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SCDL- PGDBA- III Semester (Operations) Business Process Re-EngineeringCode 140
BUSINESS PROCESS RE-ENGINEERING
1.Introduction: Business Process Reengineering (BPR) is the fundamental rethinking and radical redesign of business processes to bring about some improvements in certain factors like cost reduction, improvements in quality and service, and cycle time reduction. BPR enables the designers of business processes to disassociate themselves from current process, and focus on a new process. It helps to create a vision for the future and design new business processes. It also helps to create an action plan based on the gap between your current processes, structures and technologies, and where you want to go. Companies who do not reengineer their business processes will not survive for a long period. Since the market has become global and the customers are becoming very selective, BPR is no more a choice. It is an imperative. Companies want breakthrough performance changes and not incremental changes and BPR is one approach for rapid change and dramatic improvement. Conclusion: BPR is the basic rethinking and radical redesign of business processes to achieve dramatic improvements in critical success factors like reduction in cost of production, improvements in quality and service and cycle time reduction
2) Introduction: While reengineering the business processes, it is necessary to understand and implement various BPR principles. The business gains will be received to the extent of which the BPR principles have been implemented.
The following are the various principles of BPR: Organize around outcomes and not tasks: It means assigning a person or a team to perform a particular task, rather than many people taking many different steps. It is necessary to organize around the expected result. It means clearly defining the objectives that are to be achieved through reengineering.
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Have those who use the output of the process: In most of the organizations, if the marketing manager who wants to make a purchase has to submit a purchase requisition to the purchase department. The marketing manager is like a customer, whereas in a reengineered system, department managers can make their own purchases using a shared database of approved vendors. It safeguards the role of purchasing in negotiating the best vendor terms and eliminates the costly paper work of traditional purchasing procedures. Merging information processing work into real work: There will be fewer chances of errors, if the information processing work is merged with the real work that produces the information.E.g. The person who is inspecting the goods should also prepare inspection report on the computer system. Treat geographically centralized: dispersed resources as though they were
Some of the greatest inefficiencies occur because decentralized divisions all maintain their own information system. This is costly and it prevents the companies from negotiating favorable prices.
Link parallel activities during the process: In complex manufacturing design and engineering projects, multiple activities can be accomplished by different teams working concurrently with the use of shared database that make it possible to integrate the end result. Put the decision point where the work is performed: Ability to make quick decision is very vital for the survival of any business. This is possible if there is proper delegation. Employees with proper authority can make quick decisions. But at the same time it is necessary to build control into the processes to avoid misuse of authority Capture information once at the source: One of the major problems with the traditional information systems is that the same information may be created, maintained and used in different places. When the processes are reengineered the integrated databases are designed. Integrated databases not only eliminate repetition of data entry but also ensure better data integrity. Conclusion: Thus it is very much necessary to understand the various BPR principles and implement them while reengineering as far as possible.
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3) Introduction: The following is the impact of Information Technology on process innovation. Impact Automation Informational purpose Sequential Tracking Analytical Geographical Integrative Intellectual Explanation Eliminating human labor from a process Capturing process information for understanding Changing process sequence Closely monitoring process status Improving analysis of information Coordinating processes across distances Coordination between tasks and processes Capturing and disturbing intellectual assets
IT application improve business processes: IT can support automated design processes that improve speed of design and prototyping. It helps to coordinate the activities of product development process. In terms of order fulfillment IT can improve processes that begin when customer makes a request and end when revenue is received. IT can support logistical processes in a number of ways, using locational recognition, asset management, and logistical planning system.
Conclusion: Thus, we can find that application of IT in business processes can support product development process, order fulfillment processes, and in logistical processes. Only processes can be reengineered. Before reengineering the processes it is necessary to identify them.
