Business process re-engineering
BPR aims to help organizations fundamentally rethink how they do their work in order to improve customer service, cut operational costs, and become world-class competitors.
[1] Within the framework of this basic assessment of mission and goals, re-engineering focuses on the organization's business processes—the steps and procedures that govern how resources are used to create products and services that meet the needs of particular customers or markets.
As a structured ordering of work steps across time and place, a business process can be decomposed into specific activities, measured, modeled, and improved.
Re-engineering identifies, analyzes, and re-designs an organization's core business processes with the aim of achieving improvements in critical performance measures, such as cost, quality, service, and speed.
Re-engineering maintains that optimizing the performance of sub-processes can result in some benefits but cannot yield improvements if the process itself is fundamentally inefficient and outmoded.
[1] BPR began as a private sector technique to help organizations rethink how they do their work in order to improve customer service, cut operational costs, and become world-class competitors.
[1] In 1990, Michael Hammer, a former professor of computer science at the Massachusetts Institute of Technology (MIT), published the article "Reengineering Work: Don't Automate, Obliterate" in the Harvard Business Review, in which he claimed that the major challenge for managers is to obliterate forms of work that do not add value, rather than using technology for automating it.
of the early BPR proponents[citation needed], coupled with abuses and misuses of the concept by others, the re-engineering fervor in the U.S. began to wane.
Equivalently to the critique brought forward against BPR, BPM is now accused[citation needed] of focusing on technology and disregarding the people aspects of change.
[10] In order to achieve the major improvements BPR is seeking for, the change of structural organizational variables, and other ways of managing and performing work is often considered insufficient.
The organization dimension reflects the structural elements of the company, such as hierarchical levels, the composition of organizational units, and the distribution of work between them[citation needed].
In BPR, information technology is generally considered to act as enabler of new forms of organizing and collaborating, rather than supporting existing business functions.
The concept of business processes – interrelated activities aiming at creating a value added output to a customer – is the basic underlying idea of BPR.
Also, ERP (enterprise resource planning) vendors, such as SAP, JD Edwards, Oracle, and PeopleSoft, positioned their solutions as vehicles for business process redesign and improvement.
Although the labels and steps differ slightly, the early methodologies that were rooted in IT-centric BPR solutions share many of the same basic principles and elements.
[13] Simplified schematic outline of using a business process approach, exemplified for pharmaceutical R&D Benefiting from lessons learned from the early adopters, some BPR practitioners advocated a change in emphasis to a customer-centric, as opposed to an IT-centric, methodology.
If successful, a BPM initiative can result in improved quality, customer service, and competitiveness, as well as reductions in cost or cycle time.
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.
By informing all affected groups at every stage, and emphasizing the positive end results of the re engineering process, it is possible to minimize resistance to change and increase the odds for success.
[25] Once an organization-wide commitment has been secured from all departments involved in the re engineering effort and at different levels, the critical step of selecting a BPR team must be taken.
For example, it may include members with the following characteristics: Moreover, Covert (1997) recommends that in order to have an effective BPR team, it must be kept under ten players.
The efforts of the team must be focused on identifying breakthrough opportunities and designing new work steps or processes that will create quantum gains and competitive advantage.
This linkage should show the thread from the top to the bottom of the organization, so each person can easily connect the overall business direction with the re-engineering effort.
[18] Developing a business vision and process objectives rely, on the one hand, on a clear understanding of organizational strengths, weaknesses, and market structure, and on the other, on awareness and knowledge about innovative activities undertaken by competitors and other organizations.
[24] Hammer (1990) prescribes the use of IT to challenge the assumptions inherent in the work process that have existed since long before the advent of modern computer and communications technology.
[20] Many organizational change theorists hold a common view of organizations adjusting gradually and incrementally and responding locally to individual crises as they arise[21] Common elements are: In conclusion, successful BPR can potentially create substantial improvements in the way organizations do business and can actually produce fundamental improvements for business operations.
In addition, 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.
The most frequent critique against BPR concerns the strict focus on efficiency and technology and the disregard of people in the organization that is subjected to a reengineering initiative.
Thomas Davenport, an early BPR proponent, stated that: "When I wrote about "business process redesign" in 1990, I explicitly said that using it for cost reduction alone was not a sensible goal.
And consultants Michael Hammer and James Champy, the two names most closely associated with reengineering, have insisted all along that layoffs shouldn't be the point.
