Business process reengineering
Introduction
• The globalization of the economy and the liberalization of the trade markets have
formulated new conditions in the market place which are characterized by
instability and intensive competition in the business environment.
• Competition is continuously increasing with respect to price, quality and selection,
service and promptness of delivery.
• Removal of barriers, international cooperation, technological innovations cause
competition to intensify. All these changes impose the need for organizational
transformation, where the entire processes, organization climate and organization
structure are changed.
Concept
In1990 Michael Hammer
• defined BPR as “the fundamental rethinking and radical redesigning of business process
to achieve dramatic improvement in critical contemporary measures of performance,
such as cost, quality, services, and speed”.
( International Journal of Research in Computer and Communication Technology,
Vol 3, Issue 7, July – 2014)
The definition has following Key words
• fundamental: "Why do we do what we do?" and "Why do we do it the way
we do?" Reengineering ignores what is and concentrates on what should
be.
• Radical: Disregarding all existing structures and procedures and inventing
completely new ways of accomplishing work
• dramatic: Used for quantum leaps in performance, not used for small jumps
• Process: the most important key word, Collection of activities taking
multiple inputs to create an output that is of value to the customer
(Advantages and Disadvantages of Business Process Reengineering, Prof. Dr. Breyer-
Mayländer)
Why change
A company has willingness to change because
of the inefficiency process, the decreasing
market share, the increasing unsatisfied
customer, or the competitor.
Hammer and Champy, 1993 went further to identify three kinds of
companies that undertake engineering.
First, company that find themselves in deep
trouble. They have no choice instead of needs magnitude
improvement, that company clearly needs business reengineering.
Second, companies that are not in trouble but whose
management can see trouble coming.
Third, companies that are in peak condition and see
an opportunity to develop a lead over their competitors.
(BUSINESS PROCESS REENGINEERING:CONCEPTS,
CAUSES AND EFFECT JURNAL TEKNIK INDUSTRI VOL. 4,
NO. 2, DESEMBER 2002: 102 - 110Jurusan)
3 Rs of BPR
(Report produced for the EC funded project)
The BPR characteristics - outcomes include the following:
Several jobs are combined into one.
Decision-making becomes part of the job of employees (employee empowerment)
Steps in the processes are performed in natural order, and several jobs get done
simultaneously.
Processes have multiple versions. This enables the economies of scale that result from
mass production, yet allows customization of products and services.
Work is performed where it makes the most sense.
Controls and checks and other non-value-added work are minimized.
A single point of contact is provided to customers.
Objectives of BPR
• Customer focus- Customer service oriented processes aiming to eliminate
customer complaints.
• Speed- Dramatic compression of the time it takes to complete a task for
key business processes. For instance, if process before BPR had an average
cycle time 5 hours, after BPR the average cycle time should be cut down to
half an hour.
• Compression. Cutting major tasks of cost and capital, throughout the value
chain. Organizing the processes a company develops transparency
throughout the operational level reducing cost.
Contd.......
• Flexibility- Adaptive processes and structures to
changing conditions and competition. Being closer to
the customer the company can develop the awareness
mechanisms to rapidly spot the weak points and adapt
to new requirements of the market.
• Innovation- Leadership through imaginative change
providing to organization competitive advantage.
• Productivity- Improve drastically effectiveness and
efficiency
In order to implement BPR to an enterprise the followings key
actions are needed
• Selection of the strategic (added-value) processes for redesign.
• Simplify new processes - minimize steps - optimize
efficiency.(modeling).
• Organize a team of employees for each process and assign a role for
process
• coordinator.
• Organize the workflow - document transfer and control.
• Assign responsibilities and roles for each process.
• Automate processes using IT(Intranets, Extranets, Workflow
Management)
• Train the process team to efficiently manage and operate the new
process
• Introduce the redesigned process into the business organizational
structure
MODEL 0F BPR
(Proceedings of 3rd Asia-Pacific Business ResearchConference 25 - 26 February 2013, Kuala Lumpur, Malaysia, ISBN:
978-1-922069-19-1
Business Process Reengineering: Literature Review of Approaches and Applications
Muhammad Nauman Habib and Dr. Attaullah Shah )
All methodologies could be divided in
general 'model' stages
• The Envision stage: the company reviews the existing
strategy and business processes and based on that review
business processes for improvement are targeted and IT
opportunities are identified.
• The Initiation stage: project teams are assigned,
performance goals , project planning and employee
notification are set.
