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The main of preparing and presenting this report is to understand about the concept what business process engineering is, and how it benefited the companies in reduction on process time and costs. Another objective is to evaluate how business process reengineering enhances the capabilities and working capacities of companies. This Research will also involve the Research of those factors that companies use to develop business process reengineering a more profitable one.
Meaning and definition of Business Process Reengineering-BPR:
In business processes reengineering all the outdated processes of the business are redesigned along with the connected systems and entity's structures with an aim to reach at a remarkable performance level along with business improvements. The corporate basis for creating these changes possibly will comprise deprived performance in terms of competition, financial aspects and reduction of market share of emerging market opportunities. Business process reengineering just not mean to introduction of new technology, automation, reorganization, and downsizing of business process etc but also involve change assessment various business components such as culture, entity, technology, processes and strategies.
According to M. Hammer (2003) in his book "reengineering corporation" defines BPR as:
"Fundamental rethinking and radical redesign of business processes to bring about dramatic improvements in performance."
Whereas, according to Davenport and short (1990), business process reengineering is
"Analysis and design of workflows and processes within and between entities'
And according to Teng et al. (1994), business process reengineering is:
"Critical analysis and radical redesign of existing business processes to achieve breakthrough improvements in performance measures."
M. Hammer (2003), spotlight is on radical and fundamental of business process reengineering. Similarly according to him another process improvement technique is "Continuous process Improvement (CPI)", that mainly gives importance to measurable and small type of modifications in an entity's existing systems and processes. 'Continuous process improvement' includes its foundations in following six sigma and total quality management (TQM) solutions similar to those of Motorola Inc.
VARIOUS MYTHS OF BPR:
The most accepted management theory has produced supplementary myths than realistic tactics of business process reengineering. Business process reengineering-BPR is in the industry from 1990's, but still BPR is generally get the wrong idea and always associated with ABC, quality, client/server computing, downsizing, and numerous other management change processes in the past decades. On the basis of having conversations through interviews with higher than 20 companies, and 35 reengineering initiatives, etc Davenport & Studded (1990) identify seven reengineering myths:
Reengineering novelty myth: in spite of having familiar concept reengineering, but is now merged with the latest concepts and brings a synthesis in business. However these combinations of components were not seen ever before.
Clean slate myth: "Clean slate change" is hardly ever found in reality, despite of Davenport and Stoddard's (1994) "black sheet of paper and M. hammer's (1990) catchphrase "Don't automate, obliterate!". These phrases were used in design more often than not needs a "blank check" for execution is completed over some phased projects. Furthermore, it is assisted by groundwork conclusions of Jarvenpaa and Stoddard (1995) that gone opposing to Michael Hammer (1990). According to Michael Hammer "reengineering be capable of bringing radical besides, a innovative process of change that may not be viable under specified cost and risks of those innovative processes"
Information systems Leadership myth: with contrary to greatly hyped leadership role, Information system is usually seen as a co-worker inside a cross-functional group i.e. commonly leaded by a non information system plan leader and a non information system business supporter that got good command over various processes which are to be redesigned.
Top-Down Design myth: project implementation and putting it to start the newly redesigned processes extremely depend on working partners. Therefore, involvement of members and further critically approval and possession, the lowland roots stage is crucial for thriving business process reengineering-BPR.
Reengineering VS transformation: According to Adams (1984), Entity's transformation system or process is defined as, "Profound, fundamental changes in thought and action, which create an irreversible discontinuity in experience of a system" whereas, business process reengineering is a process of contributing to entity's transformation system. But any how BPR not means the same as transformation.
Engineering's Permanence myth: according to the researchers Davenport and Stoddard (1994), they hypothesize that reengineering has gone high in United States during1994 and may possibly turn into integrated process with greatly broader entity's experience such as another combination of thoughts that comprise awareness of reengineering.
