Success and failure factors of BPR
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Business Process Reengineering is a complex process that intends to bring about radical transformations within an organization. This particular study is a pilot project on BPR that studies a store belonging to Argos, one of UK's prime retail chains. It interacts with the employees out there and observes various processes in order to come up with a framework for BPR implementation. Before getting into the fieldwork, a detailed literature review has also been undertaken through this study involving various success and failure factors of BPR and related issues like six sigma, benchmarking and importance of total cycle time.
This study consists of mainly qualitative analysis with a bit of quantitative portions wherever necessary. The primary modes of data collection includes a open ended interview involving six questions asked to six respondents working at different levels of the store that was assigned for this purpose. This interview was used as the foundation to proceed with further analysis of various processes within the store with active help from the organization. It was seen through the interview that the employees do have reservations about certain operating issues within the organization. But at the same time they are a bit wary of potential changes and hence are not willing to freely talk about the whole issue. It basically shows two main areas of improvement namely in supply chain and inventory management and also in the field of customer relationship management.
Further analysis of the processes has shown that due to the usage of multiple outdated legacy software, the supply chain has become slow and unable to handle the recent growth. That is why Argos is working with Oracle and Accenture to overhaul the software system. Along with these technological modifications, some strategic changes have been proposed through this study regarding the inventory replenishments strategy. It has proposed a more frequent replenishment backed by cutting edge business forecasts and other related measures. As far as customer service issues are concerned, a problem with delays in delivery has been observed and hence more automation in the process along with some amount of outsourcing is suggested in order to save costs as well as increase efficiency by reducing cycle time.
Throughout this study, it has also been seen that the proposed BPR processes can meet with employee resistance owing to their own insecurities and practical problems. That is why it has been advised to have a more compassionate HRM policy ensuring proper training and support for the employees. Nevertheless, it has to be accepted that due to time and resource constraints a few important aspects could not be analyzed or implemented in through this study including the implementation of a Six Sigma process and its implementations. A longer duration for implementation and observation of these issues could have generated more insights. Nevertheless, this study has provided with an opportunity to venture into this complex topic of reengineering a retail outlet and we hope that it would be a good foundation point for the future researchers.
Business Process Reengineering (BPR) is a complex process that calls for almost a radical redesigning of the core business processes inside an organization in order to achieve rapid developments in terms of productivity, quality as well as cycle times (McAdam and Donaghy, 1999). In this process, companies start with an open mind without any presumptions and rethink the whole process in an effort to deliver better value to the clients. They bring about revolutionary changes in their value system and put extra emphasize on the customer needs. They also restructure the organization and do away with unproductive activities especially in two important areas. Firstly, the functional organizations are redesigned into different cross-functional teams. Second, modern technologies are used to improve dissemination of knowledge as well as decision making.
Business Process Reengineering proposes five major steps to be taken by the managers to achieve dramatic changes in their organizations. These steps include, refocusing on the company values based on customer needs, redesigning the core processes using modern information technology, reorganizing the teams across function by attributing end-to-end responsibility to them for a whole process, rethinking existing organizational as well as people issues, improve business processes across the organization (Peppard and Fitzgerald, 1997). Business Process Reengineering is used by the companies in order to achieve certain results that reduce costs as well as cycle time. Business Process Reengineering reduces costs and cycle times by eliminating the activities as well as the employees who obstruct productivity (Ranganathan and Dhaliwal, 2001). When the teams are reorganized, it decreases the layers in management and removes hierarchical boundaries thus accelerating information flows which reduce defects and errors in the whole process. It also helps in improving overall quality by decreasing fragmentation of work by establishing clear responsibilities as well as ownerships of processes. So, the workers at every level get responsibility for respective outputs and can also measure their own performances based on regular feedbacks.
For this particular study, UK based retail chain Argos is being used as the subject upon which the principles of BPR will be tested. Argos is a fully owned subsidiary of Home Retail Group, UK. Argos is the pioneer of Multi channel business retail. With 33,000 employees working to support over 700 stores in UK and Ireland, Argos is a £4.3 billion company. The intention is to see how operational efficiency can be improved within the organization through BPR and for this purpose a certain Argos store was picked up for the preliminary study. It was done with active support from Argos' side and for last few weeks I have worked with close cooperation with the store manager. The retail industry is a business that is fast moving, complex, and constantly changing. It is an industry where only the most innovative and well managed organisations can survive and succeed (Ranganathan and Dhaliwal, 2001). The retail industry generates revenues through the sales from supermarkets, cooperatives, convenience stores and nowadays even through online stores etc. Traditionally, there were various marketing strategies that allowed the retailers to continually promote their companies by attracting new customers. But the fierce competition in the contemporary markets has necessitated better consumer relationships and the capacity to follow up with them (Peppard and Fitzgerald, 1997). The increase in disposable income as well as the changes in lifestyle of these consumers have opened new vistas in retailing and have also increased competition. The managers in the retail sector must be innovative as well as prudent enough to survive in this cut throat environment making sure that every necessary step towards managing change has been taken and they should be ensuring delivery of quality standards in customer service so that the firm builds strong brand loyalty among the consumers towards them.
Here, we have to see that the process of BPR is closely associated with project management and hence we should also take an overview of project management before getting into further details. A project is a temporary business activity, one having a well defined beginning and ending. They are undertaken to accomplish particular goals and objectives (McAdam and Donaghy, 1999). The temporary nature of a project, as against the more repetitive functions like operations, requires a different management approach. Project Management is a management discipline concerned with the planning, organization and managing resources for successful implementation of a business strategy which meets all its goals and aims. This particular study is also a project that has been undertaken to see the impact of the business process reengineering process on the supermarket chain Argos.
