Business Process Transformation in Catmart Co - Case Study Example

Business process transformation Model of business process transformation Catmart Co (CCo) is the largest direct mail and online catalogue marketing company, operating from the headquarters in the United Kingdom (UK). The UK based company offers a variety of products in different geographical markets. It is primarily involved in selling books, garments and electronic products. Catmart has continually reinvented the services and increased value of the business (Mohapatra, 2013). There is a need for certain changes in the product development and inventory management process of Catmart. The company is hopeful that reengineering the business process can result in significant cost savings and better integration of the supply chain functions (Mohapatra, 2013). The changes can affect stakeholders such as, product development specialists, inventory control specialist and the buyers mostly (Tønnessen, 2014). Catmart intends to merge with TLP for enhancing the process of new product development. TLP is a United Sates (US) based e-commerce company, which is involved in selling used products. Catmart expects that the marketing tie-up will leverage the strength of both companies and generate mutual benefits in long run. The merger can help in the business process transformation effectively. After the merger, the company will be equally involved in purchasing and selling products. The merger can entail effective cost savings and help Catmart to grow (Tønnessen, 2014). It can enhance business opportunities for the company. A compact business model can thoroughly help in the proper understanding pertaining to effectiveness of the BPR. The business process reengineering model that can be suitable for Catmart in order to sustain in the online marketing business is laid down below. Introduction of new distributor and increased pace of distribution- Catmart should ensure that the adaptation of a new form of service is conveyed to all individuals who would be affected by the change. All stakeholders must be reported about variations in the process of business through proper meetings (Tønnessen, 2014). Extensive meetings with the distributors are essential. They are the life blood of a business and neither Catmart nor TLP can operate successfully without them. Besides the existing distributor, the tie-up will introduce a new one. So, informing the distributors of both the companies about the tie-up is important (Tønnessen, 2014). The workflow between the distributors should be divided equally. Catmart should secure that profitability of the distributors does not diminish and in turn de-motivate them to remain associated with the company. Also, the distribution of products needs to be faster. Over past few months, Catmart has experienced a fall in the profit margins due to slow and weak system of distribution. The distributors have failed to perform as per their capacity. The introduction of a new distributor can enhance levels of competition and improve the workflow (Mohapatra, 2013). Marketing the product- Extensive information about the merger should be provided to all customers associated with Catmart and TLP. Through advertisements in the electronic media, the e-commerce giant can update the masses about the new product development. The promotions should highlight on combined benefits that the customers will gain from selling the old products and purchasing new ones. The joint initiative can increase the levels of awareness and adaptation related to the online platforms for both selling and purchasing purposes. The promotions should be carried out to inform the customers that they would be able to receive end-to-end solutions to all their problems. The promotions should ensure that the customers realise that selling products is vital for the process of buying (Huang, et al., 2014). Preparing the workforce- The employees associated with Catmart should be communicated about the merger. The workforce should be given adequate knowledge about the new company and its area of function. It is necessary to provide the needed training to employees, which can enable them to comply with requirements of the current job. On gaining the important information about the BPR mechanism, staff will be adequately able to set their goals and function accordingly. Catmart should make sure that the workforce is devoid of anxieties associated with the new product development process (Feldmann, 2013). Adequate usage of capital- The marketing partnership can result in cost saving. The excessive burden of investment can be shared between Catmart and TLP so as to ensure maximum profitability for both. The companies can have 50% partnership in the business whereby any gains and losses can be equally shared. Owing to the acquisition, the funds will be adequately invested and taken care of by both the management boards (Tønnessen, 2014). Therefore, the above model of business process reengineering can be helpful for Catmart in the long run. 2. Stages involved in process of business process reengineering There are several stages that Catmart needs to undergo for facilitating implementation of the BPR model. The stages involved in the process of business process reengineering can be explained as follows: Figure 1: Stages in the BPR implementation (Source: Feldmann, 2013) Identify the process and