Business Process Redesign - Literature Review

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Literature Review

A business method or business process is a assortment of associated, and structured tasks or activities that presents a precise service or goods for a particular consumer or consumers. Very often it can be visualized with help of a flow chart as a sequence of tasks with interleaving resolutions or with a Process Matrix as a series of actions with related rules, as per the data in the process.

According to Short& Davenport (1990), the business process is defined as a group of logically associated activities performed to attain a definite business result. A process is said to be as a structed and assessed set of tasks planned to present a precise yield for a particular market or customer. It invoves a strong vehemence on how work is performed in an organization by Davenport (1993). As per their views, processes possesses two significant characteristics like, (a) They comprise of both external and internal customers, (b) They cross the boundaries of organizations, i.e, they arise across or within organizational sununits. to identify the business processes in an organization a technique known as value cahain method was put forward by Portar & Millar (1985).

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Usually, the processes are recognized in terms of interfaces, starting and end points, and in organizational sections particularly in customer units. High influenced processes must have process owners. For instance, processess involved in sectors such as, developing a innovate merchandise; ordering items from a supplier; generating a marketing sketch; processing and anteing up an insurance claim: etc.

As per Short& Davenport (1990), the processes may be defined depending on three dimensions like:

  • Entities: Processes occur between organizational entities. They might be Interorganizational( like, Electronic Data Interchange (EDI), Interpersonal or Interfunctional (such as, Computer Supported Cooperative Work (CSCW).
  • Activities: Processes involves 2 kinds of activities: i.e, Managerial ( deloping budget), and Operational (filling a customer order).
  • Objets: Processes lead in manipulation of objects and thee objects would be Informational or Physical.

Adam Smith was one of the most significant person of eighteenth century to elucidate business processes in his wll-known example of pin factory. He also identified how the output could be elevated by the utlization of labor division policy. Beforehand, in a society where manufacturing was conquered by handcraft items, one person used to do all the tasks which are needed at the time of production process. While, Smith elucidated how the activities were divided into a set of easy tasks, which would be done by specialized personnels. The outcome of labor division in Smith’s example ensued in productivity inrease by 24,000 percent, i.e identical number of workforce made 240 times as many pins as they had been making prior to the launching of labor division concept.

Its note worthy to say that Smith did not promote labor division at any cost and as such. The suitable level of activity division was explained through expermental plan of the manufacturing process. In contrast to Smith’s opinions which were restricted to the same operational domain and comprised tasks that are in straightforward relation with production process, current process concept comprises of a cross-functionality as an significant characteristic.Smith’s concept of division of labor was followed and adopted widely, whereas the incorporation of activities into a cross-functional, or functional process was not taken into consideration as an alternative choice until much later periods.

To add value for the consumers and to avoid implementation of unnecessary tasks, Business Processes are designed. A well plsnned and executed business process yeilds an augmented effectiveness (value for customers) and amplified efficiency (low prices for the organizations).

Business Processes can be represented by means of a number of techniques and methods. For example, for drawing business process in a workflow, the Business Process Modeling Notation is used as its Business Process Modeling technique.

Business Process Redesign

According to Short & Davenport (1990), the Business Process Redesign (BPR) is the examination and designing of processes and workflows in and around organizations. In 1994, Teng et al. described BPR as a vital analysis and revolutionary redesign of current business processes to attain breakthrough enhancements in performance measures. BPR scrutinizes effectiveness and efficiency of a company’s most crucial processes. It is a prominent enabler to provide the highest-quality of service, in an most creative manner, at the most competitive price and instance to output.

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To prioritize the vital processes which are based on the value at stake, Bain works with each customer. For every priority process, a view of the existing state is developed which is dependent on the operational data, by making use of a detailed process maps. Then the work is proceeded together with a cross functional client group to elucidate a sequence of principles which would guide the explanation generation level, and make a vision of the upcoming state of each process from the position up, along with the roadmap to accomplish the long term goals. In this type of project, the Bain described that they would work very closely with their clients, enlisting a group from all the operational sections who were affected at the leadership and the explanation generation phase. This permits us to eradicate waste, unwanted wait times, handovers, reports and sign-offs while ensuring the honesty of the process.