The primary objective of Project Management is to achieve all the project goals within the pre defined resource constraints. As such, it shares many tools and techniques with Business Optimization and Modelling (Peppard and Fitzgerald, 1997). The generic constraints of any project are time, scope and cost; also referred to as the project triangle. For my project, the constraints are time: 3 months, scope: a specific utility within the operations function which is yet to be allocated to me by the company and cost: I would have to work incurring no financial costs for the company; as such the only costs incurred are my time and efforts. I would be working under these constraints to optimise the reengineering project. Business Process Reengineering (BPR) is a management approach that aims at implementing improvements by elevating efficiency and effectiveness of the business processes. The fundamental strategy adopted by organizations in this area by looking at their operations from 'a clean state'. More specifically, they are looking at what can be done in a better way if the whole process function were to start from scratch.
Reengineering is the fundamental rethinking and the radical redesign of business processes to achieve dynamic improvements in the areas of cost, speed and quality of service (McAdam and Donaghy, 1999). Many of the recent developments in the management sphere can be attributed to reengineering. The cross functional team is one such illustration, developed out of an effort to reengineer the separate functional departments to a mutually coordinating and interdependent process utilities. The Management Information Systems, ERP, Supply chain management, Knowledge management and many others have been developed by reengineering (Ranganathan and Dhaliwal, 2001). BPR derives its existence from various interdisciplinary components, though the four most affecting areas are: Strategy, Technology, People and Organization (Peppard and Fitzgerald, 1997). A process is viewed as common framework, considering these dimensions.
Michael Hammer and James A Champy were the first proponents of this concept. They began by criticizing the rigid departmental approach in many organizations. In a series of publications: The Agenda, Reengineering the Corporation, Reengineering the management, they argued that a single team that works under diluted responsibility and reporting structure would be more useful to the organizations. The result was the development of Cross Functional Teams. They later expanded their arguments to include Suppliers, Customers and distributors. Reengineering is very difficult to implement in an organisation. It causes widespread discomfort among the employees and usually experiences a strong resistance to change. The primary reason being that, over the years, BPR has been used effectively by organizations, however, the first thing that BPR results in is the layoffs. BPR, though a powerful organizational thinking, has not been able to achieve the expectations for the following treasons:
- The primary assumption of the BPR system is that the single most factors affecting an organizational performance is the inefficiency of its operations. True, processes can always be improved at any level, but that doesn't mean that they are inefficient.
- It disregards the 'status quo' by looking at an organization from a 'clean state'.
- It is not an effective tool to focus the improvement strategies on the organizational constraints.
As a matter of fact today most organisations are facing great challenges in this regard and they are feeling the need to become more and more competitive through a special focus on organisational design, knowledge management, hierarchical structures performance management as well as quality control. It has always been difficult to find a strategy that encompasses every aspect of this issue. Experts have suggested a number of strategies to manage changing times in organizations. The concept of BPR is one of the latest in this league. We have seen various facets of BPR earlier. Collectively, we can now define BPR as the fundamental rethinking as well as radical redesigning of the business processes that intends to achieve revolutionary improvements in critical aspects of the business with contemporary measures to improve various aspects of performance such as quality, service level, cost and speed (Hammer and Champy, 1993). As this definition suggests, it is desirable on part of the organisations to do away with their archaic practices as well as processes, policies, principles as well as structures that negatively affect the performance of the organization. That is why BPR is primarily about redesigning the processes within an organization (Balle, 1995). BPR can also be defined as the re evaluation or redesign of the firm's business processes as well as organisational structures in an effort to achieve marked improvements in certain critical success factors namely cycle time, quality, productivity as well as customer satisfaction (Tapscott and Caston, 1993). This particular definition differs from the previous one as it makes a specific reference to the process (Poh and Chew, 1994). It can also be defined as the analysis as well as design of workflows and processes inside the organizations.
BPR is basically a tool for planning as well as controlling change (Morris and Brandon, 1993). It offers redesigning and improvement both in depth (i.e. organizational roles and responsibilities, organisational structure, use of technology, appraisal and incentives, shared values as well as skills) and in breadth (i.e. activities that are performed with long term goals in mind) (Hall et al., 1993). Some of the experts take it a step further and explain that BPR is just a part of the necessary steps in the radical alteration of processes (Davenport, 1993). So, there is a need for "process innovation" in BPR that can lead to new strategies and designs and mobilize both people and technology towards a singular objective (Poh and Chew, 1994). So, we can see that definitions of BPR vary for person to person but overall it involves a renewal of existing processes and involvement of technology as well as strategic thinking.
The primary objective of this study is to analyse how implementing BPR can improve process efficiency. BPR involves revamping a process function to a great extent. The process architecture and the associated quality manuals are changed. Implementing such an extensive strategy comes with high initialization costs and time. Customer Service will also be affected during the transition period. I would be performing a cost benefit analysis of the proposed BPR implementation. Secondly, many organizations have been using Business Modelling software based on the concept of Six Sigma. Six Sigma, though very instrumental in being able to improve operational efficiency, is very technical in nature. It is often criticized that it neglects the human factor in a business process and totally focuses on process automation. I have tried to show that BPR and Six Sigma can go hand in hand. These strategic initiatives are to be used by organizations in a complimentary fashion.
The research problem that this particular study wished to investigate was to see how process efficiency can be improved within Argos. For that purpose, I worked in the operations function in one of the retail stores of Argos which was allocated to me by the company. I have adopted the principles of Project Management and Business Process Reengineering during this study in order to analyze and then suggest modification in the existing structure. I have prepared a To- Be architecture of the process function, and compared it with the as -Is and proposed recommendations on how the process can be improved with the help of these understandings.
