What Is Business Analysis?

- Process, Methods & Example

Business analysis is the process of conducting research and gathering information needed to
help organizations determine ways to solve problems and improve operations. Learn about the
process and steps followed to perform a business analysis, review methods of business
analysis, and gain understanding by exploring examples.

Business Analysis Overview

The basic idea of business analysis is quite simple. It is the practice of identifying and clarifying
a problem or issue within a company, then working with the various stakeholders to define and
implement an acceptable solution. However, actually conducting a business analysis can be
quite complex and time-consuming. Let's look at a typical sequence of events within a business
analysis.

Business Analysis Process

Steps to Perform a Business Analysis

Starting Point: The first step in the process is to identify a problem, an issue, or some other
business need. Let's say that you are the owner of a small motorcycle dealership. In addition to
selling bikes, your store does repairs and maintenance, sells riding gear, and custom orders
parts for your customers. You have received numerous complaints from the staff and
customers about the accuracy of your inventory system. The usual problem is for the system to
show parts and merchandise as being in stock, when none are actually available. This often
means that a repair job is not finished on schedule, which really irritates your customers.

Designate Business Analysis Team: The next step is to assign an individual or a team to
perform the business analysis. Usually the business analysis team is the go-between and
provides organization, strategic guidance, documentation, clarification, and assistance with
political issues. The objective of the business analysis is to efficiently resolve the problem or
issue to the satisfaction of all parties. Perhaps the most important factor in this process is full
and open communication between all parties. For our example, you assign the task of solving
the inventory system problems to your business manager and her assistant.

Identify Current Business Process: In the business analysis process diagram, the column on
the right represents the existing business process and the people currently responsible for the
area containing the problem. In our example, the business process would be the inventory
system and the people would be the shop manager, the sales manager, and the accountant.

Identify Stakeholders: The left-hand column on the diagram represents all of the other
stakeholders. These will vary from project to project. For example, stakeholders can include
customers, suppliers, regulatory officials, financial reporting experts, and external auditors. In
our example, the owner and the customers are certainly stakeholders. The sales personnel are
also stakeholders because they have to deal with angry customers.

Identify Requirements: Initially, it is crucial that the stakeholder requirements are clearly
identified and defined. If we don't do this, it will be impossible to successfully resolve the
problem. Examples of techniques that can be used to help define what the stakeholders need
include:

• Spontaneous group discussions, or brainstorming

• Review and analysis of pertinent documentation
• Small discussion groups of key individuals, or focus groups
• Individual interviews
• Surveys and questionnaires
• System analysis, including flow charts, narratives, diagrams, wireframes
• Observation and research

In our example, your customers want their work done on time and they want the parts they
ordered to be available as promised. As the owner, you want to keep the customers happy. You
also need accurate inventory records so that your shop area can work efficiently and the sales
staff can concentrate on selling merchandise.

Identify Current Business Process and Capabilities: Many of the same techniques that we
use to identify stakeholder requirements can also be used to define the current business
process and capabilities. We would rely heavily upon systems analysis techniques, modeling,
research, and the review of documentation. In our example, the current business process is the
existing inventory system. This would also include receiving inventory shipments and placing
the items on the shelves, ordering inventory, and recording sales.

Identify Differences: Any differences between what the stakeholders require and what the
current business process can provide represent unsatisfied stakeholder needs. These are the
issues that must be resolved. In our example, the current system for keeping track of our
inventory items isn't working. We can't operate efficiently and keep our customers happy until
we find and correct the problems.

Identify Potential Solutions: In our store, we could begin by reviewing how we order and
receive inventory items. For example, how and when do we add new items to our inventory
system? Do the sales personnel always remember to document and record a sale, and how is
the item removed from the inventory system? We would also look at the physical security of the
inventory. Is inventory theft a real possibility?

Perhaps something as simple as assigning one person to record all sales tickets and inventory
receipts might be an adequate solution. Maybe a partial solution would be to move the riding
gear displays further from the exits in order to make shoplifting more difficult. As shown in the
business analysis process diagram, any potential solutions should be reviewed and commented
upon by both the stakeholders and the people involved in the current business process.

Implement Changes: Let's assume that we changed several procedures, such as recording
sales invoices and recording merchandise receipts. We also improved the physical security of
the more expensive inventory items. We think we fixed the problem. We can track our success
by doing customer satisfaction surveys, recording completion times on jobs, and recording any
unexpected out-of-stock instances. We should also count our inventories periodically and
record any differences with the inventory system. In short, we shouldn't just assume that we
fixed the problem.

