Bpr And Its Streamlining Of It To Gain Profits Business Essay

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The Objective

I am not be exaggerating here, if I say - today, it's the era of Business Transformation. In an attempt to reduce the operations costs, companies are consolidating and streamlining their IT organizations. Efficient processes can alone help, not only in streamlining IT, but they streamline the business as well. Lean and efficient processes are the primary goals, whereas IT is just an implementation tool, as usual. In this chapter, we shall not go very deep into the mechanics of how to do BPR, but we will discuss business transformation from a strategic angle that is very important for business and technology executives.

Introduction - BPR Defined

A business process is a set of ordered activities that are related to each other and produce a useful product or service or a part of it. It can serve a particular goal and it may be for internal consumption or for a particular customer(s). Management and strategic processes may direct or form a framework for operations. Operational processes form the day-today activities like production, sales and purchasing. Processes like HR, Accounting, Help Desk are called supporting processes as they support operations.

Frederick Taylor, in 1880s suggested managers can discover the best practices to perform work, by using process reengineering methods. He also suggested, these processes be reengineered for optimize productivity gains. In Taylor's time, technology was not available for large companies to design processes to work in a cross- functional manner. Specialization was the mantra for efficiency gains.

For a BPR exercise, the top management should be committed in all respects. It is an uphill task and the employees' resistance might come in the way in indirect forms. During and after a BPR exercise, the employee participation and commitment might reduce in the existing work and also in the new initiatives. They may also try to discourage others in participating into re-engineering initiatives. The management should be prepared to deal with these obstacles by the way of proper incentives and ensuring required levels of employee participation. The time that it takes from start of BPR till the end is also very important factor in the success. Suggested optimal timings for any BPR project is 8 to 12 months. To contain the resistance, it will help if a significant amount of progress is shown in a reasonable time frame. The more difficult part of a BPR exercise may be its implementation. People are apt to do things in a certain way for years together and suddenly they are expected to follow a new process that can be radically different from the older one. Management has to device an incentive scheme and other creative ways to encourage staff to follow new processes. Communication is the key here - before anything else, the staff should be convinced that the new processes are an improvement over the older ones and they are meant to make their lives easier. BRR aims to bring process orientations and team work that can be a significant cultural change for many organizations. With BPR, the business process and people also become significant assets of companies, and that adds to tangible assets like cash, plants and infrastructure. A well planned change management exercise usually follows BPR to facilitate smooth change across the organization.

Concepts like Total Quality Management (TQM), ISO and Enterprise Resource Planning (ERP) also bring about positive changes at organizational level. They may be considered as change vehicles to implement the BPR. These concepts are well defined and formulated. They are also well supported by Information Technology that makes processes comparatively easy to demonstrable and implement. A clear under understanding and appreciation of these concepts from the grass root level is the first and foremost condition for any successful implementation. BPR is an affair at strategic level and success in its implementation is directly proportional to the agreement of project objectives with the organization's goals. Therefore, the development and effective communication of a clear business vision and embedded process objectives should be taken on a priority basis before even considering a BPR project.

The Re-engineering Process

Identifying the business processes for a BPR project is obviously a strategic decision. Instead of trying to change too many processes at a time, it might be advisable to take up a few high impact processes first and come out with a quick turnaround. This will show some quick results in favor of the BPR project and will act as a Show-Case for the remaining project. The processes taken up for the BPR project can be divided into phases with total project duration not exceeding 12 months. Change management follows each phase. A BPR project structure might involve a BPR leader at the organization level, process owners for a process or a group of processes, process re-engineering teams and employees involved or affected by the re-engineering project. For larger projects, a process committee may also be involved at the top level.

As a part of re-engineering project, the target processes are broken down to logical and manageable sub-processes. Each subpart is measured and targets are set in quantitative terms for parameters like cost, quality and time. Each sub part is questioned for its very existence, in an attempt to work out simpler and efficient ways to carry out the same task. Measurements are done for existing (as-is) and to-be state, that needs to meet the set out realistic targets. Quantitative and qualitative definitions of processes (in both the sates) can help to a great extent in overcoming the undue criticism by skeptics of BPR project.

