About Business Process Reengineering (BPR)

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1.     Overview of BPR……………………………………………………………………………………… 2

2.     Model analysis………………………………………………………………………………………….. 2

2.1      The BPR methodology and model analysis…………………………………………. 2

2.1.1     Identify strategic business vision………………………………………………. 3

2.1.2     Determine the processes to be redesigned………………………………….. 3

2.1.3     Check with the current processes………………………………………………. 3

2.1.4     Identify IT levers and cost performance metrics…………………………. 4

2.1.5     Design the model for the new processes…………………………………….. 4

3.     Reasons for BRP failures……………………………………………………………………………. 4

3.1      Unclear definitions…………………………………………………………………………… 5

3.2      Inadequate resource………………………………………………………………………….. 5

3.3      Taking up too long time…………………………………………………………………….. 5

3.4      Lack of support and sponsorship………………………………………………………… 6

4.     Conclusions………………………………………………………………………………………………. 6

5.     Recommendations……………………………………………………………………………………… 7

Reference……………………………………………………………………………………………………….. 9

About Business Process Reengineering (BPR)

 

1.        Overview of BPR

 

In the past when organizations encounter problems including some of the serious problems caused by the uncertainties and risks in the fast changing business environments, managers tend to adjust the some parts of the company such as promoting a new CEO. Mike Hammer (1990) started the idea of Business Process Reengineering (BPR) by publishing his famous article, Re-engineering work: don’t automate, obliterate. And the basic idea of BRP is to re-build the organizational business process from the scratches to achieve the reduction of response time and total cost. And the implementation of the BPR would require broad knowledge in the field of many modern management thinking and theories such as Total quality control, JIT (just in time), Workflow, Team management and Benchmarking (Wilson 2009, p.22).

 

2.        Model analysis

 

2.1    The BPR methodology and model analysis

 

While there are different methodologies in the guiding the BPR practices with some focusing on incremental changes, some focusing on the radical changes and the others advocate a mixture of the two types of changes, there are no one best methodology to all the business (Radhakrishnan & Balasubramanian 2008, p.40) depending on the different nature of the industry and company’s internal and external business environment. While there are a number of phases that had been identified in the BRP process by the development of various theories and models, Davenport and Short (1990) developed a simple five step model provide theoretical support and direction to the BRP practices. Below we will try to explain the five steps in the Davenport and Short (1990)’s model.

 

2.1.1            Identify strategic business vision

 

To begin any business process redesign actions, a company has to consider the question that what will be the broad strategic business vision into which the process re-engineering will fit (Kelemen 2003, p113). In an actual scenario, a company that plans to implement a BRP has to check with what the visions will be in term of the whether it is cost control, process time reduction, profit maximization and output quality improvement.

 

2.1.2            Determine the processes to be redesigned

 

The second step in the Davenport and Short (1990)’s five step model is to determine the processes to be redesigned; there are usually two ways to identify the processes to be redesigned in this step. The first approach which have been used widely is the high-impact method that will help choose the most influential business process that are contradictive to the vision of the organization to be redesigned; the second approach with less preference by the organizations is the exhaustive method which will choose all the processes in a company to be redesigned.

 

2.1.3            Check with the current processes

 

This step in the model will deal with the current business processes that have not been working well. The goals of checking the current processes include two targets. Firstly, by knowing more about the current processes a company could learn the root reasons of the dissatisfactory business process in term of some critical mistakes the company could avoid such mistakes again in the new process; secondly, when the current processes could be to some degree malfunctioning usually there would still be advantages in the current process that have addressed some important issues in the business, and these advantage could be use as reference to the building of the new business processes.

 

2.1.4            Identify IT levers and cost performance metrics

 

The next step in the model would be to identify the IT levers to see how IT can be leveraged in the Business Process Reengineering (BPR) practices, as suggested by Davenport and Short (1990) that IT should not be used only as a supporting part but it could actually create a process redesign option to the companies.

 

2.1.5            Design the model for the new processes

 

In the final step in this model, the major task involved would be to design the new business process to replace the current process; this new process could be a prototype of the process that could be improved in the implementation and application in the actual scenario. What’s more the prototype needs to extend beyond the technological application and into the business organization to act as the fundamental for iterative perfection before the prototype could be put into full implementation (Verma 2009, p.31).

 

3.        Reasons for BRP failures

 

As admitted by Hammer (1993) who advocated the BRP at the beginning that 70% of the BPR projects will fail to achieve the promised and desired results in the end. Below we will try to list the major factors that could lead to the failures of the BPR.

 

 

3.1    Unclear definitions

 

As mentioned earlier, the Business Process Reengineering (BPR) has become so popular that there are increasing number of companies that want to have a try of the BPR in their business to see whether improvements could be made in term of business efficiency and customer satisfaction and other business target. But not all the companies know exactly what they are about to do with the insufficient knowledge of what BRP would be and what the problems are currently in their core business processes. As suggested by Pellissier (2001, p193) that BRP is more than automation and total quality management and it tries to find out ways to pursuit multifaceted improvement goals such as quality, speed, responsiveness and customer satisfaction. What’s more, unclear definition also happens when the companies have unrealistic expectations over the benefits that the BPR could bring to the business.