4.Introduction: There are various methodologies and techniques that can be used for carrying out the purposes of BPR in the organization. The following are the different methodologies used in BPR: The Hammer / Champy Methodology:
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Hammer/Champy methodology assumes that business-reengineering projects are being initiated by the top management and carried out by specially formed groups. Hammer/Champy first popularized business Reengineering. They see poor management and unclear objectives as the major barriers to business reengineering success. The Hammer/Champy methodology consists of six project steps. The Davenport Methodology: Under Davenport methodology Information Technology is the heart of business reengineering. Davenport methodology lays emphasis on innovation and technology, and it states that organizational and human resources issues are more central, than technology issues to the behaviour issues, that should occur within a business process. Davenport methodology sees culture as a barrier, when there is a poor process innovation to cultural fit. Davenport methodology also includes six project steps. The Manganelli / Klein Methodology: Manganelli / Klein wants to concentrate on those business, that helps to achieve the strategic objectives of the company and the requirements of the customer. They argue that business reengineering is more effective than the incremental change initiatives, which tend to fail more often. This involves five project steps. The Kodak Methodology: This methodology is quite similar to other methodologies. The Kodak methodology was developed by the international Kodak organization, which was applied to Kodak facilities throughout the world. This methodology also involves five major project steps. Techniques of BPR: The following techniques are to be followed, while developing a new business process: Indicative thinking Flow-charting Creative Process Redesign Process Bench Marking Simulation Re-engineering Software
Conclusion:
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The BPR methodologies assume that business-reengineering projects are being initiated by the top-level management and carried out by specially formed groups. The above-mentioned methodologies and techniques can be used for conducting BPR exercises in the organization effectively.
5. Introduction: BPR is the fundamental rethinking and radical redesign of businesses to achieve dramatic improvement in critical success factors like cost reduction, quality and service improvement and cycle time reduction. The various success factors that are involved in BPR implementation are as under: a. Strong and continuous participation of the top level management for the process-reengineering project. b. Strategic alignment between business strategy and the Information Technology strategy. c. Creating a suitable business case for process reengineering with specific goals and objectives. d. Using suitable methodology for certain functions like planning, designing, directing, implementing and evaluating the process reengineering. e. Efficient and effective management of change that addresses the issues relating to cultural changes in the organization. f. Ensuring the commitment of the owners of the process, i.e. the end-users by making them accountable for the success of the project. g. A right combination of reengineering team with proper understanding of the topic as well as having an expertise in various areas. Conclusion: The involvement of the top management is very mush necessary for the success of BPR implementation. The top management should communicate with the employees of the organization about the objectives of the project and the expected results of the project and the time limit within which they must be achieved.
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6. Introduction: Barriers are severe, unexpected and not planned for problems in business reengineering projects. It increases the impact of project risk factors. The success of business reengineering projects is mainly dependent on the knowledgeable management of business reengineering project risk factors. The following are some of the barriers to business reengineering implementation success: Project Related Causes: The setup of business reengineering project may lead to barriers, which have to be dealt with. If confusion arises, doubt and fear increases, which in turn leads to project failure. People Related Causes: People who are affected by the changes in the organization may often act as a barrier for project success. The top management may want a change, which will simplify their job, but the employees may fear that they may be replaced by computer system, etc. Environmental Causes: The environment of the organization that undertakes a business-reengineering project may act as a barrier for success, by withstanding through the means of rules, regulations, and public resistance. The environment may quickly change in a way that makes the success of the reengineering project difficult. Organizational Causes: As far as possible, the organizational structure must be flexible. If, the organizational structure is inflexible, then it may act as a barrier towards the changes in operations. Conclusion:
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Barrier management is to be performed along with the project management. The barrier management checks the project environment for symptoms of barriers, identifies root causes and applies appropriate tools and techniques and methods to alleviate or eliminate the barriers for success. The framework of barrier management can be treated as a tool for successful implementation of BPR projects.