Business process re-engineering

This re-engineering is a srategy of business management, was found in early 1990s, which is useful in analysing and designing of processes and workflows in an organization. Business Process Re-engineering aimed to assist organizations to rethink fundamentally that how they perform their work to enhance customer service, cut functional prices, and become first class competitors in the market. In mid-1990s, about sixty percent of the Fortune companies claimed to possess initiated re-engineering attempts, or to contain plans to work so.

Re-engineering highlighted a holistic interest on business objectives and how processes are related,encouraging complete refreshment of processes moderately than iterative development of sub processes. There are many synonyms for Business process re-engineering such as, business tranformation, business process redesign or business process change management.

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However, BPR is more than business improvisation; it is a way of approach that helps inredesigning the work to achieve better missions and reduce the costs for organizations. Initially, reengineering begins with a high-level evaluation of the company’s missions, tactic objectives and customer requirements. Within the model of this fundamental evaluation of goals and missions, re-engineering mainly focuses on the business processes of organization. These include the procedures and steps that rule how resources are utilized to make goods and services that can meet the requirements of particular markets or customers.

Re-engineering identifies that business processes of an organization are generally divided into subprocesses and activities which would be carried out by many dedicated operational sectors in the organization. Very often , not a single individual holds responsibility for the complete performance of the whole process. Re-engineering upholds the optimization of sub processes performance which could result in certain advantages, but cannot produce dramatic enhancements if the process by itself is basically outmoded and inefficient. Because of this reason, re-engineering puts a focus on re-designing the whole process to accomplish the possible advantages to the organization along with customers. This drives for comprehending dramatic enhancements by fundamental re-thinking on how the organization’s work must be proceeded by distinguishing re-engineering from process enhancement attempts which focus on incremental or functional enhancement.

BPR looks forward to break from existing processes and to devise innovative methods of organising activities,individuals and by utilizing IT systems to support the organizational goals. This task is performed by recognizing the crucial business processes, scrutinizing these processes and re-designing them for effective and efficient enhancement and benefit. The centeral tenets of Business Process Re-engineering are defined by Vidgen et al. (1994) as:

  • Process and goal point of reference;
  • Radical modification and assumption challenge;
  • Organizational restructuring;
  • The utilization of technologies which are enabled, specifically IT.

By focusing on the obectives of businesses, the processes of the organization are analyzed, unnecessary or reductant methods are eradicated and IT is utilized to streamline and redesign the organizational operations.

BPR as Radical Change

BPR is known for radical changes, rather than incremental changes. Davenport, elucidates radical change as the only means of achieving the order-of-magnitude enhancements and developments which are rquired in present world wide markets. The existing techniques which are intended to satisfy the customer requirements are functionally dependent on incremental change and this would never produce the necessary interdependence.

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The reson behind why the change in BPR is radical rather than incremental is to avoid being immobilized by the means the things are presently carried out (Vidgen et al.,). Dr Robinson(of IBM, UK) described that speedy information technology innovation and high global competition were the main reasons why the organization had introduced the concept of radical change. He also said that the processes drives the structure of an organization if they are radically revisioned instead of existing structures. Yet such radical changes are not restricted within single organization but counterfits with other organizations to generate innovate thoughts.

Radical (possible) hanges to the organization are not restricted to the interior re-orderings and links can be counterfitted with other competitive organizations in the market. It is identified in literature studies of BPR, that developments in technology would bring oppurtunities which are intricate to envisage before the technology had been made. These provides a sense of new solutions seeking for difficulties and the assists in exploiting the unpredicted consequences, which cannot be anticipated by a pure conceptual method of approach. To its best, BPR can be viewed as a blend of conceptual way of thinking and realistic experience attained through inventive experimentation and trust.