Throughout this study, I have sought to answer the following research questions:
- What are the current drawbacks in the process utility within Argos?
- Argos has been successful and has done well over the last couple of decades in its field of operations. But that does not mean it has nothing to improve. With time, everything changes and hence even the successful organizations must make certain changes. Moreover, the initial observation of the existing system and interaction with some of the employees there has given some ideas about what is lacking in the situation.
- How can BPR be used to improve process efficiency within Argos?
- Here the study will explore the fields that can be targeted for a BPR initiative. This can be the supply chain or the store layout or the organizational structure. It has to be seen which requires it the most and which would suite these procedures.
- What are the challenges involved?
- This study would also see the possible difficulties in this implementation procedure and if possible, would try to suggest remedies for the same.
- How to manage service delivery during the transition stage?
- Another important issue is to ensure that the system does not become unproductive while going through a transition because it will have significant negative impact the business. So, it would be seen how to manage these issues.
Argos serves over 130 million customers growing at an annual rate of 20%. 26% of these transact online or through the phone. 18 million families or about two thirds of the English population have an Argos catalogue. It is amongst the most respected Brands of the UK and before being acquired by Home Retail Group, even featured in the FTSE 100 league (Antony and Banuelas, 2002). With over 170 different product groups, Argos is a revolution which has single handedly changed the meaning of cost effective retailing over the past decade. Offering home enhancement and general merchandise products, Argos works on an innovative business model. Customers can browse through the entire catalogue online, buy and pay online. Alternatively, they visit any of the 700 branches, browse through the physical catalogue, check the product availability via the in house kiosks with the product ID, order, pay and collect over the counter. Business turnaround at Argos happened in March 1999, when it was acquired by GUS plc (Antony and Banuelas, 2002)... At that time, Argos was primarily a single channel, store based retailer, selling a smaller range of general merchandise, concentrated primarily on toys, jewellery, house wares and electrical. In 2000, Argos, the GUS home shopping business, Reality UK operations were restructured to form the current business model. In 2000, a financial services wing was set up to offer credit and warranty products to the customers of Argos.
Argos is a pre-eminent retail brand in the UK and Ireland. The business runs by leveraging on the economies of scale. This is reflected by the fact that the average transaction size is just around £30, while the transaction numbers are around 5 per customer in a year (Schroeder, 2003). Leadership in multi channel product distribution continues to be the prime forte of Argos and is the key differentiate to the customers' shopping experience, as compared to the competitors, by enabling the customers to shop the way they want. Around 40% of the total sales are through multi channel - internet and phone/ store for home delivery. The fastest growing channel, over the years, has been the online reservation for in store collection. The feature is available at every store.
Business Process Reengineering:
Having explored multiple definitions of the business process reengineering, now let us see various implications of the same. Simply speaking, BPR is a basically a management approach that intends to enhance organizational performance by enhancing the efficacy of business processes across the organizations (Watson, 1993). BPR looks at the existing business processes remaining unattached to them and tries to determine how these processes can be aligned in order to optimize the ultimate performance of the business.
Impact of BPR on Business:
The prime motive of any business process is to improve productivity and lead to better profitability. BPR is also a way of reorganizing the processes within the business organizations in order to break the traditional barriers in various processes that have been built over the years and hence are very difficult to do away with (Hall et al., 1993). By this process of diluting the functional divisions, BPR makes the businesses more responsive, better's customer services and improves quality. BPR brings about visible structural changes throughout the organization and often obliterates existing frameworks (Hall et al., 1993, Shin and Jemella, 2002). The conventional hierarchical thinking process is removed from the organizations and a process oriented view takes over the organization with the implementation of BPR. So, the work is now defined in terms of the set of processes instead of the functional boundaries in which they exist. This tactical shift can be attributed to changing business goals in recent times (Tonnessen, 2000). But it has to be noted that a degree of risk can always be associated with these changes. For example diluting the functional barriers within an organization can disturb existing structure, confuse people and also create insecurity in the upper echelons of the organizational hierarchy.
The emergence and prominence of Information Technology has also played an important role in development of BPR process. It has enabled sophisticated re-designing processes which were not possible earlier due to technical or resource limitations (Tonnessen, 2000). So, the business processes must be analyzed with respect to the changes and improvements that IT can provide to them in order to solve existing problems. IT can also increase the value of the information exponentially by making it easier to collect, compose and categorize. Moreover, BPR ultimately redefines the job descriptions in the organization. It might also create a new breed of employees to handle new technologies and make another breed of employees obsolete by replacing the manual systems with technology (Hall et al., 1993, Shin and Jemella, 2002). This is also a cause of concern because it leads to HRM issue like removing or retraining the obsolete employees. So, the employees must work as part of the team and should be empowered to take decisions. So, BPR also necessitates an effort towards building effective teams that work together with close co-operation and for that reason there must a system encouraging socialization and familiarization among the employees at various levels and functions within the organization.
Now, let us have a look at some other important concepts that are closely related to BPR and can be useful in this whole process.
Six Sigma: The concept of six sigma was initiated by the Motorola Corporation in an effort to improve their quality measures by redacting the rate of defect to about 3.4/million. Basically it meant that if they produced a million pieces of a certain item, there can be a maximum of 3.4 defected items in the lot (Linderman et al., 2002). It was a marked improvement and in fact and audacious one considering the previous benchmark of For Sigma, which allowed up to 6,200 defects per million (Linderman et al., 2002). But it is not only limited to reduction of errors and defects but also about the improvement of the process. It goes beyond the statistical tools as well as metrics it uses and becomes a philosophy that encompasses every activity within the organization and brings about overall improvement in productivity as well as profitability. This process generally includes five different stages namely definition and quantification of the problem, measurement of the performance and determination of the defect levels, analysis of data and performance of root cause analysis, improvement of the quantity of defects and controlling the processes in order to ensure continuous sustenance of the improvements that have been achieved.