7. Introduction: The concept of Total Quality Management (TQM) relates to the achievement of all the objectives of the management. The management approach of the organization aims at quality, which is based on the involvement of all its employees, which in turn aims at long term success through customer satisfaction and benefits to the organization as well as the society in general. Relationship between TQM and BPR: (i) While TQM concentrates on incremental or step by step improvements and sustaining them, BPR concentrates on achieving radical and dramatic improvements by organizing around the outcome which is determined critical success factors like cost reduction, quality and service improvement and cycle time reduction. (ii) While TQM is an evolutionary approach towards improvement, BPR is a revolutionary approach towards improvement. (iii) It is always better to start with evolutionary approach and later on revolutionary approach can be adapted to reengineer the processes. (iv) To maintain the gains of reengineered processes it is necessary to follow again the evolutionary approach for improvement. Conclusion: The successful implementation of TQM and BPR depends on the culture in the organization. Both are complementary. They can complement each other, if they are implemented in the right perspective. Companies should concentrate on improvements by integrating TQM and BPR. The strong and continuous
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involvement of the top management and proper training of the employees of the organization are essential for the success of these concepts.
8.Introduction: Enterprise Resources Planning Systems (ERP) refers to the integrated information systems, which are established to cater the information and decision needs of all the fuctional units of an enterprise. Relationship between ERP and BPR: BPR is the fundamental rethinking of the business processes to improve the service, quality, speed and output of products or services. BPR is a formal technique to reassess the current processes, replacement of current processes with new processes, combining processes, redistribution of processes, changing the sequence of processes or completely eliminating the unwanted processes. ERP has enabled in exercising BPR in many organizations. Since ERP implements the organizational business processes, it is always necessary to reengineer the business processes before introducing ERP. Benefits of ERP: The benefits of ERP come in three different forms. i.e. short term, medium term and long term .It helps to achieve certain business objectives like cost reduction, better customer satisfaction, improved market share, better employee satisfaction, improved vendor performance, improved profitability etc. Conclusion: To enjoy the full benefits of ERP, it is necessary to reengineer the business processes in the organization. The business processes should be reengineered first and a suitable ERP package is selected or BPR should be done as per the requirements of the ERP package.
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9. Introduction: BPR may be defined as the search for and the implementation of radical change in business process to achieve breakthrough results. BPR in banks is no more a choice. It is an imperative. The following are some of the business processes in banking: Acceptance and repayment of deposits. Sanction and disbursal of loans. Transfer of funds for the customer and for functional units of banks. Acceptance of deposits and making payments on demand. Handling foreign exchange transactions.
BPR in banks in India: The Narsimhan committee report in 1998, suggested that the banks should first reengineer the processes before they take efforts for technology up gradation, so that the efforts of technology up gradation will be more effective and the bankers can derive maximum benefits through their technology projects. The bankers have been investing in IT projects for meeting new challenges, which they have been facing as a result of globalisation and competitive market conditions. BPR should be used for improvement in the existing processes and eliminating the unwanted processes and better service to the customer. Any improvement in the customer service should be coupled with reduction in the cost of customer service. Besides it should also improve the profitability of the banks. Conclusion: Before taking efforts for technology up gradation, it is necessary for the banks to reengineer the business processes, which will results in getting maximum benefits by the banks through their technology projects. BPR in banks is no more a choice. It is an imperative.
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10. Introduction: BPR, though, primarily concerned with cost reduction and radical and dramatic improvements in quality and service, it is also concerned with redesigning the supply chain processes for collaborative advantage and creating value as quickly as possible. BPR for e-business involves redesigning both enterprise and supply chain processes around the Internet. The change in business models for creating value quickly will further drive BPR for e-business. It will increase the opportunities and ways to change the flow of information and knowledge management around a business process as a method of BPR. The process of carrying out BPR is changing to get maximum benefits of the internet and intranets to support collaboration on BPR projects. For majority enterprises BPR for e-business includes redesigning both the electronic and physical aspects of business processes. Reusability of process designs will facilitate and speed up the design part for common processes such as order fulfillment. Conclusion: Evolution of BPR for e-business is inevitable. Various principle and tactics can be used to redesign the business processes. BPR principles are widely used by companies to reengineer the business processes.
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BUSINESS PROCESS RE-ENGINEERING

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