BPR - Business Process Re-Engineering !

What is BPR?

The analysis & design of workflows and processes within an organization is called Business process re-engineering (BPR). BPR is also known as business process redesign, business transformation, or business process change management.

BPR

The BPR aim is to integrate separate business functional task like ERP (Enterprise Resource Planning), SCM (Supply Chain Management), KM (Knowledge Management), GCS Groupware & Collaboration Systems),  HRMS (Human Resource Management Systems ) & CRM (Customer Relationship Management).   

                                                                                        

   

Definition: "... the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical modern measures of performance, such as cost, quality, service, and speed."

The Role of Information Technology for BPR

IT can perform following tasks for BPR.

• Shared databases, making information available at many places
• Expert systems, allowing generalists to perform specialist tasks
• Telecommunication networks, allowing organizations to be centralized and decentralized at the same time
• Decision-support tools, allowing decision-making to be a part of everybody's job
• Wireless data communication and portable computers, allowing field personnel to work office independent
• Interactive videodisk, to get in immediate contact with potential buyers
• Automatic identification and tracking, allowing things to tell where they are, instead of requiring to be found
• High performance computing, allowing on-the-fly planning and revisioning

BPR Success & Failoure Factors

BPR means dramatic change to renovate of organizational structures, management systems, employee responsibilities and performance measurements, incentive systems, skills development, and the use of IT. BPR can potentially impact every aspect of how business is conducted today. Change on this scale can cause results ranging from desirable success to complete failure.

BPR Success & Failure Factors

Successful BPR can result in huge reductions in cost or cycle time. It can also potentially create substantial improvements in quality, customer service, or other business objectives. Reengineering can help an aggressive company to stay on top, or transform an organization on the border of insolvency into an effective competitor.   

Many unsuccessful BPR attempts may have been due to the confusion surrounding BPR, and how it should be performed. Organizations were well aware that changes needed to be made, but did not know which areas to change or how to change them. As a result, process reengineering is a management concept that has been formed by trial and error or, in other words, practical experience. As more and more businesses reengineer their processes, knowledge of what caused the successes or failures is becoming apparent (Covert, 1997).

To reap lasting benefits, companies must be willing to examine how strategy and reengineering complement each other by learning to quantify strategy in terms of cost, milestones, and timetables, by accepting ownership of the strategy throughout the organization, by assessing the organization’s current capabilities and process realistically, and by linking strategy to the budgeting process. Otherwise, BPR is only a short-term efficiency exercise (Berman, 1994).

Some important BPR Success factors (but not limited to these) are as follows.

1. Organization wide commitment

2. BPR team composition

3. Business needs analysis

4. Adequate IT infrastructure

5. Effective change management

6. Ongoing continuous improvement

1. Organization wide commitment

Getting enterprise wide commitment involves the following: top management sponsorship, bottom-up buy-in from process users, dedicated BPR team, and budget allocation for the total solution with measures to demonstrate value. Before any BPR project can be implemented successfully, there must be a commitment to the project by the management of the organization, and strong leadership must be provided (Campbell & Kleiner, 1997).

Commitment and leadership in the upper echelons of management are often cited as the most important factors of a successful BPR project (Jackson, 1997).

Top management must recognize the need for change, develop a complete understanding of what is BPR, and plan how to achieve it (Motwani, et al., 1998).

…The ultimate success of BPR depends on the strong, consistent, and continuous involvement of all departmental levels within the organization. It also depends on the people who do it and how well they can be motivated to be creative and to apply their detailed knowledge to the redesign of business processes (King, 1994).

2. BPR team composition

Once organization wide commitment has been secured from all departments then the critical step is selecting a BPR team. This team will form the nucleus of the BPR effort, make key decisions and recommendations, and help communicate the details and benefits of the BPR program to the entire organization.

The determinants of an effective BPR team may be summarized as follows: competency of the members of the team, their motivation (Rastogi, 1994), their credibility within the organization and their creativity (Barrett, 1994), team empowerment, training of members in process mapping and brainstorming techniques (Carr, 1993), effective team leadership (Berrington & Oblich, 1995), proper organization of the team (Guha, et al., 1993), complementary skills among team members, adequate size, interchangeable accountability, clarity of work approach, and specificity of goals (Katzenbach & Smith, 1993).

The most effective BPR teams include active representatives from the following work groups: top management, business area responsible for the process being addressed, technology groups, finance, and members of all ultimate process users’ groups.

