Week 5 (Lecture 5) - Basic of BPR (1)

Week 5 (Lecture 5) - Basic of BPR (1)

Source / Reference:

1)      Davenport, Thomas H;Prusak, Laurence;Wilson, H James, “Reengineering revisited”

2)      V. Grover, K. Malhotra ,“GroverMalhotra-BPRTutorial-JOM-1997”

3)      Omar A.EI Sawy, Redesigning Enterprise Processes for e-Business

Response:

In lecture 5, Dr. Helen DU has introduced the other IT related strategy for business and the basic principle of Business Process Reengineering (BPR). I had the fundamental understanding of the theory of Business Process Reengineering (BPR)  in terms of the separate definition of business, process and reengineering. Also, I had the concept of the definition, rationale and the properties of business process and the process-oriented view of an organization. Let’s get start by the definition of Business Process Reengineering (BPR).

1)      Definition

1.1  What is Business Process Reengineering?

According to Teng et al. (1994), Business Process Reengineering (BPR) defines as “the critical analysis and radical redesign of existing business processes to achieve breakthrough improvements in performance measures.”

According to Davenport & Short 1990, Business Process Reengineering (BPR) defines as “The analysis and design of workflows and processes within and between organizations”

In my understanding, Business Process Reengineering (BPR) is the intensive rethinking of all business processes, work flow, management systems, organizational structure, job definitions , underlying assumptions and beliefs. Business Process Reengineering’ s major aim is to break away from old ways of working, and effect radical (not incremental) redesign of processes to achieve dramatic improvements in critical areas. For instance, the cost, quality, service, and response time through the in-depth using of information technology. 

1.2  What is a Business?

In my understanding, business focuses on end-to-end business. It is broadening the scope to the customers. The organization and the customers can also add the value via the process. The objective of business is to coordinate the activity through the use of outside-in perspective instead of top-down perspective. Therefore, the organization should define the business process through the eyes of the customers.

1.3  What is a Process?

In my understanding, process refers to a particular process to form a structured business system. It is taken by the specific input and output in order to finally achieve value added outcomes. It is not focus on a static organizational structure. It is cross-functional in scope. Therefore, the flow is flexible.

1.4  What is a Business Process?

In my understanding, business process can be focus in three sections: input, processing and outcome. Firstly, the input is the data which collected by the customers or other channel. Secondly, the processing is the deal with the data. Thirdly, the outcomes are the delivery of the expected outcome.

1.5  What is a Reengineering?

In my understanding, reengineering refers to the diversified implicit supposition with regard to the degree of performance improvements owing to reengineering and how the reengineering is accomplished.

2)      A case study of an organization transformation

 According to the lecture notes, it had described an example of how the organization transforms the current process (AS-IS) to an improved process (TO-BE).

In the above graph, it is the current process (AS-IS). It is the vertical organization. In order to solve a problem, the customer must visit various different department and staffs according to the organization structure. Therefore, the customers involve many processes for dealing a problem and inquire.

In the above graph, it is the improved process (TO-BE). It is cross functional organization. The organization organizes an order processing team which serves the customer’s request directly and individually. They have the power of owing and exchanging the information as well as assigning the case to the certain person in charge through the use of information technology and network. Finally, the team gives back the result to the customers.

From the above case study, the vertical organization is organized base on functional units. The cross-functional organization bases on the process unit. Therefore, BPR is focus on team which has the power of internal control. Also, the team can break the departmental barriers as well as reduce the confusion and sub-optimization across functions. Finally, it can help to build a customer-oriented effective organization.

3)      How can Business Process Reengineering (BPR) be applied to an organization?

      The Business Process Reengineering (BPR) emphasizes on Horizontal Organization, not the Traditional Organization. The customers are the CEO of the organization. Therefore, the organization’s strategic goal is to provide customers oriented services, not formulate the strategy by the top management of the organization. Also, the organization enables the role of Information Technology. It is used for cross-functional teams which enable effective and efficient communication and transformation of information no matter the location.

4)      What is the potential impact of Business Process Reengineering (BPR)?

Some of the factors may affect the implementation of Business Process Reengineering (BPR). They are top management supports, formalization of procedure, customer involvement, change management, organization culture and centralization of decision making.

5)      What are the success factors to achieve the successful Business Process Reengineering        (BPR) of the organization?

The organization should have the customer involvement, top management commitment and support, effective communication, change the management culture, integrate of IT with BPR, technical and business knowledge, integration of the system, user training and education, software development and good award.

6)      Why BPR still fail in the organization nowadays?

According to the statistic, 50% to 70% organization failed to achieve the benefit from the Business Process Reengineering (BPR). The reasons are as follow.

1. Misunderstanding of the concept

          Many people have an illusion that when a company undergoes some changes or breaks goals into sub goals, it is called reengineering. To make matters worse, many companies use reengineering as a way to lay off staff. Misunderstanding of the concept and inappropriate application leads to the organization failure.

2. Lack of proper strategies

         Strategies are crucial to the success of the reengineering as they allow the companies to gain the comparative advantages over other companies. Companies need careful observation of the nature of the exiting process. Strategies can be a guideline in redesigning process to enhance the specific output goal and help to determine the number of people to run a specific process effectively and efficiently. We need to state the output goal clearly with quantitative measurable terms.