Chapter 7 – Process Redesign

1. Process Redesign
A. The essence of process redesign
B. Transactional methods
C. Transformational methods

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 The BPM Lifecycle

The BPM Lifecycle

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 The essence of process redesign

Why process redesign?

➢ Although one could argue that a well-designed process at the first time will (continue
to) lead to positive outcomes (value), the fact is that both the internal and external
environments of organizations change:
➢ Organizations are organic in nature. Thus, all processes will evolve organically with time.
This is a reason to conduct redesign because, usually people who are busy in operational
tasks are unable to assess processes with a critical and comprehensive perspective;
➢ Even if a process was perfectly designed at the beginning, the external environment of firms
(i.e., the world) also changes. This applies to competitors, customers’ needs, technological
breakthroughs, etc.

➢ Question: Can you think in a process experience that may eventually have been
effective in the past, but that now is not?

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Questions
Which of the following would you consider a redesign activity? (Dumas et al., 2013)
➢ 1. An airline has seen its profits falling over the past year. It decides start a marketing campaign
among its corporate clients in the hope that it can extend its profitable freight business.
➢ 2. A governmental agency notices that it is structurally late to respond to citizen’s queries. It
decides to assign a manager to oversee this particular process and mandates her to take
appropriate counter actions.
➢ 3. A video rental company sees that its customer base is evaporating. It decides to switch to the
business of promoting and selling electronic services through which clients can see movies on-line
and on-demand.
➢ 4. A bank notices internal conflicts between two different departments over the way mortgage
applications are dealt with. It decides to analyze the role of the various departments in the way
applications are received and handled to come up with a new role structure.
➢ 5. A clinic wants to introduce the one-stop-shop concept to improve over the situation that its
patients need to make separate appointments for the various diagnostic tests that are part of a
procedure for skin cancer screening.

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 The essence of process redesign

What is process redesign?

➢ Identify possibilities for improving the design of a process;
➢ There is no magic solution;
➢ Redesign heuristics can be used.

AS-IS: Descriprive modelling TO-BE: Prescriptive modelling

of the real world of the real world

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Process redesign suitability

Not every areas of activities are equally suitable for redesign initiatives. One clear
example may be the contrast between services and manufacturing organizations:
• In producing a new product;
• In inventory management;
• In the importance of the order that tasks are performed;
• In measuring quality;
• In quality’s variance; or
• In transportation.

It is clear that more ‘degrees of freedom’ exist in redesigning processes in the area of
services.

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Process redesign’s goals

Question: What do we want to achieve exactly when a process is redesigned?

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“The Devil’s Quadrangle”

Cost
•
•
•

Time
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•
•
•
Flexibility
•

•
•
•
Quality •
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 The essence of process redesign

Time
➢ Cycle Time (service, transportation, waiting)
➢ Time measure (average, Variance/stability/predictability, service level agreement fulfillment)

Quality
➢ Of Product (fulfill customers’ expectations)
➢ Of Processes (data and documents, decisions, timely and correct feedback provided to
customers)

Cost
➢ Nature of cost (fixed or variable, per time, per use –consumption-, human resources, systems’,
and external)

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Flexibility
➢ Ability to react to changes in:
➢ Workload
➢ Customer demands and expectations
➢ Resource and business partner availability and performance
➢ Example: Following natural disasters (e.g. storms), the number of home insurance
claims increases by tenfold.
➢ To address this surge, flexibility is required at:
➢ Resource level: Staff redeployment, faster performance
➢ Process level: Performing tasks differently to speed up the front-end
➢ Management: Relaxing business rules and controls where possible

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Process redesign approaches

Explorative Redesign (transformational) - Older
➢ Puts into question the fundamental assumptions and principles of the existing process
structure
➢ Aims to achieve breakthrough innovation
➢ Example: Business Process Reengineering (BPR) – “Obliterate, don’t automate”