Lesson Summary
A business analysis is the practice of identifying and clarifying problems or issues within a
company and providing efficient solutions that satisfy the requirements of all stakeholders. The
process includes identifying stakeholder requirements, identifying current business processes
and capabilities, identifying solutions, and implementing changes. Both information gathering
techniques and communications with the various stakeholders are critical parts of the overall
process.

Business Analysis Sequence of Events

 • Starting Point
• Designate Business Analysis Team
• Identify Current Business Process
• Identify Stakeholders
• Identify Requirements
• Identify Current Business Process and Capabilities
• Identify Differences
• Identify Potential Solutions
• Implement Changes

Learning Outcomes
As you come to the end of the video, you should be able to:

• Define business analysis

• Explain the steps to perform a business analysis
 Business Analysis Tools, Techniques & Software

This lesson examines the tools, techniques, and software commonly used in business analysis.
Business analysis attempts to identify the requirements of a particular business and solve
business-related problems.

Business Analysis
Business analysis is the process of identifying the needs of a business and evaluating the
solutions that would be most appropriate for solving the specific problems of a business. Some
of the solutions that could be introduced are software solutions or changes in organization.

Business analysis aims to provide a holistic overview of a business and the situation that the
business is in. Business analysis also aims to establish ways to improve the operations of a
company and aid in the development of documents and standards. The following sections
further analyze the tools and techniques that are used in business analysis and the software
often used in business analysis exercises.

Business Analysis Techniques

Business analysis tools and techniques usually have specific uses and can help a business
analyst carry out a number of functions during the business analysis process. The following are
descriptions of some of the most common types of tools and techniques.

1. SWOT Analysis
The term SWOT stands for strengths, weaknesses, opportunities, and threats. The SWOT
analysis tool is commonly used to assess these four components. The SWOT analysis helps the
business analyst decide which aspects of the organization and its business environment need
to be improved. The SWOT analysis is a simple and straightforward technique.

2. Business Process Modeling

Business process modeling is a tool that's actually a diagram that represents how information
flows from one process to another. The most common business process notations are the
Business Process Modeling Notation and the Unified Modeling Language. The business process
modeling tool is used most commonly during the analysis phase of a project.

3. PESTLE Analysis
This is a business analysis tool that is used to analyze the environment within which a particular
organization operates. The term PESTLE stands for political, economic, social, technological,
legal, and environmental. When the PESTLE analysis is carried out within an organization, it
seeks to understand these six aspects of the environment as much as possible.
4. HEPTALYSIS
This tool of business analysis looks at seven aspects that a new business should consider as it is
starting up. These seven aspects include market opportunity, product development, the
operations plan, the budget and finances, human resources, return on investment, and safety
margins.

5. Business Analysis Software

There are some specialized programs that can be used in business analysis. This section
examines some of the valuable business analysis software tools.

• Business process modeling software: This software can be used to create process
diagrams, which are useful for examining business processes. Process diagrams enable
business analysts to better understand a concept or complex business process.
• Mock-up software: This software is used to create graphical representations that can
help the business analysis team better visualize various ideas. Examples of these
representations could be interactive.
• Requirements analysis software: This is software that is very suitable for business
analysts because it allows them to develop use cases and use case diagrams. These
diagrams are ideal for aiding the business analysts to determine requirements and
transform these requirements into a product or solution.

Lesson Summary
This lesson examines the tools, techniques, and software used in business analysis. Business
analysis is the process by which organizations go about identifying the needs of a business and
evaluating the solutions that would be most appropriate for solving the specific problems of a
business. Some of the tools and techniques that a business analyst can use are:

• The SWOT analysis: The SWOT analysis tool enables the business analyst to asses the
strengths, weaknesses, opportunities, and threats of an organization.
• Business process modeling: This is useful for depicting information flows.
• The PESTLE analysis: This is a business analysis tool that is used to analyze the
environment, with PESTLE standing for political, economic, social, technological, legal,
and environmental factors.
• HEPTALYSIS: This tool covers seven aspects that can guide a new business as they set
up.

Some of the business analysis software that can be used include:

• Business process modeling software: For creating and examining information flows,
such as process diagrams, which enable business analysts to better understand a
concept or complex business process.
• Mock-up software: This software is used to create graphical representations.
• Requirements analysis software: For determining requirements and transforming them
into a product or solution.
 Business Strategies: Market Advantages Provided by Information Systems

Businesses often seek competitive advantages through Total Quality Management (TQM), which
is a company-wide dedication to continuous quality improvement to maintain or improve
customer satisfaction. Learn about business process modeling, information systems, and how
businesses can gain competitive market advantages through TQM.

