What Is Business Process Reengineering Commerce Essay

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It is very important to understand the organizational processes and as Deming (1993), Senge (1990) describes system thinking, which are workflow, business processes and the impact of feedback. There would be events that might occur and effect the system. That is one important point why we should understand the organizational process very clearly so that the effect that had occurred can be included accurately into the system.

IT can provide the means to achieve breakthrough performances in an organizational system where you have to understand current and potential processes. Changes were done by Hammer (1990) at Ford, by resign of the processes concerned were involved. Cranswick (1994) reported that some Australian companies have gorn through similar radical redesigns.

As examples, FAI insurance. They used a small part of it in their total reengineering process. Reengineering was done in FAI Insurance primarily to facilitate the cross-functional thinking that is needed for the organization to succeed.

Challenge to Reengineer Process

There are two types of processes which are known as horizontal and vertical processes. The vertical process is the traditional process and at present most of the organizations use horizontal process. The reason for using horizontal process is because, order fulfillment, new product development and service delivery, things that would be hard to be managed by a competitor after reengineering is done.

There are three distinctive tenants that a senior manager should understand before going for reengineering. They are,

External Objectives - e.g. Customer satisfaction to be the outcome of reengineering.

If it is a complex horizontal process then boundaries and horizontal connection must be mad.

Information should be readily available to all team members so that it will help them to learn the process. E.g. culture change, unfiltered information.

Organizational Redesign Using BPR

It is very important to focus on outcomes rather than task, and the required outcome, to determine the scope of BPR.

Schaffer and Thomson (1992) explain on how focusing on results rather than normal activities can make a difference between success and failure to change programs.

At every level of reengineering a focus on outcomes gives direction and measurability. As examples, cost reductions, focusing on customers.

Benchmarking can be known as the most power tool in BPR. This is because by using Benchmarking it would be easy to identify goals. If Benchmarking is used well, benchmarking can shape strategy and identify potential competitive advantage. (Zairi and Leonard, 1994).

In the exact explanation by Hamel and Prahalad (1989,1990,1991) established that strategic direction via intent rather than portfolio analysis should be the key to an organizations core competencies and that through expeditionary marketing this should lead on to developing the skills required to achieve the intent. Reengineering process focus on a company what it does, how it does it, and how it should do it. The core process redesign can channel an organization `s competitive advantage (Kaplan and Murdoch, 1991). They say that the key element would be visioning the outcome of the process.

The Redesign Process

The main of the objective of BPR is to redesign the current process. Therefore information must be obtained from people who are directly involved in those processes. According to Hammer and Champy, 1993) BPR has a top-down approach even at its lowest level. Therefore BPR would take a form of a project.

BPR needs the support of top management and commitment. If BPR process needs to be done in an Organization to redesign the current system then a team should be made to do so, since it is a complicated process and done by an individual.

Most authors which have been mention in the above paragraphs suggest that the following should be in a team,

A Sponsor - Senior Manager

To oversee overall reengineering strategy - Senior Mangers

Process Owner

A team leader

Redesign team

Business returns to normal after the project is over and team will be disbanded. Genially it is recommended that an organization does not attempt to reengineer more than one major process at a time, since stress caused and disruption. If it is a major reengineering process then after disbanding one team, another team has to be formed to redesign another process. As an example Ford took 5 years to redesign his accounts payable process (Davenport, 1993c).

After redesign is done, still the improvements must be continuously done by the team. This is done by organizing work in a way where fosters interaction, understanding and responsibility come together.

Greatest Risk Perceived In Embarking On A BPR Programme.

Two types of risk are defined by Carr and Johansson (1995) when BPR implementation is done.

Technical Risk - whether the reengineering process might work or not.

Organizational Risk - the possibility of corporate culture reaction against changes. This is the greatest risk of all.

Therefore before reengineering is done it is a mist to find ways where you can minimize these risks from occurring. There are few ideas given by Carl and Johansson.

Involving top management in the reengineering process is very important. The communication should be early as possible, understanding and buy-in is created at the start of the project.

Demonstrating the success of reengineering, through implementation. This must be done by targeting pilot programmes. This is an advantage, which would help communicate strategy and reinforce management commitment and create user buy- in.

Areas for Future Research

The details given above describes very clearly what is BPR, tools and techniques of BPR, challenges that has to be overcome, the redesign process and finally the risk in implementation of BPR.

A few research topics of BPR are given below.

Using BPR on cooperate objective and organizational structure. This where an investigation is done between the link BPR and long term objectives. Also how it might affect the organizational structure.

BPR risk management

Team work in BPR

Managing BPR Projects

BPR grew popular in a very short period of time because it is a successful process where dramatic improvements can be made. Therefore the key requirement is that the senior or top level managers should clearly understand the current business process in their organizations before embarking on a BPR project. IT can provide improvements in performance in business systems and also IT plays major part in reengineering.