Exploitative Redesign (transactional) - Newer

➢ Doesn’t put into question the current process structure
➢ Seeks to identify problems and resolve them incrementally, one step at a time
➢ Example: Heuristic redesign

Start from a reference-model (Common in consultancy)

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Heuristics
➢ Transactional: changes the “as is” process incrementally;
➢ Inward-looking: operates within the scope and context of “as is” process;
➢ Analytical: based on redesign heuristics that strike tradeoffs between:
➢ Cost
➢ Time
➢ Quality
➢ Flexibility

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Heuristics
A heuristic can be seen as a rule of thumb for redesigning (thus having) a different
process. Many of the heuristics we present suggest a particular action to take, while
others merely indicate the dimension along which a business process can be changed.

As heuristics, most are based on past experience in process redesign projects.

Heuristics are classified in three categories (other classifications exist thought):

➢ At task-level;

➢ At flow-level;

➢ At process-level.

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Redesign heuristics
➢ Task-level:
1. Elimination;
2. Composition or decomposition;
3. Triage.
➢ Flow-level: Each Heuristic improve
one dimension(s) at the
4. Re-sequencing;
expense of other(s).
5. Parallelism enhancement.
➢ Process-level:
6. Specialization and standardization;
7. Resource optimization ;
8. Communication optimization;
9. Automation.

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Heuristics for task-level redesign

1. Task elimination
2. Task composition/decomposition (deleting/merging or adding/splitting)
3. Triage

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Heuristics 1 - Task elimination

➢ Eliminate non-value-adding steps wherever these can be isolated
➢ Forward, send, receive, …
➢ Consider reducing manual control steps (checks & approvals) by:
➢ Skipping them when possible;
➢ Use statistical controls as alternative to the deleted tasks;
➢ Skip them sometimes, i.e., giving some criteria or rules (e.g., datamining techniques).

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control

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Heuristics 1 - Task elimination

Consider trade-off between the cost of the check and the cost of not doing it
➢ Examples:
➢ Procure-to-pay process: some types of employees are empowered to trigger isolated
purchases below a specific amount without supervisor approval;
➢ Order-to-cash process: invoices from trusted suppliers under a threshold are not checked on
a one-by-one basis; or
➢ University admission process: authenticity check is very expensive, yet it leads to only 1% of
applications being rejected.
Cost

Time

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Heuristics 2 - Task composition or decomposition

➢ Contemplate composing two or more tasks to eliminate transportation and reduce
“context switches”, or
➢ Ponder divide a task into two or more and assign separate and specialized resources to
each.

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 Transactional Process Redesign

Heuristics 2 - Task composition

➢ Composition examples:
➢ Procure-to-pay process: Merging two checks: “Check necessity of purchase” and “Check
budget”

Cost

Time
Flexibility

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Heuristics 2 - Task decomposition

➢ Decomposition examples:
➢ Make-to-order process: Separate a single thick “prepare quote” task into “prepare bill of
materials”, “prepare production plan” and “estimate costs and delivery time”

Cost

Time
Flexibility

Quality

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Heuristics 3 - Triage
➢ Specialize a task: divide a general task into two or more alternative tasks
➢ Generalize tasks: integrate two or more alternative tasks into one general task

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Heuristics 3 - Triage
➢ Specialization example:
➢ Procure-to-pay process: Separate approvals of small purchases, medium purchases and large
purchases

Cost

Time
Flexibility

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Heuristics 3 - Triage
➢ Generalization example:
➢ Make-to-order process: Integrate quote preparation for two product lines into one single
task

Cost

Time
Flexibility

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Flow-level redesign heuristics

4. Re-sequencing
5. Parallelism enhancement

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Heuristics 4 – Re-sequencing
➢ Re-order tasks according to their cost/effect ratio to minimize over-processing
➢ Postpone expensive tasks that may end up not being necessary until the end
➢ Put knock-out checks first in order to identify problems early

