Business Process Re Engineering

Table of Contents:-

  • Business Process Re Engineering
  • What is Business Process re engineering?

Business Process Re Engineering

Business processes are simply a set of activities that transform a set of inputs into a set of outputs (goods or Services) for another person or process using people and tools. Re-engineering is a process which is confusing and frustrating to some managers. They can identify a process but perceive it as one among “islands of processes” which, when combined, make up the organisation. The connection between and integration among processes is elusive. More importantly, they focus on tasks, on jobs, on people, and on structure rather than on outcomes.

Order processing is considered as a series of individual tasks:

  • Processing an order form.
  • Picking up goods from the warehouse, and so on.
  • Losing sight of the larger objective is to get the goods into the hands of the customer who has ordered them.

The process’s tasks are essential, but the customers couldn’t care less about them. The customer only wants to know if the process works.

Thus, reengineering implies changes of various types and depths to a system, from a slight renovation to a total overhaul. To reinvent their companies, managers need to abandon the organisational and operational principles and procedures they are now using and create entirely new ones. These new ones can be combined into an emerging idea called business re-engineering.

BPR is the analysis and re-design of workflow and processes within and between organisations. Business Process Re-engineering (BPR) is, in computer science and management, an approach aiming at improvements using elevating the efficiency and effectiveness of the business process that exists within and across organisations. The key to Business process re-engineering is for organizations to look at their business processes from a “clean slate” perspective and determine how they can best reconstruct them to improve how they conduct business.

Business process re-engineering is also known as BPR, Business Process Re-design, Business Transformation, or Business Process Change Management. BPR combines promoting business innovation with a strategy of significantly improving business processes so that a company can become a much stronger and more successful competitor in the marketplace.

What is Business Process re engineering?

According to Hammer and Champy, “Re-engineering is the fundamental rethinking and radical re-design of business processes to achieve dramatic improvements in critical, contemporary measures of performance”.

In this definition, four important keywords:

1) Fundamental: Many questions such as:

  • “Why do we do”,
  • “What do we do?” and
  • “Why do we do it the way we do?

Re-engineering ignores what is and focuses on what should be.

2) Radical: Disregarding all existing procedures and structures and inventing completely new ways of accomplishing work.

3) Dramatic: Used for quantum leaps in performance, not used for small jumps.

4) Process: The most important keyword, collection of activities taking multiple inputs to create an output that is of value to the customer

The approach is based on the view that continuous improvement is not sufficient to meet the organisational expectations for business development and change. Business process re-engineering seeks to make major radical, fundamental and dramatic breakthroughs in performance and is holistic. The main focus is to ensure a ‘clean slate’ or ‘green-field’ approach to processes, pinpointing that part of the organisation on which to put the emphasis and highlighting the processes which add value. It is, however, not without the risks and demands on resources, time and costs which are associated with the efforts involved in a re-engineering project.

Need for Business Process Re Engineering – BPR

BPR is needed for improvement in the following areas:

1) Improved Techniques

During the regular production course, new improvements may be discovered for existing techniques. An updated technique may eliminate previous steps that become unnecessary due to higher consistency. Efficiency may be gained by removing these unnecessary steps. If quality is diminished, increasing the number of steps in the business process may be necessary.

2) Eliminates Hierarchy

Internally re-engineering functional hierarchies into teams to facilitate work processes will eliminate most management layers and require managers to accomplish much more with fewer resources. Re-engineering implies a radical shift away from the tradition in which performance is primarily rewarded by promotion into managerial ranks; therefore, the future holds very few control positions. Hierarchies disappear from the re-engineered company and are replaced by the idea of purposeful value-added interaction.

3) Facilitates Match

Reengineering in this environment aims to facilitate the match between market opportunities and corporate capabilities, thereby ensuring corporate growth. To achieve these goals, downsizing and outsourcing will be by-products of re-engineering.

4) Business Efficiency

Efficiency will increase as employees become more proficient in their tasks. Initially, work progresses slowly, with multiple test inspections required. After several iterations, inspections may be reduced if quality becomes consistent. The rapid changes in everything warrant product development in less time, faster product life cycles, and hands-on environmental scanning.

5) New Requirements

The existing business process may need to be reworked to comply with new requirements. These requirements may arise in response to regulations, business needs, or customer demands.

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