The success and popularity of this concept can be attributed to several factors. It has received widespread acceptance most because it involves the whole management, makes adjustments according to culture as well as employee attitudes, puts special emphasize on organization structure, boasts of standard training facilities on the six sigma methodology as well as the tools, enhances the skills in project management and links the quality control process to the overall business strategy, HRM strategy and customers satisfaction (Antony and Banuelas, 2002). It is also important to use the structured methods, pick the specific processes for implementation of six sigma improvements, employ specialists to work on it full time and relate the financial results as well as other business benefits to the bottom-line (Schroeder, 2003). Some researchers classify Six Sigma as a method of setting and achieving goals (Linderman et al., 2002) and hence emphasize on the importance of the clear and challenging goals that are strictly specified and made known to everyone involved. This also necessitates other efforts like performance appraisal, rewards, incentives as well as training for the employees to ensure the desired levels of performance.
Six sigma was initially introduced in an effort to control the variations as well as the defects in the manufacturing processes. But over the years, even the service industry has employed it with a great degree of success. Especially the financial institutions as well as healthcare organizations have benefited by using this concept. Success of some iconic companies like Motorola and GE has made it a very significant development in the recent decades but it has to be seen that there are still a lot of many other companies have been dissatisfied with the results from their six sigma projects (Hammer, 2002). These failures have been attributed to the lack of involvement of the customers as well as the supplier, lack of coherence with the overall business goals and the use of it just as a tool instead of a complete organizational improvement approach (Velocci, 2002). Also, some of the six sigma processes are not directly linked to the profit making functions of the organizations and hence are overlooked by the people (Velocci, 2002). Nevertheless, some researchers opine that six sigma is too analytical and less creative and hence we might not be suitable in every case.
Benchmarking: It can be defined as the process of continuously measuring and comparing the business processes inside a certain company to the same in one of the leading organizations in the same sector. This is done in order to get a comparative understanding of its own standards so as to identify the problems and implement improvements (Watson, 1993). The American Productivity & Quality Centre (APQC) defines it as a systematic as well as continuous measurement process. It is a process of continuously measuring as well as comparing an organization's business processes against the business processes of the leaders in that industry anywhere in the world so as to gain information that can help the organization in taking action to improve its own performance.
Benchmarking can be described as a more sophisticated version of reverse engineering of the successful competitive products. Since then, it has evolved as a process of continuous comparison and improvement in the process as well as strategic levels and also with a global point of view. There are several types of benchmarking that are being used in various organizations nowadays namely, internal, external, competitive as well as generic benchmarking (Watson, 1993). Photocopy pioneer Xerox is often credited using this process in the late 1970s when it applied this benchmarked technique with its Japanese partners. Originating in US, benchmarking has gained worldwide acceptance around the world in the last few decades. In the UK, we have seen the initiatives like UK benchmarking index, and Cranfield Best Factory that have worked exclusively on this (Zairi and Ahmed, 1999). The process of benchmarking at its core is a comparison between multiple organizations and their best practices. As a matter of fact it is performing a gap analysis through benchmarking to understand the procedural and strategic differences between itself and another company that it sees as a successful one. Generally it is done between two companies and procedure is generally simple. But in an effort to reduce complexity, it might lose out on the nuances of the trade-offs that might exist between two companies. A spider-web diagram is a method that is more elaborate and it allows multi dimensional analysis and can analyze multiple aspects for different functions (Ahmed and Rafiq, 1998). There are other such tool but they are beyond the scope of this discussion. Irrespective of the tools used in the benchmarking process, some experts allege that it actually limits the levels of ambition. It just aspires to take the company to the level of the best one in the industry but it would not know how to surpass it. Also it is not easy to unanimously define the definition of the best in the industry because the best will depend on what criteria is used to decide and also on which year it is measured (Zairi and Ahmed, 1999). Also, there is an issue with the availability of proprietary information from the companies against which the analyzing farm is benchmarked. They might choose not to disclose specific details in order to maintain their competitive advantage and hence this exercise would not have much value (Pulat, 1994). Nevertheless, a lot of companies have been reported to have achieved significant development in their processes using this practice. Companies like Chevron, Hewlett Packard and Hughes Communications have publicly attributed their success to effective benchmarking processes and consequent transfer of industry best practices.
We have defined BPR before. But there are many other aspects to the process of reengineering. It differs from most other process improvement approaches as it does not focus on the existing processes but tells us how they should be in order to achieve better performances (Attaran and Wood, 1999). The intention is not to change or fix the errors in the existing processes but to see whether they are necessary at all and if not then come up with a completely different framework (Zinser et al., 1998). So, the key principles reengineering are ambition, focus on the processes, evaluation and questioning of the fundamental assumptions within the organization and the processes, and use of information at a broader level in order to measure the processes (Peppard, 1999). There is also a need for integrating the redesign process with the corporate strategy as well as organizational visions of the underlying business. It has been implemented by several companies in the past with varied degree of success. Nevertheless, both the service sector (Hall et al., 1993, Shin and Jemella, 2002) as well as the manufacturing sector (Hall et al., 1993, Tonnessen, 2000) over the world has applied it. A success story are largely well documented and available easily in the public domain but it is difficult find the details of the failures and hence are very difficult to analyze (Attaran and Wood, 1999, Hammer and Champy, 1993, Zinser et al., 1998). So, we can say that an improper choice of the processes can result in the failure of reengineering. In general, experts suggest a bigger breadth and depth in the process meaning that they should include as many activities as possible to ensure that every aspect of the organization is improved through the process. The depth in the BPR process can be measured by six distinct elements namely the roles and responsibilities, employee incentives, organizational structure, IT, shared values as well as skills (Hall et al., 1993). Also important is the suitability of the particular reengineering methods to the certain organizational context. The process reengineering can benefit all types of firms including manufacturing and service but the processes must be selected with care in order to fit respective organizations.