opportunities related to it- It is vital for Catmart to analyse the effect of business process reengineering on its online business. If the business is able to flourish effectively through the tie-up, Catmart should continue with the process of business process reengineering. On the other hand, if the whole process increases the level of investment, then Catmart should reconsider the same. A thorough identification of problems associated with the tie-up and development of the new product should be conducted by the company’s research and development department. Review and analyse the process- After identification of the new process, it should be reviewed. A further screening can help the e-commerce company to interpret effects of the tie-up and new product development on its overall efficiency and profitability. If the new process is able to save cost, benefit the consumers, improve the market development and boost organisational growth, then Catmart can carry on with the course of testing the process (Dale, Van Der Wiele and Van Iwaarden, 2013). Testing the new product development process of selling old products and purchasing a new one simultaneously can help the management of Catmart to rightly interpret the benefits entailed. Testing the design and process- The process of testing can be done after proper identification of the target market and needs of the customers. Catmart should identify the existing customers and the new customers acquired through the merger. Following identification of the customers, it is important to assess their reaction to the tie-up made between the online purchaser of used goods and the seller of new ones. Extensive joint marketing should be done by Catmart and TLP in order to understand the customers’ reactions to the new product development process. Implementation of the process- The final step involved in the new product development process of Catmart is implementation. If the results of test marketing appear to be positive, the e-commerce company should apply the new process for betterment of the business. On account of fulfilling the aims related to cost saving and business growth, Catmart should incorporate the new product development process immediately. 3. Principles guiding the business process reengineering There are a number of principles guiding the process of business transformation. The most important principles that will guide this process in context of Catmart can be listed as follows: Focus on outcomes not task- The principle of goal orientation states that every process of an organization must be organized around the goals and not the tasks. The activities of Catmart should be structured in manner that emphasizes more on accomplishment of the organizational goals (Mohapatra, 2013). Responsiveness to the needs of the customers- Classification of the new product development process should be extensively conducted. The company should realize benefits associated with the process pertaining to organisational profitability and overall market share. Catmart should confirm that the process of purchasing and selling of products is done in a swift manner, which suits the consumers’ needs. The products must be delivered on time and the distributors of TLP need to be as efficient as that of Catmart. The business transformation can be successful if all people and processes related to Catmart are able to realize the importance of the change in terms of business prosperity (Tirkman, 2010). Effective leadership- Effective leadership is the most important principle of business process reengineering. The leaders of Catmart should have the required competency, involvement, commitment and genuine interest in the employee and their activities. The management of Catmart should handle the employees of TLP as efficiently as their own. They should give responsibilities and grant accountability from employees of TLP equally. The management of Catmart must encourage initiative, trust and creativity in all employees associated (Mohapatra, 2013). Process orientation- Catmart is required to empower and create process owners and endow them with the responsibility for all process outputs. The employees should, therefore, be made the process owners who will be responsible for the outcomes. The process orientation can lead to greater accountability for performance (I. Jacobson, Ericsson and A. Jacobson, 2000). Value focus- Catmart should secure that all non-value adding activities are rightly identified and targeted for elimination. Through the tie-up and business process reengineering, Catmart should ensure maximum benefit to the customers. Enhancing value of the clients should be the prime focus of the company. The technique of simulation can help in the process of creating value effectively (I. Jacobson, Ericsson and A. Jacobson, 2000). 4. Handling management of change Catmart and TLP should deal with the management of change in a very strategic method. Both the e-commerce companies should make sure that subordinates are responsible and accountable only to their previous superiors. In other words, all employees of Catmart should function under the same management. Likewise, the managers of TLP should also ensure that the employees are responsible to them only (Wheeler, 2010) Hence, the employees will function under the management of their respective companies, which can contribute towards managing the employees in a more suitable manner. The employees should also be effectively trained by the management so as to meet needs of the business transformation process. The management of Catmart should take joint decisions and handle the employees as per need of the business (Reengi, 2000). 