Process and Re-engineering

I think we all recognize computers are a normal and vital part of doing business. We might
place an order online or work where we use a computer all day. So how do these information
systems work to help the organization? An organization is more than just its information
system. Each occupation within the organization plays a role in its success. Processes are the
way tasks, or jobs, are completed.

If we make chocolate chip cookies, we don't want to add the chips in the first step, where we
blend the shortening with the sugar. This would mush the chocolate chips, completely changing
the taste and texture of the cookie. Enter process re-engineering, or the redesign of workflows
and processes. If we recognize that adding chips at the beginning of the process just doesn't
work, we would try re-engineering to make the cookies taste the best with the most efficient
process. Let's walk through the making of the cookies. Put dry ingredients in one bowl,
shortening and brown sugar in another and in a third, stir the eggs, milk and vanilla together.
Blend the shortening and brown sugar well, then add the wet ingredients, mix them together
and then add the dry stuff. Once everything is combined, use a spoon to stir in the chocolate
chips. You then drop the dough on cookie sheets, bake for a few and hello, awesome and
efficiently prepared chocolate chip cookies!

The precursor to process re-engineering is business process modeling, when analysts and
managers review a business' systems, or processes, in an attempt to improve them. They'll look
at how a process is affecting time and money for the company. They'll also review activities that
may be replicated in different departments. The analysis team will break down three types of
processes: management, or the governance of a system; operational activities, or
departments that must exist to keep the business going, such as sales, purchasing and
manufacturing; and support activities. These are processes required so the operational
activities can continue. They include accounting, human resources and information technology
departments.

Let's look at an operational activity. The current production of chocolate chip cookies has
consumer feedback citing overly brown bottoms. A review of the process shows the cookies
remain on the metal baking trays when removed from the oven and are allowed to cool on the
trays. All the ingredients, the order they're added in and the other processes have been
confirmed as correct. Can you re-engineer the last step(s) of baking the cookies so the bottoms
aren't overly cooked? A couple of possible ideas are to use a stone baking sheet or to remove
the cookies from the baking sheets as soon as they are out of the oven and place them on
brown craft paper.
TQM and Competitive Advantage
When all processes are combined, we can look at a term called Total Quality
Management (TQM), or just Quality Management. This is a concept aimed at
securing customer satisfaction by the entire company working toward the goal of continuous
improvement. If we go back to the cookie re-engineering scenario, TQM would be part of this.
We would be constantly looking for a way to make this a more efficient process. Another
important part of TQM is that each employee who participates in a given task, such as
processing a check or doing the same manufacturing job, must do it in exactly the same way as
another employee. This contributes to improved quality.

Why does a company use TQM? It's one way to give them a competitive advantage, or
something about a company that sets it apart from its competitors. The 'something' can be
cost. Do you choose a pair of jeans over another because they cost less? Or maybe because
they are different and unique enough that they stood out to you? A third area of competitive
advantage can be technological. How does that relate to picking a pair of jeans? Let's say the
store you wish to buy jeans from doesn't exist anywhere near where you live. The company
may have created a competitive advantage by setting up a website so you can purchase those
jeans.

An example of a corporate acquisition simply to gain a technological competitive advantage

happened just at the turn of the 21st century. A prominent snack producer had an
excellent distribution system. A certain cereal manufacturer knew this would give them a
competitive advantage for efficient delivery of products. The benefit to the snack company that
was acquired came from the order and payment system of the cereal company. This cereal
manufacturer was one of the first to utilize electronic data interchange (EDI), which is the use
of networks and the Internet to place orders, invoice customers and receive payments. Since
the acquisition was complete, the snack company's computer system was rolled over to the
same one the cereal company used, something that many businesses do now on a daily basis.

Lesson Summary
Companies use business process modeling, the analysis of a business' systems and processes,
in order to re-engineer, or redesign, those systems. This is always a work in progress in an
effort to practice Total Quality Management, or utilizing consistency and continuous
improvement in an effort for customer satisfaction. Excellence in this endeavor may result in
a competitive advantage, giving the company that practices TQM a leg up on others in its
industry.