Relationship between companies and its customers and importance of business process engineering:
The relationship between a company and its customers is not limited to just the buying and selling of a product or service. It has gained new dimensions and expanded from the buying and selling of products and services to a whole range of business practices form customer service, consulting and pricing to production and distribution. Customers have become increasingly selective due to the availability of a wide range of products and services. These changes in the market place have forced companies to rethink about their business processes. Business process reengineering (BPR) makes companies more customers focused and responsive to changes in the market place. These results are achieved by reshaping the corporate structure around the business processes. Business process reengineering (BPR) achieves this transformation, not by automation of the business processes, but by rethinking the company's tasks in a holistic and process oriented manner.
Figure: Business as a system
Raw materials, Operations, Finished goods,
Components, Processes Services
Source: Vinod Kumar Garg and N.K Venkitakrishnan, (2002), Enterprise resource planning: concepts and practice, prentice hall, p.28
Business process reengineering and information technology:
The increasing use of information technology in businesses has compelled organizations to go for business process reengineering because the implementation of information technology necessitates significant changes in business processes. These changes allow organizations to take full advantage of the benefits offered by information technology. The relationship between business process reengineering (BPR) and information technology cannot be underestimated. For instance, Wal-Mart would not have been able to reengineer its processes for procurement and distribution of its mass-market retail goods without information technology.
Michael Hammer (1990), think information technology as main support to business process reengineering-BPR that he thinks as "radical change." According to Hammer (1990) the use of Information technology to face hypothesis inborn in project processes which have been present ever since earlier than arrival of present supercomputers and telecommunications technology. Michael hammer also criticize that at the central processing unit of reengineering is idea of
"Discontinuous thinking or recognizing and breaking away from outdated rules and fundamental assumptions underlying operationsâ€¦ se rules of work design are based on assumptions about technology, people, and entity's goals that no longer hold", Michael Hammer (1990)
Michael Hammer (1990) recommended the following "reengineering principles". They are:
Organization may not be around tasks but it should be around outcomes
Those should involve in implementation process who actually rely on the perform output of the process
Consider processing of information task addicted to actual tasks which responsible for information production
Take care of geographically detached resources as despite the fact that they will be centralized as they are
Connect the activities that are parallel rather than integrating their outcomes
Keep judgment point at actual place of work, and create control up on the process; and
Gather and collect information once and at the starting place.
BPR Implementation methodology:
The various stages that a typical BPR implementation program goes through are:
Identify the needs for the BPR package: The first stage involves the identification of the needs to be satisfied by adopting the BPR package. Once these needs are identified, organizations can evaluate how ERP implementation can help satisfy these needs. Transforming the labor and machinery based productivity into knowledge and information based productivity can be the examples of the needs that a BPR can satisfy.
Evaluating the "as-is" situation of the business: The next stage involves the identification of various processes involved in the working of the organization. Then, the detailed processes in business activities should be listed. Process mapping can be helpful in detailing the processes. It provides information about the time taken to complete a process, the number of decision points, the number of reporting points and flow of information, etc.
Decisions about the desired "would-Be" situations for the business: once the structure of the current processes is identified, the next stage involves the identification of the desired attributes for each of the processes. Performance standards are set for each process by using benchmarking techniques. Benchmarking ensures that the desired organizational attributes are comparable with the best business practices in the industry.
Reengineering of business processes to achieve the desired results: in order to achieve these desired standards in business processes, organizations need to reengineer their current processes. The objectives of business process reengineering including reducing the process cycle time, reducing the number of decision points, optimizing the information flow between different functions and departments, etc.
A Study on business process reengineering by Prosci
The following are the details of a study conducted by Prosci on BPR:
The areas of chosen for conducting the research?
What should be reengineered, what is going to be reengineered and why?
Which alternative advancements/approaches are working?
Vital 'do' and 'don't' activities
Choosing a best team from alternatives
Necessities required for approval of a project
PARTICIPANTS OF RESEARCH
What processes are targets for Reengineering?
Client service was the major commonly reengineered process during the 1997 and 1999, except by fewer of a percentage. Services related to computers and telecommunication almost two times in rate, stirring it from 5th to 2nd mainly embattled business taken for processes reengineering.
Are business process reengineering-BPR projects successful?
Research members confirm to a large extent in general projected improvements as of their business process reengineering-BPR projects in 1997 or 1999 and now in 2002. More than 50% i.e. (54%) of member's likely improvements of over 30% achieved.
