business process re-engineering by aditi walia
Post on 23-Jan-2018
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Presented By :ADITI WALIA
Business Process Reengineering ( BPR ) refers to the analysis & redesign of workflows & processes both within and between the organizations. The orientationof BPR is radical. Itis a total deconstruction & a total rethinking of the business process in its entirety, unconstrained by its present business structure & pattern. Its objective is to gain quantum gains in the performance of the processes in terms of time, cost , output , quality and responsiveness to the customer.
A business process comprise of a combination of number of much independent & interrelated processes such as :
Developing new product. Customer order processing. Bill payment system.
The structural elements that constitute a process provide a basis for its analysis, appraisal & redesign for achieving higher levels of efficiency & effectiveness, economy, speed, quality & output.
THE 3 R OF REENGINEERING
TOWARDS NEED FOR BPR
It is very much possible to achieve a higher level of process performance byredesigning the process. A company resorting to reengineering of businessprocesses is able to doublethe speed of normal production, utilise productsseveral times more productively & respond to consumers needs and expectations more rapidly.
This could be achieved by effecting a total change in the process instead of a piecemeal change.It is, therefore, imperative thatfor many organizations on the decline, changing the process or redesigning the process may be the only viable alternative forturnaround. They must breakthemselves free from theirprimitive and archaic work processes that drag them down.
Issues that emerge from the forgoing discussions on the need for change form the underlying premises of BPR.
They may be outlined as follows :
The operational excellence of a company is a major basis for its competitiveness.
The business strategy of a company should be oriented towards leveraging its operational excellence into the marketplace.
Process needs to be managed, not functions.
A customer focused organization needs to be realigned in terms of process orientation.
Continuous improvement is a deficient approach when a company is far behind the industry standards & needs rapid quantum leaps in performance.
Dramatic improvement in performance is the prerequisite for overcoming competition.
For considering totally new ways of redesigning processes, each & every concept, assumption, purpose and principle needs to be abandoned.
A set of interconnected processes comprise a business system. The performance of the business firm, is thus, the outcome of the interrelated operation of its constituent work processes. The redesign of processes, therefore, provides apowerful basis for improving the process of a business enterprise.
Some processes turn out to be extremely critical for the
success & survival of the enterprise. BPR focuses on
such critical business processes out of the many
processes that go on in any company. These are the
core business processes of the company.
They are vital for success in the industry sector within which the company is positioned. They are crucial for generating competitive advantage for a firm in the market place.
While some core business processes are easily identifiable while others may not be immediately apparent.
The following instances serve to show that core processes need to be identified carefully in terms of their bearing on the firms competitiveness.
In a fast moving consumer good industry, marketing & brand management is a core process.
In the Electronics & semi-conductor industry, new product development is a core process.
In the Banking industry, the activities that help mobilise deposits and generate funds for advances to customer.
In the Insurance industry, the actual work that leads to a balance of competitive premium for customers & profit after claims for the company is a core process.
Development & Delivery Processes
of product or service
Include research, design, engineering, manufacturing & logistics.
Interface with customer processes
Include marketing, advertising, order fulfillment & service.
Process involving Management
Include strategy formulation, planning & budgeting, performance measurement & reporting.
Many Public & Private sector organizations & SMEs worldwide had gone under major reengineering efforts.
The technique was first applied to multinational corporations, such as :
IBM AT&T SONY GENERAL ELECTRICWALL MART HEWLETT PACKARD DEC
KRAFT FOODSHaving as a result major downsizing in
their organizational structures.
Later, the BANKING sector began to reengineer with a great
degree of success such as CITIBANK, NORTHWESTERN BANK, BANK OF
AMERICA and others.
Major utility companies used reengineering as a
technique to improve service like OTE, ELTA.
First, the government cabinet of Egypt reengineered many of its processes along withmany municipals in Europe.The public health sector hasundergone a major re-engineering in Europeusing the CORBA methodology.
As the technique was becoming well known to the business sectors, smaller enterprises were using the technique for organizational upgrade.
BPR is also being used to change the organizational structure of the public services.
GENERAL MODEL STAGES
Most reengineering methodologies share common elements but simple differences can have a significant impact on the success or failure of a project.
After a project area has been identified, the methodologies for reengineering business processes may be used. In order of a company, aiming to apply BPR, to select the best methodology, sequence processes and implement the appropriate BPR plan, it has to create effective and actionable visions.
All methodologies could be divided in the following general stages.
STAGE 1 : ENVISION STAGE
The company reviews the existing strategy &
business processes and based on that review
business processes for improvement are
targeted & IT opportunities are
STAGE 2 : INITIATION
In this stage, project teams are assigned. The performance goals along with project planning and employee notification are set.
STAGE 3 : DIAGNOSIS
Here, the documentation and sub-
documentation takes place in terms of
physical attributes ( activities, resources,
communications, roles, IT and costs ).
STAGE 4 : REDESIGN
In this stage, new process design is developed by devising process design alternatives and through brainstorming and creativity techniques.
STAGE 5 :
Here, management technique changes
occur to ensure smooth migration to
the new process responsibilities and
human resource roles.
STAGE 6 : EVALUATION
The new process is monitored to determine if goals are met and examine total quality programs.
ROLE OF INFORMATION
TECHNOLOGY(IT) IN BPR
A re-engineered business process characterised by IT-assisted speed, accuracy, adaptability and integration of data and service points, is focused on meeting the needs & expectations of the consumer quickly and adequately thereby enhancing his/her satisfaction level.
With the help of tools of IT, organizations can modify their processes to make them automatic, simpler and time saving.
Various studies have conclusively established the role of IT in transformation of business processes.
IT initiatives, thus, provide business values in their distinct areas :-
Efficiency by way of increased productivity. Effectiveness by way of better management. Innovation- by way of improved products and services.
All these can bring about a radical change in the products and services, thereby improving competitiveness and customer satisfaction. It is a critical factor in the success of bringing this change.
When applying the BPR management technique to a business organization the implementation team effort is focused on the following objectives :
CUSTOMER FOCUS : Customerservice oriented processesaiming to eliminate
OBJECTIVES OF BPR