Learning Outcomes
After watching this lesson, you should be able to:

• Define processes, process re-engineering and competitive advantage

• Describe business process modeling and the three types of processes analyzed
• Summarize the process of TQM
 Business Intelligence (BI): Organizing, Categorizing and Accessing Data

Business Intelligence (BI) is a computerized intelligence system that helps organizations collect,
manage, and interpret data needed to make decisions. Learn about BI and how organizations
use it for organizing, categorizing, and accessing data, and explore features of BI, including
predictive analytics and online analytical processing.

What Is Business Intelligence?

Business Intelligence, or BI, uses a computerized intelligence system to collect, manage and
interpret information about a business to make sound business decisions. BI monitors the
operations of a company intelligently. BI employs a combination of tools, such as database
management, decision support systems, data mining and statistical analysis.

How is BI different from a general decision support system? First, BI is not focused on
supporting a specific type of decision, but on all the operations of a company. This makes it
more comprehensive. Second, BI often takes place on a continuous basis in close to real-time.
This makes it possible to get an ongoing, integrated view of a company.

Third, BI has an element of intelligence, which means it tries to integrate information internal to
the organization and also information related to the market conditions and specific
competitors. BI is often used, not just to make well-informed decisions, but specifically to gain a
competitive edge in the marketplace. The specific focus of BI is often to gain more business or
to improve market share.

Predictive Analytics
BI often has a predictive aspect to it, referred to as predictive analytics. What will the
marketplace look like in the next few weeks, months or years? What will my competitors do?
What will give my company a competitive edge in the near future?

These questions are not addressed by brainstorming through pie-in-the-sky thinking, but by
computer algorithms analyzing data. Predictive analytics is a type of data mining that is focused
on finding patterns in existing data in order to predict trends and behavior into the future. One
example of predictive analytics you are already familiar with is weather forecasting.
Meteorologists use long-term historic data and more recent measurements of the atmosphere
to predict the temperature, wind and precipitation a few days into the future. The forecast may
not always be accurate, but it is often pretty close.

A good example of predictive analytics in the business world is the insurance industry. Let's say
you have just bought a new car, but before you can even drive it off the lot, you need to get
insurance. You call an insurance agent to set up a new insurance policy. How will the insurance
company determine your monthly premium? This will depend first of all on the actual car you
drive. If a very expensive car gets into an accident, it will cost more to repair. It will also depend
on how you will be using your car and where it will be parked.
Can you think of some other things the insurance company wants to know? How about your
age? Definitely. Your gender? Yes. The ZIP code where you live, work and/or go to school? Those
too.

So, let's say you are 24. You provide all the other information, and the insurance company
calculates your premium at $137 per month. You turn 25 in a few months, and you want to
know if it makes any difference. Sure enough, your premium will drop to $125 per month.

So, how exactly did the insurance company calculate the $12 difference? Will you be a much
better driver in a few months? Remember how insurance works. You get an insurance policy,
and when you get into an accident, the insurance company pays for your repair. So, the
insurance company needs to calculate what kind of risk you present to them. What is the
probability you will get into an accident in the next 12 months?

This is determined by looking at the data on drivers from the past couple of years. How many
drivers with similar profiles got into an accident over a 12-month period? What insurance
companies have found is that younger drivers under 25 tend to drive less safe than those that
are older.

Whatever the exact reasons are behind this, this is what the statistical analysis shows. What this
means is that younger drivers have to pay a little more. The $12 difference is determined by the
statistical model used to predict the risk of a driver getting into an accident.

Predictive analytics uses historic data to predict the probability of you getting into an accident.
That doesn't mean you are going to get into an accident, of course. But, let's say the insurance
company has 250,000 customers with an automobile insurance policy. Every year, there are
going to be a number of accidents. Predictive analytics helps to determine the overall risk to the
insurance company. That overall risk is used to calculate the premiums. Customers will have to
pay more or less, depending on how much they contribute to the overall risk.

Online Analytical Processing

One of the other specific tools used in BI is Online Analytical Processing, or OLAP. OLAP is an
approach to quickly answer questions that have multiple dimensions. You can think of a data
table as having two dimensions: rows and columns. For example, each row in the table could be
a product made by a business, and each column could be how many units of each product
were sold every month. You can answer questions about this table using a database query.

OLAP extends this idea to more than two dimensions. For example, for each product, you also
want to know in which facility it was made (3rd dimension), which customer it was shipped to
(4th dimension) and how many units have some type of problem as reported by the customer
(5th dimension). This information could be stored in a relational database, but for a large
number of dimensions, this can get complicated, and the database will become slow. OLAP
organizes this multi-dimensional data, so that it can be analyzed quickly.