An external consultant, not involved in day-to-day functioning of organization, can help in creative ways for taking measurements and designing new processes. We also note that the BPR project being, strategic in nature, needs to be driven from the top levels. Concepts of process prototype, process entities, process objects and process activities, though not discussed here, are very important in any BPR exercise. Information technology also plays a vital role and is inseparable from today's BPR projects.

Change Management In Indian Scenarios

We have discussed about change management in section-I. Following the experiences in Indian scenarios, some authors like Nilakant and Ramanarayan (1998) have suggested a method (for change management following BPR) very similar to the following

Establish a need for BPR project and why it's to be taken up. This needs to be understood at the grass root levels

Provision for keeping the current business running and not getting disturbed by BPR project

Establish a change management team as an integral part of core BPR team

Prepare the organization for change

Establish change team at grass root levels to drive the change by active employee involvement

Align organization structure, systems and resources to support the change

Identify and remove the road blocks in the process

Make sure the change (the new processes) becomes the integral part of organization culture. This might be the most difficult to implement however.

Even after the BPR is over, adopt continuous process improvement (kaizen) as the main stream

Devise an incentive and rewards scheme in for sustenance and innovation.

Identify and promote talent with the right mind set.

BPR As A Solution

BPR is often used by companies that are on the edge of a disaster, in order to cut costs and as a probable way to return to the game again. In some cases, as a part of BPR exercise, some companies sacrificed their in-house production capabilities and gained short-term profitability. Later they were forced to reevaluate their strategic direction.

"To reap lasting benefits, companies must be willing to examine how strategy and reengineering complement each other -- by learning to quantify strategy (in terms of cost, milestones, timetables); by accepting ownership of the strategy throughout the organization; by assessing the organizations current capabilities and processes realistically; and by linking strategy to the budgeting process. Otherwise BPR is only a short term efficiency exercise." [4]

Business Processes And Organizational Performance

Business process reengineering is the main way in which organizations become more efficient and modernize. Business process reengineering transforms an organization in many ways that directly affect performance. BPR aims to increase performance by radically re-designing the organization's structures and processes from top to bottom.

The two cornerstones of any organization are the people and the processes. If individuals are motivated and working hard, yet the business processes are cumbersome (and non-essential activities remain), organizational performance will be poor. Business Process Reengineering is the key to transforming how people work to achieve organizational goals. What appear to be minor changes in processes can have dramatic effects on cash flow, service delivery and customer satisfaction. Even the act of documenting business processes alone will typically improve organizational efficiency by 10%.

Despite the sound theoretical background and striking results, business process reengineering has not always led to stellar performance. In fact, Bashein et al (1994) showed that only 30% of BPR projects achieved performance breakthrough. Reasons for large failure include lack of sustained leadership commitment, scope creep, inefficient change management, lack of innovation and no proper incentives for going with improved processes.

The Role Of The Leader And Manager

Any BPR exercise must have the full commitment and support of executive management to succeed. The leader must be capable and willing to "drive" change. Managers in a company, undergoing major process changes must plan and act to control the fears of employees and to overcome their resistance to adapt to the changed environment. Some organizations face resistance from employees in the later stages when they begin to raise doubts about the effects of reengineering on their day-to-day functioning.

"Managers in the organizations after reengineering are compared to coaches. They do not order; they guide. They do not direct the work of others; they coordinate, facilitate and empower." [4]

Reengineering Recommendations

BPR must be escorted by strategic planning, that must take advantage of IT as a leveraging tool. The aim of any BPR exercise should be to make organization more customers centric. Any change must be driven by internal teams comprising of managers and those who actually do the work at grass root level. Help from external consultants can be taken but they can't take driver's seat under any circumstances. A long term and high level of commitment is needed from the executive leadership as well. Any BPR exercise should be time bound and should take into account the corporate culture. Constant and effective communication across the ranks can be the single most important factor in the success of any BPR project

Summary

Business Process re-engineering is proved to help in the achievement of the organization's over-all objectives. But, it will be successful only if the activities in which the processes are based are directly related to the needs and objectives of the business. BPR is often combined with other improvement philosophies like continuous improvement (KAIZEN), six sigma, and Just-in-Time to get enhanced and more lasting effectiveness.

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