Furthermore to the anticipated greater improvements, Research members also got success in their projects after implementation of BPR. With reference to the study, 113 Research members are accomplished to compare project in opposition to preliminary set objectives. More than 73% meet up or go beyond their goals, among them almost i.e. 47% approximately of Research members got their project inside 10 percent.
Why are certain teams successful?
According to the Members of research there were various factors that are responsible for success of their team. Among those the above 3 factors are given below:
Dedication and strong commitment towards completion of the project with 100% success
Maximum support from top level management and conversion of support into actions
Everyone shared a common and clear vision towards the goals and objectives. The team got a single understanding and focus point for success of the project.
What did Top management do to encourage project success?
Showing outcomes from report of the year 1999, those teams got heavy success which was highly supported by top management. The projects were greatly possible to end with the over and above the organizations success expectations. The failure companies senior managers failed to give sufficient visible involvement in their organizational reengineering project.
"â€¦ not staying involved enough after the initial phase, assuming that everyone in the entity understood their vision and strategy."
An irresistible greater part of the teams had support to their teams from the senior and sponsor managers or executives in the project implementation and the majority rated that the involvement of their seniors use as excellent.
What were the problems faced while implementing BPR?
Poorly defined business process
Many complex tasks
Only one major milestone
Silence from the upper management
The wrong team members
BUSINESS PROCESS REENGINEERING AND COMPETITIVE ADVANTAGE:
To gain competitive advantage, organizations should understand the scope of a particular market and identify the various inherent differences between various markets. They need to understand what is required to become qualifiers and order-winners. Qualifiers are the most basic attributes that an organization must possess before any customers will decide to deal with them. For instance, ISO standards have become on e of the key qualifiers for any organization with global markets. Qualifiers provide the initial impetus to customers to deal with an organization but, in order to close a deal, organizations must have order-winners. The order-winners could be price advantage, quality, etc. BPR enables the organizations to optimize and organize different qualifiers and order-winners by redesigning the complete processes so as to gain competitive advantage in the market.
Some of the order-winners and qualifiers, which apply to most companies, are discussed below:
As price is one of the key order-winners in most markets, the BPR package can help identify the cost centers and assist in redesigning processes to reduce production costs. Setting up tough cost targets and putting in place a rigorous monitoring system can help a company become cost-efficient. Therefore, BPR implementation should focus on the areas in which significant costs are involved so that appropriate resource allocations can be made and management attention can be focused on them.
When a company uses price reduction as an order-winner, it should also change its corporate strategy accordingly. It needs to assess changes in lead-times, investment implications and cost-reduction potential in several areas. Without assessing these factors, the changes in the strategy will be inappropriate.
Delivery reliability and speed:
Delivery reliability has also become one of the criteria on which customers judge an organization's competitiveness. BPR can make more efficient the procurement and distribution activities and reduce the process lead time involved in purchasing the raw materials and distribution of finished products. BPR helps to reduce the time in coordinating activities among all the entities of the supply chain through the smooth flow of information between them. With the help of BPR, the lead time required to process an order is reduced significantly. The need to provide information to customers and suppliers has forced BPR vendors to implement their applications with e-commerce also.
The concept of quality no longer denotes just a state of being free from defects. Today, quality encapsulates many dimensions like performance, features, reliability, conformance, durability, serviceability and aesthetics. BPR by its redesigning capabilities can bridge the gap between the existing process and the implementation of the best process can help an organization achieve its quality objectives.
In today's competitive world, organizations need to provide products in different shapes and sizes that satisfy the requirements of the different segments of the markets. They need a variety of products in their product line. But as the product range increase, the cost and time of production increases due to the modification of production process to accommodate the changes required for each product range. BPR, through reducing the process defects and be making the old labor and machinery system to knowledge and information systems, help in integrating the functionalities and a common database, enhances the capabilities that assists organizations in this direction.