For example, once you have the data organized in the various dimensions, you can ask
questions like this: Show me all the facilities in Europe that made this particular product in the
month of June that were shipped to customers in Asia that were reported to have a problem.
Now, for those same facilities, show me all the other products they made in the same month
and that were shipped to North America, and then give me a mailing list of all those customers
in California.

OLAP is designed to process this type of analysis very quickly. You can see how OLAP can be
very useful to analyze complex business operations. OLAP and data mining are both used in
Business Intelligence, but they represent different approaches.

In data mining, analytical tools are used to uncover relationships in the data. You are basically
saying, 'Here is the data, show me what the interesting patterns are.' In OLAP, you start with
some very specific questions, and you are drilling down into the data to find the answers. Data
mining is bottom-up, discovery-driven. OLAP is top-down, query-driven.

Lesson Summary
Business Intelligence, or BI, uses specialized information systems to gain a competitive edge
in the marketplace. BI employs a combination of tools, such as database management, decision
support systems, data mining and statistical analysis. Two specific tools, which are somewhat
unique to BI, are predictive analytics and online analytical processing.

Learning Outcomes
Upon completing this lesson, you'll be able to:

• Describe what Business Intelligence (BI) is

• Name some of the tools that BI employs
• Explain how BI is different from a general decision support system
• Summarize what predictive analytics is and how it plays a role in business
• Understand what Online Analytical Processing (OLAP) is used for
• Differentiate between OLAP and data mining
 Process Model in Business Analysis

The process of completing tasks is an extremely important part of doing business. In this
lesson, we will discuss the business process model and how it can be used in business analysis.

Business Process Modeling

Imagine that you are getting ready to go out with a group of friends to celebrate New Year's
Eve. As a part of the process you first invite everyone you know, then you ask where everyone
would like to go. Finally, you determine if everyone is okay with the time and place of the event.
If one or two of your friends are not able to make it, you may attempt to make a modification
and check in with everyone again. If everyone agrees on the time and place, the decision is
made. This process is understood as a general courtesy of back and forth planning to ensure
everyone is satisfied with the decision made.

Similar to your decision making process, companies use a tool called business process
modeling to create a roadmap which explains the general process of how to complete specific
tasks, such as decision making. It provides you with a broad picture of how to get something
done given a particular set of circumstances. Much like your party, if you do not get consensus
on a decision, you try and modify it and then repeat the consensus process.

In business analysis, this model allows companies to look for areas where they can improve
their processes. Because the business process model provides companies with a standardized
way of achieving their goals, they can evaluate the effectiveness of their current processes for
completing a task.

Analyzing with BPM

Your business can create a business process model in order to identify ways to improve
processes in all departments. The diagram created for your business process model will assist
your company in answering questions on the quality of the process.

• Is the decision making process effective?

• How efficient are the management processes?
• Are the operational processes successful?
• How effective is the marketing process?
• Are the customer service processes satisfactory?

You can follow the flow of the process and look for potential obstacles that decrease its
effectiveness.

Consider that your New Year's Eve gathering started with the discussion of having a party and
was followed by contacting all of your friends to determine if they would be interested. This
may be extremely time consuming. On the other hand, if you have already set a location for the
party, you can contact your friends to determine if they would be interested.
After contacting everyone you want to invite, you would set a time for the party, and check for
consensus. If the vast majority of your friends are able to come to that location, then the
decision is made. If there are several concerns, then you may reconsider the location and once
again go through the process of calling your friends.

Similar to this way of making decisions with your friends, your business can create a process
model for decision making. This will allow the business to evaluate its current processes and
determine the best way to begin discussions, and make decisions.

Example
The diagram below shows a visual of what a business process model for decision making might
look like.

Thinking about the New Year's Eve party, look at the process in the diagram. As you can see, the
discussion may come about due to two reasons: a general discussion to reach a particular goal
or because a concern is raised.

For example, you may just want to throw a New Year's Eve party so you have a discussion with
your friends, make a proposal, and test for consensus. If there is consensus, the decision is
made. If there is not a consensus, and concerns are raised, the discussion begins again.

The same would be true in a business process. Imagine that you are trying to make a decision
on cutting labor costs. There is a discussion on how to reduce labor and still maintain the
current level of production. The process may take several rounds before achieving consensus.
In some cases, it may be determined that the concerns do not outweigh the benefit. In this
case, the person or group may stand aside, thus leading to consensus.

