Enterprise Process Management - Literature review Example

?Enterprise Process Management Table of Contents Introduction 3 The Concept of EPR 4 EPR in Automobile Segment 4 Success of EPR 5 CSFs for Effective EPR 6 Recommended Management Approaches 10 Conclusion 12 References 13 Introduction In present days, the business environment is dramatically changing due to increased globalisation and enhancement in Information Technology (IT). Organisations today confront the challenges of increasing competition, expanding market and growing customer expectations. These challenges enhance the pressure on the organisations to improve the effectiveness of supply chain, reduce the output times, minimise the level of inventories, enlarge the product selection, provide consistent delivery time, deliver better customer service, augment product/service quality and efficiently organise international demand, supply and production. As the corporate world shifts to a complete cooperative model and competitors elevate their abilities to stay competitive, organisations must enhance their individual business practices and processes. Organisations also must share critical information to the major dealers, providers and customers. Furthermore, organisations must advance their abilities to create and communicate suitable and precise information. To accomplish these objectives, organisations are progressively revolving to enterprise process reengineering methodology (Umble & et. al., 2003). Based on this aspect, the report provides information about Critical Success Factors (CSFs) for effective enterprise process reengineering (EPR) particularly in automobile segment. Furthermore, the report also provides recommendations to the Chief Executive and Board of Directors of Ford Motor Company regarding accomplishment of those CSFs. The Concept of EPR EPR is defined as a necessary reconsideration and thorough reformation of business processes with a view to attain remarkable improvement such as minimisation of costs, enhancement of quality and service and increased speed, which are currently considered to be essential constituents to enhance the organisational performance. EPR is regarded as modality of accomplishing new radical procedure or organisational transformation in order to better satisfy the clients’ requirements. EPR helps to redesign the business and production procedure with a view to eradicate such functions that do not add value. The key features of EPR include the aspects that: It focuses on fundamental issues of organisation, rather than organisational departments It focuses more on process and less on people and organisational structures It attempts to go to the core of organisational process in order to make apparent changes by removing outdated activities and discovering new means of carrying out different activities It creates strong connection with IT (Sabau, 2005) EPR in Automobile Segment Presently, automobile manufacturing organisations are confronting essential changes to their businesses with the appearance of new technologies and relocation of international supply chains. Besides, rapid improvement of IT and transportation system also have allowed the synthesis of local and national markets into an international one. Unpredictability and changeability in both, internal as well as external business environment is also experienced by several automobile organisations. Hence, in order to sustain, automobile organisations necessitate receptiveness and flexibility in the accomplishment of business and operational process. For customer orientation, turning ideas into final products has increasingly become an important component for gaining competitiveness in automobile segment. Only quality, technical complexity and price attractiveness are not sufficient for gaining success in today’s market. The products must be capable to fulfil the customer demands. Due to these reasons, automobile organisations are directed to incorporate every aspect of business functions ranging from customers to suppliers in the product life cycle phase. Furthermore, information and knowledge are also becoming strategic assets for automobile organisations. These aspects are the key motivations for EPR which can help organisations to enhance the process into provision of adequate support comprising informational, methodological and organisational elements (Kalpic & Bernus, 2002). Success of EPR EPR holds the promise of enhancing the business processes and minimising expenses. However, there are always two sides of any story. In reality, EPR is quite costly and considerable level of business expenses is usually spent on overcoming difficult applications. Usually, every organisation possesses its individual competitive advantage and thus, in order to be successful, organisations are required to change the proven business process to adjust with EPR (Nah & et. al., 2001). The underlying principles of reengineering involve a concentration on business process and the change must be fundamental and provide benefits to the proposed organisation. EPR is a planned phenomenon and is usually enabled by IT. However, EPR is not without any critiques. It is criticised for growing redundancy and for disempowering employees. Likewise, a considerable number of EPR projects have also failed (Larsen & Myers, 1999). There are several factors which result in the failure of EPR in organisations. Grover & et. al. (1995) have recognised nine factors which are related with EPR namely change administration, technological capability, strategic planning, time period, management support, human resource management, process definition, project supervision and tactical planning. CSFs for Effective EPR The key CSFs for effective EPR are as follows: Organisational Culture The cultural complexity of the organisation can influence the reengineering procedure. Organisational culture is a mixture of cultural expression of different levels and types which are impacted by individual and organisational explanations. Every organisation must develop such culture which is controllable and therefore can assist in redesigning the business procedure in predictable manners. Itunga & et. al. (2012) stated that organisational culture depicts simple norms and principles that are shared by the members. In this context, it can be stated that various forms of culture such as organisational, national or international can have varied influences on strategy and thus are regarded as a CSF for EPR. Thus, culturally bound strategies can result in effective EPR in an organisation. IT IT is an essential element and natural partner of EPR, which also has constant and important role in businesses. Successful utilisation of IT is essential in implementing EPR. Contrarily, overlooking the role of IT can result in the failure of EPR. IT in this context encompasses areas of hardware, software and different applications which provide people with necessary information. Furthermore, IT brings effectiveness by pulling aspects of human resources, business and organisation at one place. Organisations usually face challenges to cope up with quick emergence of technologically oriented paradigm shifts with respect to EPR. For instance, transformation of communication from letter to emails and shift from analogue broadcasting to digital broadcasting are all examples of changes in IT and organisations are required to be prepared for these changes in order to make effective reengineering (Hill, 2010). In most organisations, EPR begins from IT department. IT not only accelerates the business process, but also incorporates other operational procedures, minimises faults and enhances productivity. Organisational Structures Traditionally, bureaucracy was regarded as a dominant type of organisational structure. However, after 