The Impact of Business Process Re-Engineering on Organization Performance - Literature review Example

Name: Institution: Title: The impact of Business Process Re-engineering on Organization Performance Tutor: Course : Table of Contents Table of Contents 2 6 Specification on How Tasks are to be carried out 6 Optimization of Sub-processes 7 Motivation of Employees 7 Changes in Existing Business 8 Examination of Competence and Effectiveness of the Organization 8 Redesign the Existence of Business Exercises 9 Fundamental Constituents of Business Organization 10 Business process reengineering in relation to Modern Development 11 Instruments that support Business Process Re-engineering 14 Empowerment of Workers 15 Conclusion 16 Bibliography 18 Introduction Business process reengineering refers to analysis and design of workflows and processes in an organization. It is the core way in which companies become more competent and modernize. The main aim is to transform a company in a way that directly affects the performance. Harmon (2007) argues that in management, re-engineering is the basis for several current developments. Business process re-engineering involves redesigning and changing the prevailing business exercises or process in attaining dramatic development in organizational performance. The development of an organization is a continuous process but the speed of change has enhanced in manifolds. Within a volatile international world, organizations can increase competitive advantage via business process re-engineering by radically redesigning the processes selected, for instance, in Australia many companies have developed a control mechanism that links performance appraisal to strategic objectives. Business process re-engineering means transformed processes that jointly form a component of bigger system aimed at allowing an organization to empower itself with contemporary technologies business solution and innovations (Abramowicz & Tolksdorf, 2010). The effective performance of an organization has become a watchword in current business. This therefore has availed inexorable pressure for business process re-engineering. The extensive and rapid growth of competition in all markets have raised significant questions such as how work need to be redesigned and how it can be performed well. This therefore has caused many organizations to venture into business process re-engineering (Kock, 2005). Impact of business process reengineering in organization performance Business process reengineering is currently attaining dramatic performance development via radical transformation within an organization processes, business re-architecting and processes management. Kock (2005) argues that the process normally entails organizational boundaries’ redrawing, reconsideration tasks and skills. This is always possible with the development and use of models. Whether physical, mathematical, computer or structural models, engineers normally develop and analyze models so that they can forecast about designs’ performance or understand the devices’ behavior. More specifically, business process reengineering is always described as application of scientific methods, tools and models to cause essential restructuring of an enterprise that can result in major performance improvements. Coca Cola Company for instance, is investing a lot on scientific methods to redesign its process of production. Retooling, redesign and re-orchestrating creates key components of business process reengineering that are important for a company to concentrate on result that it wants to attain. The result pursued is always an ambitious result (Harmon, 2007). According to Bider and Johannesson (2005), business process reengineering normally benefits customers via vital reduction of transaction time, serving flexibility and developed value chain of service. Organizations usually benefits by enhanced volume of business, more productivity, minimized operating cost that leads to more profitability and developed worker loyalty and sense of organizations’ belongingness and establishment. Workers can also benefit via empowerment thus leading to more job satisfaction, useful work rotation as an extra incentive and useful interface with customers as task is distributed evenly (Fischer, 2002). High Competition Strengthened competition and enhanced business complexities usually forces companies to reorganize the organizational structure and model of the business via emphasizing on deconstruction of value chains and realigning business processes. In the view of mixed successes of several business process reengineering projects that aims at changing inefficient job processes, organizations need to maximize outcomes from the model in a real business situation. Reengineering normally enables organizations to cater for changing dynamics by redesigning their operations and functions to achieve emerging challenges of slashing the costs of operation, outsourcing, payments and settlements systems, portfolio investment, consolidation and cooperation (Bider & Johannesson, 2005). Specification on How Tasks are to be carried out Business process reengineering is an approach for redesigning the manner in which work is done to better support the mission of an organization and minimize costs. Reengineering normally begins with a high level evaluation of organization’s strategic goals, mission and customer requirements. In reengineering process, fundamental questions such as if the mission need to be redefined, the strategic goals are in line with mission and about the organization’s customers (Abramowicz & Tolksdorf, 2010). A company might find that it is working on questionable suppositions, especially in terms of wants and requirements of the customers. It is only after the company rethinks of what it needs to be done that it proceed on deciding how best it can operate. In the framework of the main evaluation of mission and goals, reengineering concentrates on the company’s business process, that is, the steps and procedures that control how resources are utilized to make products and services that can meet the requirements of certain customers or markets. As a work steps’ structured ordering over time and place, a business process is capable of decomposing into certain activities. It can also be measured, improved and modeled. A business process can be redesigned completely or eliminated altogether. Coca Cola Company for instance, identifies, analyzes and redesigns its main business processes with the aim of attaining dramatic developments in vital performance measures, such