Analysis
Now that you know how the process can work. How can it improve?

The most important aspect of business process modeling in business analysis it that it allows
you to pinpoint the exact point in the process that needs to be improved. For example, using
the decision making model you attempt to find out why many of your company's decisions are
not successful. You find out that although a significant number of decisions all reach
consensus, they fail to be fully implemented.

Consider that your company has a discussion on reducing labor cost. Everyone reaches a
consensus that overtime hours should be completely eliminated, and no employee should work
more than 40 hours a week. A month later, the progress report indicates that a majority of
employees are still working overtime.

Looking back to the chart, you determine that there must be an issue with the action point.
Further steps should be taken to improve the process following the action point, in order to
ensure that decisions are implemented. By using the process model to analyze your processes,
you were able to identify where the problems were occurring, and you can now take steps to
improve them.

Lesson Summary
Similar to the steps you take when making plans with your friends, the business process
model creates a roadmap that identifies the process of completing certain tasks. Process
models may be created for your business in order to evaluate departments, including the role
of managers, and the operational processes. Once the roadmap is created, you can evaluate
how effective your business processes are and analyze areas which need to be improved. When
there is a noticeable problem in the decision making process, you may turn to the process
model and find that in one particular case, the problem occurs during the implementation
phase. Once you have identified at which phase the process is failing, you can then determine
the best solution.
 What is Business Process Modeling (BPM)? - Definition, Notation &
Examples

The goal of business process modeling (BPM) is to improve how a business performs. Explore
the definition of business process, business process modeling, and examples of analytic
techniques applied to BPM.

What Is a Business Process?

For economic reasons you have decided to sell your car. A friend tells you all that you need to
do is place an ad in the paper, show the car, and collect your money. After doing some research
you find that there are several steps your friend forgot, like completing forms, doing repairs,
ensure adherence to state laws, and, finally, preparing a bill of sale. You also find out there is a
specific order to follow. In other words, you must complete a detailed process. This is not much
different than doing business that is completing a business process to reach the desired result.

Business Process Modeling (BPM)

S. Williams, in a 1967 article entitled 'Business Process Modeling Improves Administrative
Control,' explained that the techniques used in understanding manufacturing systems could be
applied to business processes. S. Williams formally named the process business process
modeling.

The term modeling is a form of simulation where a series of related steps form a process, and
these processes are then analyzed, studied, and repeatedly performed with a goal of improving
business process performance. Simply stated, the more efficient a process becomes, the less it
will cost to complete and will, therefore, lower business costs. The intent of business process
modeling (BPM), then, is to optimize efficiency when performing business processes and
activities associated with producing products and services.

BPM requires the detailed analysis of each step as they occur and may be in written and
graphic forms. Many BPM experts prefer specialized computer programs to help create,
illustrate, and analyze the processes, though using a computer is not always necessary. Many
times a sheet of paper and a pencil, a white-board, or a flip-chart can be used to graphically
represent the process.

Performing BPM on a business process requires a form of mapping, drawing, or otherwise

graphically representing each step in the process. A variety of diagramming, flowcharting, and
programming techniques are currently available to BPM analysts. Today, flowcharts, data flow
diagrams, and Gantt charts are commonly used analytic techniques. A brief description of these
techniques and an example of each is provided in the next three sections.
Flowcharts
A flowchart is a pictorial technique using symbols to represent a particular type of action or
operation. Flowcharts, both graphically and logically, help focus on process workflows,
input/output (I/O) operations, decisions, and mathematical solutions. Many of us can use
flowcharts, for example, when we prepare to leave our homes for an extended vacation. We
first verify that the house is secure, then we check that the electricity is turned off, and so on. If
we determine the toaster oven is still plugged in after leaving, we divert from our present
departure to return and unplug the appliance.

Data Flow Diagrams

A data flow diagram (DFD) is used to graphically represent data and information flowing from
one working point to another. By graphically showing how the flow connects to and from one
process to another, analysts are better able to study what the process is doing and how it is
being performed at any given point in the procedure. As an example of a data flow, think of
yourself putting gasoline in your car and concentrate on the working points required to
complete the task. Each working point from paying for the gas to placing the gasoline into your
tank depends on a specific order. In other words, each working point in the process depends on
the performance of the previous working point. If one working point is skipped, the entire
process cannot be completed.