18th century, several bureaucratic processes have been replaced with other mechanisms namely enterprise process. Ironically, this is regarded as re-creation of the approaches found in organisations in early periods of 20th century. In EPR, organisations are observed as machines, rather than bureaucracies and thus it (EPR) attempts to eliminate the unending formal specifications of work breakdown structures. Better organisational structure enhances the capability to execute key decisions in better and quicker way than the competitors. Hence, changing the organisational structure helps to fulfil specific strategic objectives of enterprise reengineering (Blenko & et. al., 2010). A flexible organisational structure is required in order to make EPR effective and it inspires innovativeness. Furthermore, less bureaucratic structure can result in participative environment which is also critical for effectiveness of EPR (Terziovski & et. al., 2003). Cooperative Working Situation Cooperative working situation is one of the important and extensively cited CSFs for effective EPR. In any organisation, better collaboration can enhance team spirit and higher performance. Furthermore, cooperative working environment also facilitates to generate friendly relations, which is a main characteristic of any reengineering process. Collaborative environment is also essential to minimise resistance to change and thereby simplify the EPR implementation (Salimifard & et. al., 2010). Support and Commitment from Upper Management The upper management plays a vital role in the determination of strategic direction of any organisation. Thus, the level of management support in EPR implementation is quite critical. Upper management also must possess sufficient knowledge regarding EPR implementation and make vital decisions in implementation procedure. Additionally, it is the responsibility of upper management to stimulate the employees and have an approachable communication with EPR team (Dennis & et. al., 2003). Training Training plays a critical part in effectiveness of EPR. Since EPR transforms the existing organisational procedures, the employees must possess adequate skills to conduct new activities. By providing adequate training, employees will gain comprehensive understanding of their new tasks (Ahmad & et. al., 2007). Proper Financial Resources EPR is a long run investment and a costly procedure. Thus, organisations must have proper financial resources for implementing changes as well as to confront unpredictable conditions (Maleki & Beikkhakhian, 2011). Communication Communication is also regarded as a key component for effectiveness of EPR. Communication is required during the reengineering process, at every level and for every important stakeholder. Communication helps to ensure patience and understanding of the operational and cultural changes required to make EPR successful. Communication must occur in a frequent manner and from both directions. Besides, in order to be effective, the communication process must be open, frank and apparent (Davenport, 1993). Empowerment Typically in case of any organisational changes, the decisions of upper management are pushed down to lower levels, which often create confusion and resistance and ultimately result in the failure of change process. Thus, empowerment of both individual employees and team members is a vital CSF for effective EPR effort. Increased empowerment can establish a culture where employees at every level can feel more liable and accountable towards the changes in business process. Additionally, increased empowerment can also encourage self-management and collaborative environment within organisations which facilitate the reengineering process (Al-Mashari & Zairi, 1999). Recommended Management Approaches In order to attain the aforementioned CSFs, the following recommendations are provided to the Chief Executive and Board of Directors of Ford Motor Company. Compensation and Incentives Since it has been identified that cooperative working environment is required for effectiveness of EPR, it is recommended that the management must provide compensation and incentives within budgeted limit. The employees must be well acquainted with the changing functions and products so that they understand what are required to be done in order to support key business processes (Dubey & Bansal, 2013). Sharing of Information The communication is the other vital CSF for EPR. Thus, in order to enhance the communication, the management also needs to ensure better sharing of information, especially between key stakeholders. It is recommended that during reengineering process, Ford can arrange regular meetings and provide support in terms of performing together with the accomplishment of mutual objectives (Holland & et. al., 1999). Shared Vision and Objectives Effective reengineering cannot be achieved without developing shared vision. In this context, it is recommended that upper level management must publicly and explicitly recognise the EPR as their top priority during its implementation and should be committed enough. These tasks comprise delivering people with adequate support and time to adjust with the new process. New organisational structures and new roles along with responsibilities must be established. In addition, during any kind of conflict situation, the management must mediate between disputed parties (Jafari & et. al., 2006). Recognition of Key Processes Effective reengineering necessitates recognition of existing process, value adding process and non-value adding process. Therefore, it is recommended that in order to be effective, management must understand the material flows along with information flow within the organisation. It would help to understand the unnecessary processes and therefore trigger effective reengineering process. Several models can be used by the management to understand key processes. For instance, while evaluating the manufacturing line performance of Ford, queuing model can be used in order to determine the congestion and delay time (Gunasekaran & Kobu, 2002). Conclusion In conclusion, it can be stated that EPR is a practice by which improvements can be obtained. Since today’s business environment is driven by high level of competition, automobile organisations that desire to enhance the market share and to increase the earning must adapt to the changes in a regular process through EPR. However, EPR requires considerable changes in operational process and work style. Therefore, it involves transformation with respect to job activities, knowledge and even organisational cultures. It is worth mentioning that EPR is not free from failure and thus, several factors must be considered in order to make EPR successful. The report identifies nine CSFs for automobile segment in order to make it a successful one. Proper management approaches are also required in order to attain these CSFs. The recommended management efforts can ensure that EPR has minimum possibility of failure. References Ahmad, H. & et. al., 2007. Business Process Reengineering: Critical Success Factors in Higher Education. Process Management Journal, Vol. 13, No. 3, pp. 451-469. Al-Mashari, M. & Zairi, M., 1999. BPR Implementation Process: An Analysis of Key Success and Failure Factors. Business Process Management Journal, Vol. 5 No. 1, pp. 87-112. Blenko, M. W. & et. al., 2010. The Decision-Driven Organisation. Harvard Business Review. Davenport, T., 1993. Process Innovation: Reengineering Work through Information Technology. Harvard Business School Press. Dennis, A. R. & et. al., 2003. Breaking the Rules: Success and Failure in Groupware-Supported Business Process Reengineering. Decision Support Systems, Vol. 36, No. 3, pp. 31-47. 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