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Heuristics 4 – Re-sequencing
➢ Examples:
➢ Make-to-order process: If “Prepare production plan” is time-consuming, postpone it until
after the quote price has been accepted by the customer;
➢ Procure-to-pay process: If “Check necessity of purchase” leads to 20% of knock-outs and
“Check budget” leads to 2%, perform “Check necessity of purchase” first to reduce over
processing;
➢ University admission process: authenticity check (very slow) leads to 1% of applications
being rejected while committee’s check leads to 80% of applications being rejected. Put
committee’s check first for the same reason as the previous example.
Cost

Time
Flexibility

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Heuristics 5 – Parallelism enhancement

➢ Parallelize tasks where possible in order to reduce cycle time

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Heuristics 5 – Parallelism enhancement

➢ Example:
➢ Procure-to-pay process: Parallelize “Approve budget” and “Approve necessity of purchase”;
➢ Make-to-order process: After “Prepare bill of materials”, perform “Prepare production plan”
and “Estimate costs” in parallel.

Cost
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Flexibility

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Process-level redesign heuristics

6. Process specialization & standardization
7. Resource optimization
8. Communication optimization
9. Automation

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Heuristics 6 – Process specialization/standardization

➢ Process specialization (two different people will now manage the process)
➢ One process is split into multiple ones: by customer class, by geographic location, by time
period (winter, summer), etc.;
➢ Resources are split accordingly.

➢ Process standardization/unification (very comment in merges/fusions)

➢ Two processes are unified;
➢ Resources are pooled together.

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Heuristics 6 – Process specialization/standardization

➢ Specialization example:
➢ Procure-to-pay process: One process for Direct procurement (e.g. raw materials) and one for
indirect procurement (MRO - Maintenance, Repair and Operations);
➢ Claims handling process: One claims handling process for the winter season (stormy season -
peak) and one for the summer season (off-peak).

Cost

Time
Flexibility

Quality
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Heuristics 6 – Process specialization/standardization

➢ Standardization example:
➢ Claims handling process: Integrate claims handling for motor insurance across different
brands of a group.

Cost

Time
Flexibility

Quality
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Heuristics 7 – Resource optimization

➢ Use resources of a given type as if they are together (BPR #5):
➢ Avoid one group of people overloaded and another (similar) group idle.

➢ Let people do work that they are good at - specialization:

➢ However, avoid inflexibility as a result of specialization.

➢ When allocating work to resources, consider the flexibility in the near future:
➢ Allocate work first to specialized or generic resources?

➢ Avoid setups as much as possible:

➢ Chain multiple instances of the same task [sequential];
➢ Batch multiple instances of the same task [parallel].

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Heuristics 7 – Resource optimization

➢ Resource integration example:
➢ Claims handling process: Share resources across different types of claims;
➢ Batching example:
➢ Claims handling process: Batch all claims for a given geographic area and assign them to the
same resources;
➢ University admission process: Batch all applications and handle them to the assessment
committee.

Cost

Time
Flexibility

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Heuristics 8 – Communication optimization

➢ Automate handling, recording and organization of messages;
➢ Monitor customer interactions, record exceptions;
➢ Optimize:
1. Number of interactions with customers and business partners (usually decrease);
2. Type of interaction (synchronous vs. asynchronous);
3. Timing of interactions.

Cost

Time
Flexibility

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Heuristics 8 – Communication optimization

1. Optimize number of interactions
➢ Gather sufficient information to get to the next milestone (reduce external interactions)
2. Optimize type of interaction
➢ Synchronous interactions are better to solve minor issues
➢ Asynchronous to notify, inform, resolve major issues, or request additional information to
reach next milestone
3. Optimize timing of interactions:
➢ Front-loaded process: bulk of information exchange and processing happens upfront
(information gathered at the start). E.g., government entities;
➢ Back-loaded process: bulk of information exchange and processing happens downstream
(information gathered at the end). E.g., Ford’s case study.