KEY GUIDE LINES TO BE FOLLOWED:
Important guidelines that an organization must follow in Business Process Reengineering to make it more efficient and profitable:
Business process reengineering is different from other IT systems/models in that its implementation is not restricted to a single functional domain. In order to take full advantage of the profitable benefits of the BPR package, organizations may/need to follow the guidelines given below:
Define corporate needs and culture:
In order to implement a BPR system successfully, a complete overhaul of the business organization is needed. Organizations should assess their readiness for change and the possibility of the implementing change in the organization. The level of difficulty in bringing about change depends on the amount of change involved. Project leaders should assess the level of difficulty they are likely to face. The top management should provide complete support for the implementation of the BPR package. Implementing a BPR package may also involves the redefinition of the roles of different functional departments, and the authority and responsibility of individuals throughout the organization.
Complete business process change:
The organization should be aware of the required changes in business process and skills and attitudes for BPR implementation. It may have the willingness to adopt changes but may not be able to assess the implications of the changes. Therefore, the organization should undergo a brief business process redesigns exercise before the actual implementation. The redesigning exercise should be carried out on the basis of the structure of the BPR package, so that there is no mismatch between the required functionalities and the functionalities provided by the BPR package.
Communicate across the organization:
Communication allows different entities involved or affected by BPR implementation to be aware of its effects on their jobs. Proper communication optimizes the implementation process, as the employees are aware of what is required of them. Besides, feedback provides the management with information needed to allay the concerns of the employees. Communication should not overstate or understate the functionalities of the new system. Overstating the functionalities would raise employees' expectations unrealistically, while understating them may leave employees unprepared for the changes required for BPR implementation.
Provide strong leadership:
Strong leadership is an important success factor in implementing a BPR package. The difference between and informal support and active leadership can be the difference between the success and the failure. Therefore, the members of the steering committee members should be able to understand the business redesign and integration. Though these may be complicated processes, the right modeling tools can help them make simpler to follow. The steering team should be trained in process mapping and reengineering methodology and it should be fully involved in the process redesign so that it can guide the team members (implementation team) properly.
Select a balanced team:
The size and complexity of BPR implementation and maintenance necessitates a balanced team of professionals. In general, the BPR implementation team consists of personnel from IT, finance, marketing, sales and production. Most companies hire external BPR consultants who provide information about the operational aspects of the new BPR system and assist the internal team.
Select a good method of implementation:
As the implementation of a BPR package involves the participation of all the departments, a proper sequence of steps should be identified to define the implementation process. Project leader should set the milestones to be achieved in the various phases of the implementation and review progress continuously against the milestones. They should define clearly the scope of the project and develop the work breakdown structure (WBS), and estimate the time required to complete each activity identified in the WBS. This will help them reach a realistic project plan. They need to ensure that there is no compromise with the quality of the new process/system.
BPR is a complex and organization wide system that requires some amount of training so that full advantage of the capabilities of the new process can be taken. The steering team should be trained in process analysis and redesign. The staff in the information technology department should be made aware of the package architecture, design and configuration. Functional managers should learn how the new process performs and how it can be useful in the decision-making process. The training varies across the different levels, and is based on the requirements of the persons using the new system or process.
The term Business process reengineering-BPR, has an imperfect records in the past. But became popular in 1990's beginning, conversely, tactics and advancements was not completely be aware or nor valued. A lot of time, upgrading projects tagged with the name "Business Process Reengineering-BPR" be inadequately designed and implemented. Organizations and their employees get embarrassed at consideration of an additional "Business process reengineering-BPR" familiarity. The concept BPR is less utilized, and modified lot of times from the actual "business process reengineering-BPR" that was earlier exists.
An organization operating in a competitive environment needs to have competitive advantage over others to attract and retain business. This can happen when different organizational functions develop strategies that complement the corporate strategy. An organization's competitive advantage can be defined by service quality, responsiveness and ability to satisfy customers' needs and wants.
In spite of this mistreatment of put into practice and imperfect name, applications of business process redesigning, connected technology and entity's structure is further accepted these days than past. Organizations go on with to reconsider and basically transform system they conduct operations. Cutthroat competitive force and a slow-moving market offer efficient techniques for entities motivated to work as efficiently and professionally as feasible.