as-is process provides an understanding of how work is performed today as well as some insight into problems. For example, when a table is not available, the dining party waits in the Wait for Table activity. For some customers, this is an anxious wait because they are unsure whether they have been forgotten.

TO-BE process model example
53 At some family-oriented Mykonos restaurants, pagers are provided to waiting diners. Pagers make the waiting less anxious for some diners, because they do not have to periodically ask the host if they have been forgotten. Diners have a feeling of assurance that they are queued in a system, and they can relax and enjoy waiting for their pager to buzz. Figure 5.25 shows a revised Seat Party subprocess, incorporating activities that use a paging system. Figure 5.25 is a to-be process, one potential future. When a dining party is asked to wait in Ask Party to Wait, they are given a pager. At any point the party might choose to leave. If they leave they return the pager. If they stay, when the pager notifies them that a table is available, they return the pager, the host assigns the table and the diners are seated. By comparing the to-be process of Figure 5.25 with the as-is process of Figure 5.24, we can see which activities are performed differently and which new activities are needed.

To-Be process: anxious customers
54 At some family-oriented Mykonos restaurants, pagers are provided to waiting diners. Pagers make the waiting less anxious for some diners, because they do not have to periodically ask the host if they have been forgotten. Diners have a feeling of assurance that they are queued in a system, and they can relax and enjoy waiting for their pager to buzz. To-be variant of process incorporates activities that use a paging system. When a dining party is asked to wait in Ask Party to Wait, they are given a pager. At any point the party might choose to leave. If they leave they return the pager. If they stay, when the pager notifies them that a table is available, they return the pager, the host assigns the table and the diners are seated. By comparing the to-be process with the as-is process we can see which activities are performed differently and which new activities are needed.

Redesigning Little Italy Restaurants a case study by Ned Kock

Little Italy Restaurants
56 Started with one restaurant Grew into a chain of 30 independent restaurants with their own kitchens Kitchens were later re-modeled so their size was reduced Dish preparation was centralized Restaurant Restaurant Restaurant Food items Food items Food items Restaurant Central kitchen Start

-In 40% of the deliveries, food items arrive late.
The problems 57 Problems: -In 40% of the deliveries, food items arrive late. -In 20% of the deliveries, food items go to wrong restaurants. -60% of the orders for food items are only partially fulfilled. Restaurant Restaurant Restaurant Food items Food items Food items Restaurant Central kitchen Goal: Bring all the percentages above down to 5%.

Diagram 1 Issue FIRF (Kitchen’s manager) 1 Assistant manager
Restaurant manager -Food items -FIRF1 -Food items Check FIRF (Assistant manager) 2 Chef FIRF1s -FIRF2 -FIRF1 -FIRF2 Completed orders Schedule production (Chef) 3 -FIRF2 FIRF2s -Completed order details Sign FIRF3 (Assistant manager) -FIRF2 5 -FIRF3 4 -FIRF2 Coordinate food production (Chef) Ordered FIRF2s -FIRF4 -Delivery details 6 Restaurant manager -Upcoming deliveries Plan delivery (Delivery team) -Delivery details 7 FIRF1s = Unchecked FIRFs, with data received from restaurants FIRF2s = Checked and priority-coded FIRFs FIRF3s = Ready-marked FIRFs FIRF4s = Signed FIRFs, referring to completed orders Make delivery (Delivery team) -Delivery plan

Foster asynchronous communication
Eliminate the synchronous “food items request” interaction between restaurant manager and kitchen’s manager, by allowing the restaurant manager to enter food items directly into a “food items requests” data store.

Eliminate duplication of information
Eliminate the “completed orders” data store, by making “food items requests” a static data store.

Reduce information flow
63 Eliminate data flows between two process functions and themselves: Assistant manager storing unchecked FIRFs (or FIRF1s) for later use. Chef storing FIRF2s for later use, and chef storing ordered FIRF2s for later use.

Reduce control 65 Eliminate the “check FIRF” activity (conducted by the assistant manager) and “sign FIRF3” activity (conducted by the assistant manager). These are unnecessary control activities that just delay process execution.

Redesigned process Note: The diagram above assumes that a computer
Restaurant manager 1 Coordinate food production (Chef) -FIR -Food items -FIR completion status Food items requests -FIRs to be delivered -Delivery details 2 Make delivery (Delivery team) -FIR delivery status Note: The diagram above assumes that a computer system will: (a) Schedule production, (b) Schedule delivery.

Process implementation
Restaurant manager PC connected to the Internet through a Web browser Web server running a restaurant management system Internet -Food items -Food items -FIR completion status -FIR -FIRs to be delivered Chef -FIR delivery status Requested food items Kitchen staff Delivery team Final slide

Examining scenarios – WHAT-IF table
69 KPIs

TO-BE MODEL 70 TO-BE model is an improved model – result of business process mapping and analysis activities (as a rule the result of at least three alternatives analysis). It is important to specify KPI improvement associated with new way of doing things. TO-BE model is the basis for further automation (if needed).

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