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Heuristics 8 – Communication optimization

Front-loaded process
➢ Complete-Kit Concept: “Work should not begin until all pieces necessary to complete
the job are available” (Boaz Ronen)
➢ Principles for complete-kit process design:
1. Provide complete and easy-to-follow instructions for those who will initiate the process.
2. If a process cannot start, the client should be notified of all defects that could be reasonably
identified at the onset of the process
3. Consider the tradeoff between “incomplete-kit” process initiation vs. roundtrip to revise
and resubmit a request

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Heuristics 9 – Automation
➢ Data sharing (Intranets, packaged enterprise systems) to:
➢ Increase availability of information to improve visibility and decision-making (subject to
security/privacy requirements)
➢ Avoid duplicate data entry and transportation
➢ Network technology to:
➢ Replace physical flow (e.g. paper documents) with information flow
➢ Enable self-service via e.g. online forms and Web data services

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Heuristics 9 – Automation
➢ Tracking technology to identify and locate materials and resources
➢ Identification: Bar code, RFID
➢ Location: GPS, indoor positioning
➢ Business rules technology to automate information processing tasks (including
decisions)
➢ Automate end-to-end processes with a dedicated BPM system or system with process
automation functionality

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Heuristics 9 – Automation
➢ Example:
➢ The insurance company could send a request via email, or there is a self-service portal or the
insurance company accessing the hospital database directly (with certain restrictions).

Cost

Time
Flexibility

Quality
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Summary

Level Heuristic Description Time Cost Quality Flexibility

1 Task elimination Improves Ambiguous Worsens No effect
Task composition Improves Ambiguous No effect Improves
2
Task Task decomposition Worsens Ambiguous No effect Worsens
Triage - Specialization Improves Ambiguous No effect Worsens
3
Triage - Generalization Worsens Ambiguous No effect Improves
4 Re-sequencing Improves Improves No effect No effect
Flow
5 Parallelism enhancement Improves Ambiguous No effect No effect
Process specialization No effect Ambiguous Ambiguous Worsens
6
Process standardization No effect Ambiguous Ambiguous Improves
Process 7 Resource optimization Improves Improves No effect Ambiguous
8 Communication optimization Improves Ambiguous Ambiguous Worsens
9 Automation Improves Ambiguous Ambiguous Worsens

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Heuristics example on BuildIT

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Heuristics example on BuildIT

H1

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Heuristics example on BuildIT

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Heuristics example on BuildIT

H2

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Heuristics example on BuildIT

H6

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Heuristics example on BuildIT

H8

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To-be process model

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Heuristics example on BuildIT

➢ Heuristic 9: Process automation
➢ Use self-service for the equipment search and availability checking
H9

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Heuristics example on BuildIT

➢ Heuristic 9: Process automation
➢ Use self-service for the equipment search and availability checking;
➢ Use process automation to coordinate handovers.

Process Support System

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Heuristics example on BuildIT

➢ Heuristic 1 (Task elimination)
➢ I1. Eliminate request for approvals for small equipment;
➢ I2. Replace approval with empowerment & stat. controls.
➢ Heuristic 2 (Task composition/decomposition)
➢ I3. Compose equipment selection, availability check and rental request creation;
➢ Heuristic 6 (Process specialization/standardization)
➢ I4. Separate process for small vs. large equipment, streamline “small” process.
➢ Heuristic 8 (Communication optimization)
➢ I5. Inform site engineer when equipment dispatched;
➢ I6. Ask site engineer if extension required.
➢ Heuristic 9 (Process automation)
➢ I7. Use self-service for equipment search and availability checking;
➢ I8. Use process automation to coordinate handovers.
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Pick chart for redesign prioritization

Impact
BIG SMALL
payoff payoff
Implement Possible
Statistical Eliminate
EASY controls approvals for
small
to implement
equipment
Difficulty

Combine
tasks

Challenge Kill
Automate
HARD
to implement Specialize
Inform

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 Transformational Process Redesign

Five principles of Business Process Reengineering (BPR)

1. Capture information once and at the source;
2. Include information-processing work into the real work that produces the information;
3. Have those who use the output of the process drive the process;
4. Put the decision point where the work is performed, and build control into the process
5. Treat geographically dispersed resources as though they were in the same place.