Gantt Chart & BPMN

A Gantt chart is a horizontally prepared table invented by Henry L. Gantt in 1917. The chart's
purpose was to document and control manufacturing production processes. Today, the Gantt
chart provides a graphical illustration of scheduled tasks or activities as they form a process.
Chart details include, but are not limited to, a task title, team members assigned to the task,
critical path dates, and the task duration.

For example, consider you are planning a wedding and you know that certain things must be
done before another. Consider when arranging a limo to pick up the bride at a certain time. The
pickup must occur and be completed before the groom can be picked up. Or, you must arrange
a location for the ceremony before you have food and flowers delivered. One event depends on
the progress or completion of other events. If one event is delayed, you can view your Gantt
chart and see exactly what events will be impacted.

Business process model notation (BPMN) uses graphic symbols to present a business
process flow. Techniques such as flowcharts, data flow diagrams, and Gantt charts are part of
the BPMN arsenal and are widely used to visually represent business process information.
Listed are several symbols used in BPMN. Here is an example of a business process flowchart
using several of these symbols:
 What Is Reengineering in Business? - Definition, Examples & Methodology

Reengineering in business can help create responsive and successful businesses in the midst of
shifts in an industry. Read about the definition and examples of business process engineering,
the importance of engaging in it, and the methodology for BPR.

What Is Business Process Reengineering?

Business process reengineering (BPR) involves the examination and redesign of business
processes and workflows in your organization. A business process is a set of related work
activities that are performed by employees to achieve business goals. Basically, a business
process is the way we perform our work and business process reengineering is the process
of changing the way we do our work so we do it better to accomplish the goals of our business.

Why Engage in Business Process Reengineering

The idea behind business process reengineering is to make your company more flexible,
responsive, efficient and effective for all stakeholders, including customers, employees and
owners. In order for BPR to work, your business must be willing to make the following changes:

• Change from a management focus to a customer focus - the boss is not the boss, the
customer is the boss.
• Empower your workers that are involved in each process to have decision-making and
ownership in the process.
• Change your emphasis from managing activities to focusing on results.
• Get away from 'score keeping' and focus on leading and teaching so employees can
measure their own results.
• Change the company's orientation from a functional orientation to a process or cross-
functional orientation. This allows for an increase in organizational knowledge among its
members and a greater degree of flexibility in accomplishing tasks.
• Move from serial operations to concurrent operations. In other words, multitask instead
of just doing one thing at a time.
• Get rid of overly complex and convoluted processes in favor of simple, streamlined
processes. Use the KISS Principle - keep it simple, stupid.
• Stop trying to build an empire and protect the status quo. Instead, invent new systems
and processes that look towards the future.

Methodology for Business Process Reengineering

Business process reengineering consists of four stages.

Stage One: Identification of Goals and Purposes.

You must initially identify the company's strategic goals and purpose of which the processes
help to achieve. In other words, what are you trying to achieve with this process? Examples may
include increases in customer satisfaction, more effective distribution systems, more efficient
production or development of innovative products.

Stage Two: Analysis of Current Processes.

You really cannot improve upon a process unless you know how the current process works. For
example, you can't improve upon a production process unless you know how your production
line works, including the steps in the production process, the method of production at each
stage and the time and resources required at each stage. Utilizing a flowchart to map the
process may be helpful.

Stage Three: Find or Create Ways to Improve.

Now that you are completely familiar with the process, you should be able to identify problems
or areas that could use improvement. Armed with this information, you can research possible
ways to improve the process. Methods of research may include reviewing industry research
and news sources and consulting with colleagues in your industry. Oftentimes, however, there
may not be turnkey solutions. You will have to develop improvements yourself. The key
question to answer is: how can we accomplish the goal with the least amount of effort, costs
and time? For example, you may decide that outsourcing the manufacture of some of the
simpler components of a product may save time and money due to lower labor costs. You may
also be able to eliminate some unnecessary steps in a process or replace human labor with
technology, such as using robots for some assembly. You may also merge some departments
to reduce coordination problems, reduce unnecessary expenditure and duplication of process
and increase cross-functionality.

Stage Four: Implement.

The final stage is implementation of the new process. You have to ask yourself, 'How do you
actually go about implementing the change in the process?' For example, you may need to
obtain bids from outsourcing firms and enter into the most beneficial relationship, or you may
need to order and install a robotic assembly system as well as hire and train the requisite
technicians.

Lesson Summary
Let's review. Business process reengineering (BPR) is a technique used to transform business
processes for more effective achievement of business goals and purposes. If used properly,
BPR will create an efficient, effective and responsive business for its owners, employees and
customers. The process involves clearly defining your organization's overarching goals and
purpose, analyzing the current company processes, finding or creating ways to improve the
process and implementation of the new process.