There are several success factors that can be sued to measure the efficacy of reengineering efforts. These include increased productivity, reduced cost, improved speed, improved quality, reduced business cycle, decreased response time and finally, increased profit (Attaran and Wood, 1999). The most commonly used BPR tools are the investments in IT and building of cross functional teams. It should also be noted that the organizational as well as national culture also has a significant in the success of these processes. For example, BPR was pretty successful in the US and most places in Europe (Hammer and Champy, 1993, Zinser et al., 1998). But the Nordic countries did not accept it much because they have a very democratic work culture and strong employee participation which did not suite the top down approach of BPR (Tonnessen, 2000). Nevertheless, the prospect of radical transformation attracts even the ones who are not comfortable with the overall philosophy. That is why in recent times we have seen a combination of this process with total quality management (TQM) that has been here for quite some time in those countries (Tonnessen, 2000). So, ultimately the cultural and other aspects which can vary from place to place and organization to organization, have a significant impact on the success of these BPR processes. But ultimately it depends on the demographic mix of the workforce too. In this particular case, Argos has a fairly homogenous workforce and hence cultural diversity is not an issue right now.
The importance of Cycle Time:
Reduction of cycle time is one of the most important aspects in any reengineering process. It has been regularly brought up by the researchers that cycle time reduction is one of the most potent competitive weapons of the companies in the 1990s (Stalk and Hout, 1990). But still an s lot of firms have a very limited understanding of the same and they take time compression measures very carefully and generally link it purely with the cycle time reduction in the production processes. However, the concept of total cycle time (TCT) was forwarded by some researchers by stating that it is intended to express how one can apply these short cycle times productively to each and every segment of a business and not just limited to manufacturing processes (Thomas, 1990). The distinction here is important and that is why the total cycle time compression programmes must be directed towards all of the work processes and it should be linked to customer needs and the effort should be directed towards satisfying the consumers.
Reduction of TCT leads to some direct benefits at the bottom of the process. As we know, the lead-time is made up of two consecutive components in a supply chain namely the order flow and the material flow. So, if the material flow cycle time is compressed and the open information channels are synchronized, they can have a very positive impact on the supply chain performance. Actually, it is different from the production delays which are dependant on technological processes. The order information flow is theoretically instantaneous right from the marketplace to all the upstream stakeholders (Mason-Jones and Towill, 1997). The competitive benefits from the usage of marketplace data by each player throughout the supply chain is metaphorically summarised by Sabath as "When each person plays from the same sheet of music, the delays get minimised" (Sabath, 1995). But the issue of information sharing is not so easy in practice. There might be hierarchical drawbacks and bureaucracy in the system preventing open interaction and communication in introducing unnecessary delays (Macbeth and Ferguson, 1994). In the globalized marketplace of today, most of the companies are now competing with practically the same machines, technology as well as expertise. So, business strategy is the only place they can differentiate and move ahead of the competitors. Implementation of a successful time compression strategy might be one of those strategies. It does not only involve the usage of new machines or technology but must include a change in the thinking process and organizational culture to provide the necessary thrust towards improving TCT (Towill, 1996). It not only makes them more acceptable to their target consumers but also gives them an edge over the competitors. This procedure is a rather holistic procedure and must involve each and every stakeholder in the organization.
Coming to some more detailed and technical aspects of this process, let us have a look at process mapping. It basically helps in visualizing the process improvement activities and makes the analysis of the process easier. It should be understood that process mapping is different from usual flowcharts or other such diagrams. It is a complete framework that shows us the relationships between various activities, data, goals as well as people. There are generally two different kinds of process mapping namely value-added and cross-functional process map. The later can also be called process interaction map. Value added map tries to figure out of a certain activity is adding any value to the process. Cross functional maps show the activities done by different functions as well as the interactions between them (Savory and Olson, 2001). Process mapping can be a very useful tool that improves efficiency as we can see the control breakdowns, unproductive utilities, bottlenecks, redundant steps, non value adding activities as well as the root causes of the problems (Keller and Jacka, 1999, Savory and Olson, 2001, and Paradiso, 2003). But it should be noted that process mapping ca not detect the cultural differences of political implications as explained above and it has to be done only by the managers in control (Biazzo, 2002) indicated. It has also been used by a lot of manufacturing and service organizations in the past and has seen many success stories. Various organizations have received the various degrees of success in various fields using process mapping. According to some of them, it has simplified the claim process or work done that has helped in improving productivity as well as in increasing speed (Denton, 1995, Keller and Jacka, 1999), helped employees to understand their role and importance within the organization and the impact of their work on everyone else (Keller and Jacka, 1999, Rucker, 2000), increased the value added time spending the process (Rucker, 2000, Mehta and Fargher, 2005), reduced cycle time in the productive processes (Denton, 1995, Keller and Jacka, 1999, Mehta and Fargher, 2005), increased the accuracy in order taking process (Denton, 1995, Keller and Jacka, 1999), reduced the rates of errors and defects by solving various problems ( Denton, 1995, Mehta and Fargher, 2005) and clarified the importance of various functions and the relationships among them that has in turn reduced the problems in interface.
Based on various critical success factors and empirical evidences that have been mentioned above we can describe the following key determinants of the results of business process improvement endeavours:
- The Top Management: The top management must be involved in the process. Without their active participation, there is no use of educating their subordinates just for the sake of doing it.
