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BPR/ERP
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 . 1990
Postech Strategic Management of Information Systems LAB
Fundamental Concept of BPR
Process
Shift from function based thinking to
process based thinking
Fundamental
Fundamental rethinking of the way of
conducting business
Radical
Disregarding all existing structures and
inventing complete new ways –not
improvement or modification
Dramatic
Making quantum leaps in performance
rather than incremental improvement
Postech Strategic Management of Information Systems LAB
Why BPR?
Globalization !
Customer
Driven
Innovation
Core
Competence
Customer
Competition
Change
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
Input
Activity
Activity
Activity
Output
Customer
Process
Postech Strategic Management of Information Systems LAB
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
BPR
Principles
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
Postech Strategic Management of Information Systems LAB
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
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
BPR VS. Other Programs
Reengineering
Rightsizing
Restructuring
TQM
Automation
Fundamental
Staffing
Reporting
Relationships
Customer
Wants and
Needs
Technology
Applications
Scope of
change
Radical
Staffing, Job
Responsibiliti
es
Organizations
Bottom-up
Systems
Orientation
Processes
Functional
Functional
Processes
Procedures
Improvement
Goals
Dramatic
Incremental
Incremental
Incremental
Incremental
Assumptions
Questioned
Postech Strategic Management of Information Systems LAB
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
Advanced
Process
Information
Technology
ERP
BPR
Process
Innovation
Postech Strategic Management of Information Systems LAB
Development of ERP
Inter-company Optimization
Win-Win-Win
Enterprise-wide Planning
Management Innovation
Closed Loop MRP
ERP
Capacity Planning
Cost Reduction
Material Planning
Minimum Inventory
MRP
(Material
Requirement
Planning)
1970’s
MRPII
(Manufacturing
Resource
Planning)
1980’s
SCM
(Supply Chain
Management)
(Enterprise
Resource
Planning)
1990’s
2000’s
Postech Strategic Management of Information Systems LAB
Functions of ERP
ERP
Product Development Process
CAD/CAM
PDM
Drawing/Docu Mgmt
EC Mgmt
Configuration Control
Release Control
Finance/
Accounting
Employee
Management Process
Engineering
Logistics
Manufacturing Process
Customer
Sales/
Mktg
Production
MES
Finite Scheduling
Order Fulfilment Process
Data Collection/POP
Supplier
FA
Facility Management
Quality Management
Postech Strategic Management of Information Systems LAB
Structure of ERP System
Product Life cycle
PDM
Supplier
Engineering Purchasing
E
D
I
.
W
e
b
Order Admin
Planning
Finance
Manufacturing Plants
Distribution Centers
Planning
Planning
Order
Entry
Order
Inventory
Shipping
Receiving
Order
Entry
Order
Inventory
Shipping
Receiving
Shop Floor Control
AP
GL
AR
AP
GL
AR
E
D
I
.
W
e
b
Customer
FA
Postech Strategic Management of Information Systems LAB
Characteristics of ERP
 BPR Enabler
 BPR Tool
 BPR Infrastructure
Enterprise
Real-time
Integration
 Integration
 Data Integration
 Single View of Distributed
Systems
 Communication Tool
 Globalization
 Configuration Function
 No Programming
 Supporting Multi-language
Postech Strategic Management of Information Systems LAB