5. Role of Information Technology (IT) in this process- IT is a potent source of competitive advantage for any business. Catmart being a progressive firm should utilise information technology in order to gain maximum profitability in business (Ozcelik, 2013a). Catmart can utilise various forms of information technology to blur the lines of barriers in communication between the management and the workers and fuel the process of reengineering. Information technology can be suitably utilised by Catmart to expedite different forms of office tasks, as opposed to transforming them. IT can easily be a potential source of competitive advantage for Catmart as well as help to overcome the communication barriers between the workforce and the customers of Catmart. Catmart and TLP can have increased access to each other’s information and greater coordination across the organisational units through effective usage of IT. Catmart and TLP can have better co-ordination through the right usage of IT. The incorporation of fresh digitalised infrastructure can enable Catmart to run efficiently and smoothly and also respond promptly to the opportunities and emergencies related to BPR. The advertisements and marketing of the products can also be done through the usage of IT. As a result, the IT capabilities of Catmart and TLP must be able to support the business process and any related transformations (Ozcelik, 2010). 6. Critical success factors- The critical factors for success of Catmart in the business process transformation can be highlighted as follows: In-depth analysis of the new product development process- It is important for Catmart to analyse effectiveness of the new product development process. The analysis can help Catmart to understand deficiencies in the process and eliminate them effectively (Magdinceva Sopova and Postolov, 2012). Effects on stakeholders- Effects of the transformation process on the stakeholders such as, the consumers, shareholders, employees, workers and distributors, can also be determined through proper study of the BPR model. Catmart should proceed with the process only if the stakeholders are affected positively (Jeston and Nelis, 2014). Increased cash flow- Catmart should proceed with the business transformation process if the amount of cash inflow in business appears to increase consequently. The main aim of the transformation process in Catmart is to save cost. Hence, the new process must ensure reduction in the cost and increase in the company’s profit margins (Jeston and Nelis, 2014). Acceptance by the customers - The acceptance of the new process of selling goods before purchasing new ones has the capability of attracting a large number of customers. So, the business process transformation can equally benefit the online purchaser of used goods, TLP and the seller of new products, Catmart. The tie-up can benefit the company in the form of wide acceptance of the new process development among customers (Laguna and Marklund, 2013). Acceptance by employees- The employees of both Catmart and TLP might hesitate to adapt to the idea of business process reengineering. The levels of anxiety can be high among them initially. Then again, with the help of proper training, this issue can be solved effectively (Davenport, 2013). Catmart should ensure that the employees are adequately trained and guided through appropriate training so as to accept the process. Acceptance by the distributors- Catmart should make sure that the distributors are well-informed about the business process transformation so as to conduct job tasks in the best possible manner. The distributors of TLP should also be informed about the tie-up and the resultant new product development process, thereby enabling them to function as per necessity of both the companies (Ozcelik, 2010). Joint marketing- Catmart and TLP must jointly promote the new business process transformation model. Both the companies should ascertain that the customers positively react to the new process developed by Catmart after acquisition of TLP. By way of promoting BPR in an efficient manner, the business will be able grow rapidly (Huang, et al., 2014). Therefore, these are the critical success factors for business process reengineering that Catmart needs to consider so as to progress in business successfully. The business process changes of Catmart can garner greater acceptability if the company takes the above mentioned critical factors into consideration (Wheeler, 2010). Appropriate steps undertaken by Catmart based on these aspects to develop the business process reengineering can prove beneficial in the long run. Reference List Dale, B. G., Van Der Wiele, T. and Van Iwaarden, J., 2013. Managing quality. Hoboken: John Wiley & Sons. Davenport, T. H., 2013. Process innovation: reengineering work through information technology. Cambridge: Harvard Business Press. Feldmann, C., 2013. The Practical guide to business process reengineering using IDEFO. Wokingham: Addison-Wesley. Huang, S. Y., Lee, C. H., Chiu, A. A. and Yen, D. C., 2014. 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