- Human Resource Management: HRM must not ignore the impact of the new changes on the employees and their morale. They must know how the changes can impact the employees and they should be able to train the employees to face the same without creating any discontents among them.
- Strategic alignment: These processes should be directly aligned with the overall strategy of the organization as well as the core competency and long term vision of the company because a conflict in ideals might ruin the chances of these companies.
- Performance measures: There has to be strict performance measurement policies in order to evaluate the results of any process. The choice the determinants or metrics for measuring the success of these should be objective, comprehensive as well as reflective of all the important criteria in the whole process.
- Projects for process improvement: The projects should be chosen with utmost care and they should be broadly defined in order to include as many activities as possible so as to make sure that the resulting improvement is spread throughout the entire organization and is not limited to only that project.
- Business environment: These new processes necessitate new training, technology implementation, recruitment, and data requirements. So, the changes that take place in the external environment must also be considered during this process to analyze the possible repercussions of any radical changes.
- Sustainability: It has to be seen if these radical changes brought about by the BPR processes replacing the tried and tested methods are sustainable. Because if they turn out to be one off processes not able to maintain themselves, it will be a wastage on all fronts (Popoff and Brache, 1994). It can be done by forming a structure that avoids backsliding, and hence there should be a problem solving system that consistently focuses on the possible issue that might arise in these cases. Overall, there should be quantifiable and long term objectives to help the management understand the efficacy of the processes.
Success and failure factors of BPR:
Now, let us have a detailed look at the expert opinions on various success factors of BPR along and also some of the factors that can lead to the failures. In general, ambitious objectives, creative problem solving teams, process oriented approach and integration of technology with the process are considered as the primary success factors for BPR initiatives (Peppard and Fitzgerald, 1997). On a different note, some other researchers have pointed out to four broader factors namely culture (Hall et al., 1993, Peppard and Fitzgerald, 1997, processes, structure and technology (Ascari et al., 1995). Ascari also found that the firms that implemented the BPR agreed to the fact that the change it brings about in their culture is in accordance with the overall rethinking by the organization in an effort to rework its fundamental business process. But the scope as well as maturity of the business processes and the nature of these changes vary from firm to firm and hence can not be explained easily. Also, when emphasize is on building cross functional teams, there is a significant change in the organizational structure. The business process architectures are important in this regard as explained by certain researchers (Maul et al., 1995). In simple terms business process architectures can be defined as the definition of an intertwined group of business processes.
A research carried out on the BPR practices in Singapore has used comprehensive feedback from the involved people to get a complete picture of the situation (Ranganathan and Dhaliwal, 2001). It has used a questionnaire based survey that was mailed to the people from the mailing list obtained from the data processing management association. These people were the ones involved in various professional organizations in various capacities and it showed that around 80% of the Singapore organizations are now either implementing BPR or planning to do so in the near future. They informed that BPR has become essential because of increasing competition in the market and rapidly changing environment. But it should also be seen that the human factors can obstruct these changes happening within organizations because in general people prefer to maintain status quo and feel insecure by changes. So, this human resistance might lead to the failure of any BPR project (Peppard and Fitzgerald, 1997). That is why the changes must be communicated and their utility should be explained to each and every person from top to bottom.
The Critical Success Factors of BPR include many dimensions within them (Al-Mashari and Zairi, 1999). These dimensions include management of change, competency of the top management and the amount of support from them, system structure, project planning as well as management, and IT infrastructure (Peppard and Fitzgerald, 1997). There are some more aspects of critical success factors that must be aimed by the BPR efforts to achieve the desired level of success in business. Managing radical changes within the organizations effectively is a very difficult job and effective communication is very crucial to ensure support to the BPR project and hence it needs effective leadership that can coordinate deployment of the resources in order to accomplish the objectives of the project as outlined at the beginning.
Furthermore, in order to identify the critical success factors of BPR within an organisation, it is necessary to get a clear understanding of the organisation itself because there are many factors that vary according to organisations in both public as well as private sectors. Many factors should be considered in the public sector in order to bring about radical changes through BPR. These factors include strict hierarchies, bureaucratic culture, multiple stakeholders, slow decision making processes and policy decisions, overlap of multiple initiatives, wide range of activities, and finally staff resistance, which are common sights in most of the public sector organisations. But it is often suggested that especially for the public sector, human resource issues are of pivotal importance. They can not simply be removed or fired at will unlike the private sector and there can be workers unions and other such pressure groups in the equation. That is why it is often stressed that although these organizations are often hierarchical and top down in approach, the communication at all levels must be managed throughout the process in a manner so that no one feels exploited or neglected (Smith, 2003). In order to implement BPR, an organisation must understand its own structure first and then it must ensure that the vision is accomplished in time and as initially envisioned (Berrington and Oblich, 1995). The commitment levels among people must be enhanced by proper communication which provides a sense of belonging to them. So, in public organizations, it is the people issues instead of technological nuances that matter the most in determining the level of success for BPR initiatives (McAdam and Donaghy, 1999). Also, pointed out that they believed that the most important factor for the successful implementation of BPR in public sector organisations was enlisting customers.
The issue of culture also becomes an important factor for BPR especially if the organization employs a culturally diverse workforce (Peppard and Fitzgerald, 1997). Management techniques like BPR are affected severely by the differences in culture because of their inherent characteristics. What works in one country might not work at all in another. For example, experts have analyzed the difference between the difference in German and American organization is implementing similar projects (Ranganathan and Dhaliwal, 2001). They have thoroughly explored how the American concept can be transferred to the German environment more effectively. This study concluded that managers as well as employees need to have strong commitment for change. In Germany, the stress was more on the processes and the customers. There were some more factors that were seen as important for BPR success in Germany. These factors include the level of autonomy among the stakeholders, empowerment of the employees, cultural aspects and organisational environment etc (Hall et al., 1993). We also have to see the issues that underpin a BPR programme using research that is undertaken on a range of different companies of varying sizes (Maull et al., 1995). It identified five key issues regarding this namely, scope for change, IT, performance measures, human factors as well as business process architecture.