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Business process reengineering (BPR)

➢ Michael Hammer’s (1990) The Ford’s case study.

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Business process reengineering (BPR) – As-is Model

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Business process reengineering (BPR) – As-is Model

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Business process reengineering (BPR) – As-is Model

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Business process reengineering (BPR) – As-is Model

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Business process reengineering (BPR) – As-is Model

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Business process reengineering (BPR) – As-is Model

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Business process reengineering (BPR) – To-be Model

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Business process reengineering (BPR) – To-be Model

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Business process reengineering (BPR) – To-be Model

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Business process reengineering (BPR) – To-be Model

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Business process reengineering (BPR) – To-be Model

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Business process reengineering (BPR) – To-be Model

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Five principles of BPR

1. Capture information once and at the source
2. Subsume information-processing work into the real work that produces the
information
3. Have those who use the output of the process drive the process
4. Put the decision point where the work is performed, and build control into the process
5. Treat geographically dispersed resources as though they were centralized.

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BPR – 1st Principle

Capture information once and at the source
➢ Shared data store
➢ All process workers access the same data;
➢ Don’t send around data, share it!
➢ Self-service
➢ Customers capture data themselves;
➢ Customers perform tasks themselves (e.g.
collect documents).

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BPR – 2nd principle

Include information-processing work into the real work
➢ Evaluated receipt settlement: when receiving the products, record the fulfillment of the PO,
which triggers payment;

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BPR – 3rd principle

Have those who use the output of the process drive the process
➢ Vendor-managed inventory
➢ Scan-based trading
➢ Push work to the actor that has the incentive to do it

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Example: Insurance claims’ handling process

Authorize

Pay

Claim
Client Insurer

Request quote
Approved
Pay glass
vendor

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Example: Insurance claims’ handling process

Client Insurer

Claim Pay

Drop Approved
glass
vendor

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BPR – 4th principle

Put the decision point where the work is performed, and build control into the process
➢ Empower the process workers;
➢ Provide process workers with information needed to make decisions themselves;
➢ Replace back-and-forth handovers between workers and managers
(transportation waste) with well-designed controls.

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Example: Equipment rental process

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Self-service-based redesign
➢ 1st and 2nd principles
➢ When equipment is needed, site engineer queries the suppliers’ catalogue, selects
equipment and triggers PO.

➢ 3rd principle
➢ Supplier stocks frequently used equipment at construction site, site engineers scan to put
them into use.

➢ 4th principle
➢ Site engineer is empowered with the authority to rent the equipment; works engineer
performs statistical controls.

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BPR – 5th principle

Treat geographically dispersed resources as though they were centralized.
➢ If same people perform the same function in different locations, integrate and share their work wherever
possible;
➢ Larger resource pools -> fewer waiting times even with relatively high resource utilization.

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Summary

Principle Description

1 Capture information once and at the source

2 Include information-processing work into the real work

3 Have those who use the output of the process drive the process
Put the decision point where the work is performed, and build control into the
4
process
5 Treat geographically dispersed resources as though they were centralized

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 Bibliography

References:
1. Dumas, M., Rosa, M. L., Mendling, J., & Reijers, H. A. (2013). Fundamentals of
Business Process Management pp 253-278. Springer Berlin Heidelberg.
2. Dumas, M., Rosa, M. L., Mendling, J., & Reijers, H. A. (2013). Fundamentals of
Business Process Management 2nd Edition pp 297-338. Springer Berlin Heidelberg.
3. Michael Glykas (Ed.) (2013). Business Process Management: Theory and
Applications. Springer Berlin Heidelberg.
4. vom Brocke, J., & Mending, J. (Ed.) (2018). Business Process Management Cases:
Digital Innovation and Business Transformation in Practice. Springer Berlin
Heidelberg.

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