• The Diagnosis stage: documentation of processes and sub-
processes takes place in terms of process attributes
(activities, resources, communication, roles, IT and costs).
Contd....
• The Redesign stage: new process design is developed by
devising process design alternatives and through
brainstorming and creativity techniques.
• The Reconstruction stage: management technique
changes occur to ensure smooth migration to the new
process responsibilities and human resource roles.
• The Evaluation stage: the new process is monitored to
determine if goals are met and examine total quality
programs
(Reportproduced for the EC funded project INNOREGIO: dissemination of
innovation and knowledge management techniquesby Sotiris Zigiaris,MSc,
BPR engineer)
Following roles are mostly involved in implementing
reengineering at a company:
• Leader: a senior executive who authorizes and motivates the overall reengineering
effort
• Process owner: a manager with responsibility for a specific process and the
reengineering effort focused on it
• Reengineering team: a group of individuals dedicated to the reengineering of a
particular process, who diagnose the existing process and oversee its redesign and
implementation
• Steering committee: a policy-making body of a senior manager who develop the
organization's overall reengineering strategy and monitor its progress
• Reengineering czar: an individual responsible for developing reengineering
techniques and tools within the company and for achieving synergy across the
company's separate reengineering projects.
((Advantages and Disadvantages of Business Process Reengineering, Prof. Dr.
Breyer-Mayländer)
BPR success factors
• Factors relating to change management systems and culture-Revision of reward
systems, communication, empowerment, people involvement, training and
education, creating a culture for change, and encouraging ideas of the
organisation to change are the most important factors related to change
management and culture.
• Factors relating to management competence - The most noticeable managerial
practices that directly influence the success of BPR implementation are top
management support and commitment, and effective management of risks.
• Factors relating to organisational structure -As BPR creates new processes that
define jobs and responsibilities across the existing organisational functions
there is a clear need to create a new organisational structure which determines
how BPR teams are going to look, how human resources are integrated, and
how the new jobs and responsibilities are going to be formalised
Contd....
• Factors related to BPR project management - adequate strategic
alignment , effective planning and project management techniques,
identification of performance measures ,adequate resources,
appropriate use of methodology (Carr, 1993), external orientation
and learning (Jackson, 1997), effective use of
consultants(Davenport, 1993), building process vision (Talwar, 1993),
effective process redesign, integrating BPR with other improvement
techniques(Zairi and Sinclair, 1995),and adequate identification of
the BPR value.
• Factors related to IT infrastructure - Effective alignment of IT
infrastructure and BPR strategy, building an effective IT
infrastructure, adequate IT infrastructure investment decision,
adequate measurement of IT infrastructure effectiveness,
proper IS integration , effective re-engineering of legacy IS,
increasing IT function competency, and effective use of
software tools are the most important factors that contribute
tothe success of BPR projects.
BPR failure factors
• Factors related to change of management systems and culture
Problems in communication: Inadequate communication of need to change ,
Hiding uncertainties in communication (Jackson, 1997);Poor communication
between BPR teams and other personnel, Lack of motivation and reward
Organisational resistance
Lack of training and education
• Factors related to management support
Ineffective BPR teams
Problems related to the integration mechanism, job definition, and allocation of
responsibilities.
• Factors related to BPR project management
Problems related to planning and project management
Inadequate focus and objectives
Problems related to BPR resources
(BPR implementation process:an analysis of key success andfailure factorsMajed
Al-Mashari and Mohamed ZairiBradford University Management Centre,
Bradford, UK)
The Wrigle Company gained competitive advantage by implementing BPR. In addition the
responses were further analyzed for potential reasons for the success or failure of the BPR
initiative against the key success factors for implementing BPR
Responses to improvement in competitive advantage, cost management ,customer
service, improvement in Quality, Productivity.
The key improvements were perceived by the respondents to be in the areas of process
improvement and organizational alignment towards the customer. Little improvement was
however noted in the area of cost reduction and productivity.
BPR implementation was focussed on process improvement especially in the area of process
management and it was not geared towards direct cost reduction or productivity improvement.
These sort of improvements may not be attained by implementing BPR alone, they may need
to be supplemented by other improvement techniques such as TQM, TPM, Kaizen among
other.
( AIBUMA Publishing African Journal of Business & Management
(AJBUMA)http://www.aibuma.org/journal/index.htmVol. 1 (2010), 16 pagesBUSINESS
PROCESS REENGINEERING FORCOMPETITIVE ADVANTAGE)