Learning Outcomes
Once you've finished with this lesson, you should have the ability to:

• Explain what business process reengineering (BPR) is

• Recall the purpose and advantages of BPR
• Describe the four stages of BPR
 Reengineering Jobs for Continuous Improvement

Successful organizations engage in continuous improvement to ensure work processes remain

relevant and meet an organization's needs, which change over time. To promote continuous
improvement, organizations sometimes must reengineer their jobs. Learn about reengineering,
understand why organizations do it, and review the methods human resources professionals
use to reengineer jobs.

Reengineering
Can you imagine your life without your smartphone, tablet, or laptop? Technology companies
have roared into the marketplace over the last ten years. Competition is fierce. Pear Products
Technology is always searching for ways to remain competitive in the global marketplace.
Diverse work forces and constant new competitors are some reasons why companies look to
constantly improve their work processes.

Companies that need drastic improvements in their business due to financial difficulties,
visualizing upcoming problems, or the need to remain the leader will consider reengineering.
This term means a fundamental rethinking and radical redesign of work processes to ensure
dramatic improvements. In other words, it can mean to start entirely over with the process
design, or job design. The results are streamlined processes, enormous cost savings, and more
profit. Why do companies want to reengineer jobs? Pear Products is an excellent example of
the advantages of reengineering jobs.

Why Reengineer?
Pear Products adopted a philosophy to constantly look for ways to reengineer jobs in order to
remain the industry leader. The company has benefited largely from implementing the change.
It has reduced product cycle development and has improved innovation, flexibility, quality, and
overall productivity. Many companies adapt team environments to ensure that work is multi-
tasked and completed efficiently. Let's see how Pear Products has used reengineering.

How to Reengineer Jobs

Initially, Pear Products established their overall sales, marketing, and production in a very
centralized method. Consumers would have to talk to many different individuals to get orders
and product information. In addition, the employees were not empowered to make decisions,
and production time lagged. Pear Products decided to reengineer most of the jobs that were
connected to the customer.

First of all, a new technological customer service system was implemented. This made a huge
amount of customer information automated. Then, all customer service reps were trained on
all levels of equipment as to minimize customer contact points. For instance, a customer will
place an order online for a Pear Product. Later, the customer calls an automated phone
number to find out information such as delivery time, return information, or customer service
questions. If the automated system fails to answer their question, then the system would hand
off the customer to an employee who was capable of answering both technology and product
information. This way the customer would only have to deal with one person for their
questions.

The key methods of reengineering jobs are:

• Empowering employees by allowing them to make their own decisions

• Providing excellent tools and training
• Eliminating unproductive uses of time by cutting back on paperwork, procedures, and
minimizing record keeping
• Automating jobs
• Multi-tasking of job details
• Minimizing checks and controls
• Providing a single point of customer contact

Another way of reengineering jobs is to continuously challenge employees. This will increase
productivity and learning.

Job rotation is when a company moves a worker from one task to another task. For example,
Pear Products has design employee work on different tasks quarterly. One quarter they might
be responsible for working with initial designs and the marketing department. The next quarter
they might handle the final product designs and work with finance and quality control.

Job enlargement is when an employee's skill set and responsibility are expanded horizontally.
Pear Products initially gives new employees limited work responsibility but quickly adds to their
work load to continuously develop advanced skills, such as presenting, finance workshops, etc.

Lastly, Pear Products also encompasses the use of job enrichment, which is vertical expansion
of an employee's job. The company likes to expose employees to all levels of the company. For
example, even the CEO spends a day in the factory working on the automation machines. All of
these job philosophies help companies develop well-rounded employees who are never bored
and easily promotable.

Lesson Summary
Reengineering means a fundamental rethinking and radical redesign of work processes to
ensure dramatic improvements. The results are streamlined processes, enormous cost savings,
and more profit for the company. Other ways to reengineer jobs continuously are to offer job
rotation, job enlargement, and job enrichment. Job rotation is when a company moves a
worker from one task to another. Job enlargement is when an employee's skill set and
responsibility are expanded horizontally. Job enrichment is vertical expansion of an
employee's job.

Learning Outcomes
When this lesson is over, you should be able to:
• Define the need to reengineer jobs
• Describe the process of reengineering for dramatic improvements
• Identify the key methods for reengineering
• Recognize how employee challenges can also reengineer improvement