Failure factors of BPR: In the past, more often than not we have witnessed failures of BPR processes along with the successes too. Many experts have also indicated many failure factors in implementation of BPR in the organizations. Some of the experts suggest the failures of BPR implementation that include managers' personal problems like incompatibility and arrogance, resistance from the staff, crisis in the organization, increasing cost, lack of vision, etc (Aggarwal, 1998). There are other failure factors like the absence of a process perspective, a very fixed or rigid process that is not flexible enough so as to be compatible with new developments, lack of involvement from the employees side in the decision making processes, assigning people who have no understanding of BPR, technological limitations, too much focus on cost reduction as well as downsizing, using very weak teams, and problems in inter organizational communications (Hammer and Champy, 1993, Peppard and Fitzgerald, 1997, Ranganathan and Dhaliwal, 2001). So, experts stress on the point that reengineering can be successful only if it starts with a new vision, mission and also a new set of customers. Moreover, some businesses report that financial and human resources deficiency coupled with inadequate IT infrastructure hamper the growth of such projects (Al-Mashari and Zairi, 1999, Mumford, 1999).Some other factors in this regard which are often cited by the experts are the lack of support from the people within the organisation including the members of the top management, absence of strategic vision, rigid organisational structure, as well as lack strong leadership baking the BPR efforts (Aggarwal, 1998, Ranganathan and Dhaliwal, 2001). So, to wind up, we can see that the prime reasons for BPR failure are, lack of support from the top management, lack of financial resources (Aggarwal, 1998), employee resistance (Stoddard et al., 1996, Ranganathan and Dhaliwal, 2001), IT related issues (Al-Mashari and Zairi, 1999, Smith, 2003), and ineffective teams implementing BPR, absence of project management efforts, and gaps in communication among the hierarchies.
This particular section makes an effort to explain and justify the research methodology that is being applied in this study. As we know, it is of paramount importance in any serious research study. The choice of methodology ultimately decides the results of the whole process. This particular study consist mainly qualitative analysis with a bit of quantitative portions at places. The primary modes of data collection includes a open ended interview involving six questions to six respondents working at different levels of the store I was assigned. This interview was used as a pilot study to proceed with further studies. The rest of the study has been based on the understanding that was received from this interview. As a matter of fact, for a study on BPR, it is difficult to come up with any conventional methodology. Experts have suggested a couple of approaches for this purpose namely the case study approach and the open ended interview approach.
Case study approach: Existing literature by the experts often suggests that the evaluation of BPR in organisations can be benefited most by an in depth investigation based on the real life experiences of the implemented BPR framework. The case study fieldwork can be done through various approaches. For example the triangulation approaches to provide an analysis both in breadth and depth of the organization (Miles and Huberman, 1994, Yin, 1994). This is more useful instead of conventional methods because the nature of BPR which changes prom firm to firm. So, every project implemented in every firm involving BPR is a different case altogether and deserves a separate study (Davenport, 1993, Altman and Iles, 1998). Moreover, it is a very practical approach that helps us se various aspects of the issue that can be missed by conventional studies.
Open ended interviews: Open ended interviews are one of the better ways of evaluating the performance of reengineering processes. The problem with closed questions with limited alternatives is that they limit the responses to what the researcher can imagine. If some important aspect is missed out by the researcher than the responses can never capture it in the study. In case of open ended interviews, the respondents find it easier to put forward their own views and in the process make it easier for the researcher to make the outcomes more comprehensive. Specifically, for this study, a set of interview questions on the critical success factors have been used to collect the responses of the management involved in the process. The questions enquire about the factors that lead to the success or failure of the BPR processes. The instruments for open-ended interviews are developed based on the existing literature, (Al-Mashari and Zairi, 1999, Guimaraes, 1999) regarding BPR as well as scientific research methods.
This study basically starts with the open interview as explained earlier. The rest is based on various observations on the system and the data obtained through the people involved in the operations. So, we can say that this study is a combination of both.
Phase wise distribution of the project:
The concepts of project management have been adopted during this work. It should be noted that this research would is a short time, one off assignment with the company and as such, applying the project management principles seemed to be most appropriate.
As outlined above, a five phased traditional project management approach was adopted for this particular research.
The initiation stage starts with the company allocating a specific business process that has to be worked upon. This involved the following:
- Study the present functioning
- Identify loopholes in the current functioning
- Secure the management's approval
- Identify the reengineering opportunities
- Outline the performance goals
The major challenge in this stage was to quantify the performance goals. The basic intention was to save costs as well as to improve customer satisfaction. The previous quarter's figures were analyzed to quantify the targets.
Plan and Design:
It involves designing the new process flow which must be better than the present one. It mostly depends on the resource constraints and even more so, on the process itself that is being worked upon. Further details regarding this particular project has been described at the appropriate section.
Monitor and Control:
Once the new procedure is approved and formally signed off by the management, its performance is studied over a period of time. Using inferential statistics the deviations from the performance objectives are studied in this process. Mostly, it's the volatility, which is analysed using the t- statistic is the major dependant. After identifying the deviations, the causes of such deviations are studied and the processes are amended to smooth the deviations. The performances are generally studied for a period of time and any changes are incorporated to the existing framework.
After the monitor and control phase, the whole process is summarized. Performances of each model's performance is analyzed and evaluated and submitted to the senior management for their review. It is now up to the management, if they would want to adopt my process design in actual process.