For example, it may include members with the following characteristics:

• Members who do not know the process at all.
• Members who know the process inside-out.
• Customers, if possible.
• Members representing impacted departments.
• One or two members of the best, brightest, passionate, and committed technology experts.
• Members from outside of the organization (Dooley & Johnson, 2001).

3. Business needs analysis

Too often, BPR teams jump directly into the technology without first assessing the current processes of the organization and determining what exactly needs reengineering. In this analysis phase, a series of sessions should be held with process owners and stakeholders, regarding the need and strategy for BPR. The idea of these sessions is to conceptualize the ideal business process for the organization and build a business process model. Those items that seem unnecessary or unrealistic may be eliminated or modified later on in the diagnosing stage of the BPR project. It is important to acknowledge and evaluate all ideas in order to make all participants feel that they are a part of this important and crucial process. Results of these meetings will help formulate the basic plan for the project. This plan includes the following: identifying specific problem areas, solidifying particular goals, and defining business objectives. The business needs analysis contributes tremendously to the reengineering effort by helping the BPR team to prioritize and determine where it should focus its improvements efforts (Dooley & Johnson, 2001).

 4. Adequate IT infrastructure

Factors related to IT infrastructure have been increasingly considered by many researchers and practitioners as a vital component of successful BPR efforts (Ross, 1998).

            Effective alignment of IT infrastructure and BPR strategy, building an effective IT infrastructure, adequate IT infrastructure investment decision, adequate measurement of IT infrastructure effectiveness, proper information systems (IS) integration, effective reengineering of legacy IS, increasing IT function competency, and effective use of software tools are the most important factors that contribute to the success of BPR projects. These are vital factors that contribute to building an effective IT infrastructure for business processes (Al-Mashari & Zairi, 1999)

            Building a responsive IT infrastructure is highly dependent on an appropriate determination of business process information needs. This, in turn, is determined by the types of activities embedded in a business process, and their sequencing and reliance on other organizational processes (Sabherwal & King, 1991).

5. Effective change management

It is a well-known fact that organizations do not change unless people change; the better change is managed, the less painful the transition is.

Al-Mashari and Zairi (2000) suggest that BPR involves changes in people behavior and culture, processes, and technology. As a result, there are many factors that prevent the effective implementation of BPR and hence restrict innovation and continuous improvement. Change management, which involves all human and social related changes and cultural adjustment techniques needed by management to facilitate the insertion of newly-designed processes and structures into working practice and to deal effectively with resistance (Carr, 1993), is considered by many researchers to be a crucial component of any BPR effort (Towers, 1996).

Management rewards system, stories of company origin and early successes of founders, physical symbols, and company icons constantly enforce the message of the current culture. Implementing BPR successfully is dependent on how thoroughly management conveys the new cultural messages to the organization (Campbell & Kleiner, 1997).

…People should be the focus for any successful business change. BPR is not a recipe for successful business transformation if it focuses on only computer technology and process redesign. In fact, many BPR projects have failed because they did not recognize the importance of the human element in implementing BPR. Understanding the people in organizations, the current company culture, motivation, leadership, and past performance is essential to recognize, understand, and integrate into the vision and implementation of BPR. If the human element is given equal or greater emphasis in BPR, the chances of successful business transformation increase substantially (Campbell & Kleiner, 1997).

           

6. Ongoing continuous improvement

The incremental change is governed by the knowledge gained from each previous change cycle. It is essential that the automation infrastructure of the BPR activity provides for performance measurements in order to support continuous improvements. It will need to efficiently capture appropriate data and allow access to appropriate individuals. To ensure that the process generates the desired benefits, it must be tested before it is deployed to the end users. If it does not perform satisfactorily, more time should be taken to modify the process until it does.

            BPR is a successive and ongoing process and should be regarded as an improvement strategy that enables an organization to make the move from traditional functional orientation to one that aligns with strategic business processes (Vakola & Rezgui, 2000).

In conclusion, successful BPR can actually produce fundamental improvements for business operations. However, in order to achieve that, there are some key success factors that must be taken into consideration when performing BPR. The ultimate success of BPR depends on the people who do it and on how well they can be committed and motivated to be creative and to apply their detailed knowledge to the reengineering initiative. Organizations planning to undertake BPR must take into consideration the success factors of BPR in order to ensure that their reengineering related change efforts are comprehensive, well-implemented, and have minimum chance of failure.

Reference:

http://en.wikipedia.org/wiki/Business_process_reengineering