 

3.2    Inadequate resource

 

With a fundamental changes and rearrangement of the current business process, there could be possibilities that the companies may not have enough of resources both internally and externally to cope with the needs of the BPR implementation. So it is important for the companies to prepare sufficient of the needed resources in case that the implementation would need extra resources than expected. Also the lack of the critical IT would also result in the inadequate resource that influences the effectiveness of the BPR.

 

3.3    Taking up too long time

 

Another situation that also results in inadequate resource is that the implementation of the BRP strategy takes up longer time than in the company’s anticipation and because of the implementation period extension, more inputs in term of various resources would be need to support the implementation procedure until the appearance of the desired results.

 

3.4    Lack of support and sponsorship

 

Besides the consideration of the internal and external resources needed in the implementation of the BPR, another issue that could also directly lead to the failure of the BPR effort is the lack of support and sponsorship especially when this happen in the top management level. As claimed by Khosrowpour (2006) that because of the lack of support and sponsorship from the top management, implementation efforts can be strongly resisted and ineffective. For example, when a project within which BPR is performed and it is proved to be effective but if the top management has not prepared for such success in the project then in many cases the BPR efforts could not finally become success by bringing in major changes to the organization without the sincere support and sponsorship by the top management. On the other hand, because of the fundamental changes that normally the BPR would result in the companies, another lack of support could happen in the implementation is not from the management but from the employees who are expected to accept the changes but actual cases could be much different from what companies have planned previously. For example, employees usually would not hard to accept the changed corporate culture as they are so familiar with the old one and do not want to make changes.

 

4.        Conclusions

 

Business Process Reengineering (BPR) or Business Process Redesign, though begun in the 1990s its speedy and wide scale application has made it one of the most successful and popular management thinking that change most people’s traditional way of thinking. It redesigned the work as processes, not the tasks that we had always consider our work as (Swamidass 2000, p.71). There are three major contributions that the development of the BRP theory has brought to our business world. Firstly, the development of the BRP theory helps understand some business phenomenon that had not been well explained. For example, as pointed by Davenport (1993) the ability of the Japanese firms to build up efficient business process contributed greatly to the success of the Japanese business. Secondly, it provides new management thinking to the management of change in the business practices that in some case, organizations need to check with their current business processes and perform radical changes to the core business process. Thirdly, the BRP thinking through the reduction of the responsive time and process circle helps better react to the changes in the market and improves the responsiveness to the customer demands. But on the other hand there are a number of reasons that could lead to the ineffectiveness or even failure of the Business Process Reengineering (BPR). So a company needs to examine their position well before they decide to implement a Business Process Reengineering (BPR).

 

5.        Recommendations

Though there are a number of possible advantages and benefits that a successful Business Process Reengineering (BPR) could bring to the business which have been mentioned in the conclusion, the in regard with the many possibilities that a Business Process Reengineering (BPR) may fail and as suggested by Hammer (1993) who advocated the BRP in the 1990s that 70% of the BPR projects will fail to achieve the promised and desired results in the end, a company also need to take into consideration of the possibility and cost of the potential failure. So here two recommendations are given. Firstly, in a large organization, it could perform the Process Reengineering (BPR) in a smaller scale such as a particular department or a wholly owned subsidiary which posses the similar business process to the company’s core business process as a test to the new process. If it would be effective and successful, then it could be implanted in an organizational level. Secondly, a follower strategy could be used to reduce the risks and uncertainty. In many cases, industrial leaders would perform the Process Reengineering (BPR) with the hope to increase their competitiveness then other companies in the same industry could follow the leaders to perform a Process Reengineering (BPR) if the cases of the leaders turn out to be successful.

 

6.

Reference

 

Davenport, T. H. 1993. Process innovation: re-engineering work through information technology, Harvard Business School Press, Boston: Massachusetts, 5-9

 

Davenport, T. H. & Short, J. E. 1990. The new industrial engineering and business process redesign, Sloan Management Review, 31(4), 11-27

 

Hammer, M. 1990. Re-engineering work: don’t automate, obliterate. Harvard Business Review, July/August

 

Hammer, M. & Champy, J.1993. Re-engineering the corporation: Manifesto for Business Revolution. Harper Collins

 

Kelemen, M. 2003, Managing quality: managerial and critical perspectives, New Delhi: Sage Publication India Pvt. Ltd, p113

 

Khosrowpour, M. 2006, Cases on information technology and business process reengineering. Hershey: Idea Group Publishing

 

Pellissier, R. 2001, Searching for the Quantum Organisation, Lansdowne: Juta & Co. p193

 

Radhakrishnan, R. & Balasubramanian, S. 2008, Business Process Reengineering: Text And Cases, New Delhi: Prentice- Hall of India Private Limited, p.40

 

Swamidass, P. M. 2000, Encyclopedia of production and manufacturing management. Norwell: Kluwer Academic Publishers, p.71

 

Verma, N. 2009, Business Process Management: Profiting from Process, New Delhi: Global India Publications Pvt Ltd. p.31

 

Wilson, D. A. 2009, Managing information: IT for business processes. 3rd edition, Oxford: Butterworth Heinemann, p.22