In conducting this study, I would be guided by the Guidelines set out in the British Educational Research Association (BERA) 2004 ethical issues for Educational research. The guidelines state that the researches are wholly responsible to their sponsors, the research community and participants of the research. The guidelines set out that all educational research activities and papers should be conducted with ethics of respect for:
- The person.
- Democratic values.
- The quality of educational research.
- Academic freedom.
I'm fully versant with these guidelines and would be abiding to them at the strictest degree. My work would be done without compromising on integrity, ethics and originality.
The major limiting factor for my study is the time constraint of the semester which does not allow for a more comprehensive research of my liking. BPR is a vast concept. Understanding the current process, identifying the loopholes, envisioning the new process, test running it, having it reviewed and approved by the management is a time consuming process and surely I would have done much better if more than three months were allocated. Additionally, inherent are the following limitation to my study:
- Technical Constraints. Due to security issues, the company will not be giving me access to their ERP architecture and the related documentation. My work would be confined to non technical areas and as such, I anticipate the improvements that I can show as not to be to my true potential.
- I'm adopting a research topic, which by nature is very subjective. There are very few areas that I could quantify in numeric terms. Therefore, my progress would, to a major extent, depend on the understanding of the departmental manger. It is also subject to my personal bias.
- Resistance to change. The success of my work depends mainly on the amount of information that the actual job floor shares with me. Traditionally, BPR has been viewed as one which results in layoffs. Hence, the work staff might not fully cooperate with me.
Findings and Results
Considering the complexity of the issue, this process involved various steps for data collection. First thing that was done was an open ended questionnaire that provided to a few employees including the store manager for preliminary assessment. It is an "Extra Stocked In" Argos store that was assigned to me for this purpose. These stores are also known as "Argos Superstore". They hold complete range of items (except "Home Delivery" items) from what is mentioned in the catalogue. These stores are larger than traditional stores and hence are situated in the retail parks out of town where space rents are lower. So, in total, six interviews were taken. Let us have a look at them one by one.
This interview was done right at the beginning of the project to see what is the general condition prevailing in the store. In general, it was seen that the store manager is more or less defensive of the system that is prevailing and would like to persist with the system. But some of the employees below him are not happy with certain things. But at the same time they are a bit wary of potential changes and hence are not wiling to freely talk about the whole issue. So, based on this pilot study, we can say that the two main areas of improvement in this regard will be in supply chain and inventory management and also in the field of customer relationship management. Before getting into details, let us have a look at the basic process flow within the sales counter Argos store through a Role Activity Diagram (RAD).
As we can see, it a very basic setup and there is practically no scope for much change in this. People first go through the catalogue and select the items and they reserve the items. Once that is done, they come to the store and go through the routine process as mentioned above. Only possibility is computerizing and automatizing the whole process to make it faster. But there are several implications to it. Firstly, it would mean elimination of the existing staff which will mean stiff resistance from their side. Moreover, availability and cost of existing technology is another issue in this regard. So, as of now, we avoid moving into that direction and discuss the issue from a supply chain perspective which offers a scope for improvement and which has also been mentioned by some of the respondents in the interviews. So let us first have a look at the existing Argos supply chain. The details have been gained from the interaction with some of the Argos executives at the beginning of the project and further analysis of the situation.
The Argos Supply Chain
Argos generally runs a very lean operating model. Its keeps the stores relatively small as opposed to other retailers and they average about 14,000 square feet. But within this limited space, Argos typically offers more around 11,000-12,000 different stocked items. But in a lot of cases, they would have a limited number of items in one category and once they were sold, the next consumer would have to wait for at least a week or so to get the same item as this is what takes them to replenish it in the inventory of the respective store. Another difficulty in this regard is that Argos uses more than forty different software systems in order to manage different parts of the supply chain. What is making the matters worse is that some of these systems are more than a decade older and are really outdated in true sense. Recently, Argos itself has conducted a strategic review of the entire supply chain and its capabilities. This study came up with some startling revelations. It basically noticed that the present supply chain would probably obstruct the ambitious growth path it has envisioned for the near future. Especially as it is rapidly moving towards a more hectic multi channel sales framework that would use online and mobile shopping systems, the pressure on the present system would increase manifolds within the next years and hence it requires a massive overhaul, both conceptually and technologically.
In an effort to achieve a higher level of performance, Argos planned to develop a special end to end solution in order to deliver a service that is more responsive towards the smaller stores. The intention was to enable the retailer to optimize the lean business model as much as possible although it has been practicing the same for a long time. After considering an array of options, it formed a co-development relationship with two of the biggest software service providers Accenture and Oracle Corp. in order to build a solution that is based on Oracle's flagship Retail Inventory Planning module and outsourced the whole application management process to Accenture. It should be noted that Oracle and Accenture have a long alliance that makes it possible for them to deliver coherent solutions in conjunction and without overlapping or contradicting each others work. So, as of now, the understanding between them is that Oracle would supply the necessary software packages to Argos and also help it with their expertise in order to maximize the value proposition of their software package. Accenture is supposed to help Argos by providing with system integration solutions along with change management, supply chain management, outsourcing as well as quality assurance capacities which are core competencies for Accenture based on its track record and experience. Argos is convinced that it needs this combination of one of the biggest players in the software field to help it in the biggest system overhaul of its history. It is willing to invest enough funds into this process because it understands the need for change to sustain its rapid growth in the future and fulfil its long term missions and visions.
The Road Ahead:
Now, based on the past initiatives and the existing tie ups, we can build up a framework for the future. We can see that Argos, and its partners have a common vision to help develop a sophisticated, state of the art replenishment facility that must ensure a better product availability but reduce inventory i
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