IMPICATIONS OF BUSINESS PROCESS RE-ENGINEERING
BPR is regarded as process-oriented which is trying to overcome some problems raised by hierarchical
structures. That is, BPR as a process-orientation changes the structural relationships between
management and employers into the interactive processes between them. BPR aims to break radically
the existing process structures and replace them by fundamental and innovative solutions. The
functional structure is a vertical structure in which there may exist barriers to separate the functions in
organisations. BPR emphasises business processes which are regarded as horizontal flows and cut across
organisational functions. MacIntosh and Francis (1997) justify the claim that BPR highlights the delays,
errors and inefficiencies which are introduced when passing information and work from one function to
another.
The Zong company mainly applying BPR as a tool to reduce costs and cycle time because BPR reduces
costs and cycle times by removing unproductive activities. It also Improve overall quality by reducing the
fragmentation of work and establishing clear ownership of processes.Workers gain responsibility for
their output and can measure their performance based on prompt feedback. There are so many
companies like Zong that has been applied BPR as a tool for managing their business processes such as-
Mahindra Satyam (now Tech Mahindra), Mahindra & Mahindra Ltd., General Motors Corporation, Dell,
Ford Motor, IBM, Xerox, British Telecom etc. (Bhaskar, 2014), but author provides here single case of
client company to show the outcome of BPR after implementation.
The results of this unique study indicate that the BPR program produced dramatic benefits that affected
every area of the company. In the Product Management process, the manufacturer reduced new
product development time by 50 %, from 72 months to 36 %, while eliminating launch delays by
instituting upfront planning mechanisms. Sales forecasting improved from 30 % to 70 % and a customer
complaint redresses were reduced by 50 %. Finally, in Vendor Management, the client reduced materials
costs by 6 % and vendor development time by 30 %.
The future of reengineering as the concept evolves is difficult to evaluate without considering the
current business trends. A global economy has mandated greater operational effectiveness and
efficiency, and imposed fantastic pressures for cost reductions. These pressures have cut across
different segments of the economy, and greatly impacted the operations of service and manufacturing.
FUNCTIONAL VERSUS PROCESS ORGANIZATION
What is a Functional Organization?
Organizations (companies) are complex systems that must somehow be decomposed in order to
be manageable. A common way to decompose a company is to divide it hierarchically into
functional departments (e.g. sales and production). Such an approach is “functional”
In the case of a functional approach, a company is actually hierarchically divided into
“subcompanies”, each performing a specific function (e.g. sales and production). This offers
several benefits, since it divides a big system into smaller systems that are specialized and easier
to manage (since they are less complex).
The major drawback of a functional approach is that a company needs to perform as a whole
when producing a specific outcome, which means that different functional departments have to
communicate and collaborate in an efficient and effective way. However, since each
organizational department is usually managed vertically (topdown) responsibilities will be non-
transparently divided amongst separate functional units.
Consequently, problems that occur at the interfaces between departments are often given less
priority than the short-term goals of the departments. This leads to little or no improvement to
the customer, as actions are usually focused on the departmental functions, rather than overall
benefit to the organization.
In addition, end customers and their requirements are not always visible to all departments (i.e.
sales has contact with customers where production does not).
What is Process Organization?
In contrast to a functional approach, a process approach does not divide a company ‘topdown’
into a smaller concepts, but defines the ways (i.e. processes) in which particular services or
products are developed. This means that a process approach interrelates different organizational
functions to produce a specific outcome. Graphically, a process approach is most commonly
represented as a horizontal crosssection of organizational functions.
Each organization runs many processes, which are commonly divided into managerial,
production and supporting processes. The application of a system of organizational processes
together with the identification and interactions of these processes, and their management, can be
referred to as a “process approach”.
The processes are managed as a “system”, by creating and understanding a network of processes
and their interactions. The consistent operation of this network is commonly referred to as
“system approach” to management.
A process approach is a common way of improving the performance of an organization.
What Benefits Does a Process Approach Provide?
A process approach offers several benefits when compared to the traditional, functional
approach:
1. It focuses on integrating, aligning and linking processes and organizational functions
effectively to achieve planned goals and objectives.
2. It allows an organization to focus on improving its effectiveness and efficiency by
focusing on end-products and customers.
3. It enables and facilitates consistent performance through well- defined workflows,
which in turn provide assurance to customers about the organization’s quality and
capability.
4. It promotes the smooth and transparent flow of operations and information within the
organization.
5. It treats processes as valuable assets and focuses on continual improvement of process
execution and process outcomes.
6. It contributes to lower costs and shorter cycle times, through continual improvement
and the effective use of resources.
7. It facilitates the involvement and empowerment of people, the clarification of their
responsibilities and minimizes the risk of potential conflicts.