as quality, cost, service and speed. Business process reengineering therefore recognizes that business processes of an organization are fragmented into sub-processes and operations that are undertaken by a number of specialized functional areas in the organization. No one is always responsible for the general performance of the whole process (Kock, 2007). Optimization of Sub-processes Reengineering normally ensures that the performance of sub-processes is optimized. This normally results in some benefits. The improvements can only be yielded if the process is fundamentally efficient and not outmoded. This therefore makes reengineering to focus on redesigning the entire process so that it can attain the greatest probable benefits to the organizations and their customers. This drive for recognizing dramatic developments by basically rethinking how organization’s operation needs to be done thus distinguishing reengineering from process development attempts that concentrates on functional or incremental development. Motivation of Employees Reengineering motivates employees in an organization. The two cornerstones of any company are the individual and processes. In case people are motivated and work hard, yet the processes of the business are awkward and non-essential activities prevail, the performance of an organization will be bad. Business process reengineering therefore is the key in changing how individuals work. What seem to be insignificant changes within the processes can have a dramatic impact on cash flow, customer satisfaction and service delivery. The act of documenting business process can typically improve the efficiency of an organization by 10%. Changes in Existing Business According to Fischer (2002), reengineering changes the practices of the existing business. This normally impairs the whole process of reengineering as it stifles originality in finding modern ways of competing. Business process reengineering can fall short when dealing with modern products or services since any strategic objectives attained are simply the by-product of improved productivity. Strategic reengineering normally addresses this shortcoming by concentrating on designing an organization that is capable of competing. This is usually accomplished by undertaking strategic initiatives at the beginning of reengineering process. The initiatives seek to offer understanding of the competitors, markets and organization’s position in the industry. Serious success factors that are needed in competing are normally identified and prioritized (Fischer, 2002). Examination of Competence and Effectiveness of the Organization Business process reengineering examines the competence and effectiveness of an organization’s processes. It normally ensures that goods and services of high quality are delivered in the most productive manner at prices that are most competitive. Business process reengineering assists organizations to beat their competition, as well as becoming more innovative. The process of business reengineering can only be successful if the operation, in which it is based, is directly linked to the requirements and objectives of the business. The effect of business process reengineering to a given organization cannot be over-emphasized with a country’s economic condition since it normally assists in achieving the domestic and industry requirements or pursuance of high and better performance. The process assists in achieving the overall objectives of an organization. Business process reengineering enables business organizations to transform processes that jointly form a component of a bigger system that aimed at allowing companies to empower themselves with modern technologies business solution and originalities. In the context of transforming customer expectations, technological discontinuities, and enhancing environmental uncertainties managers of businesses have a huge challenge of making the correct strategic choice and setting the strategic priorities in order to assign the resources to various functions in a way that is efficient for business success. Redesign the Existence of Business Exercises The main aim of reengineering the performance of a business is to redesign the existence of business exercises in order to attain improvement in performance. Reengineering enables managers to develop modern tools, modern concepts, modern organization and the modern mindsets in coping up with turbulent and chaotic surroundings that normally leads to continuous change. Managers therefore are capable of achieving this through useful and efficient business process reengineering. It is therefore evident that business process reengineering has a significant positive impact. Reengineering normally affects several variables such as employees, technology and people in an organization. The process is a useful weapon for any corporate company that seeks to improve its current organizational performance and plans to meet cost leadership strategy in operating industry and surroundings. Reengineering process is always a useful instrument for organizations that struggle to function in the competitive world, that is, reengineering business process is essential since it encourages achievement of breakthrough performance and the long lasting strategy for organizational development. Fundamental Constituents of Business Organization The fundamental constituents of all business organization are individuals and processes that cater for the people’s requirements. The constituents are always complementary to each other. In scenarios where people work hard and put a lot of efforts, yet the business process reengineering is not backed up adequately, the employees’ motivation and the performance of the given organization will be definitely poor. It is therefore important to know how business processes can be modeled. Business process reengineering is the key in transforming individuals’ performance which in turn transforms the whole business performance. The process is always very crucial in a way that a small alteration can result to tremendous out comes. The process of testing has the ability of influencing the flow of cash, service delivery and customer satisfaction. The Simple plan of documenting business processes can always enhance the effectiveness of an organization. Business process reengineering entails radical redesign of main business processes in attaining dramatic developments in productivity, quality and cycle times. In reengineering a business process, organizations normally begins with a blank sheet of paper and rethink about the prevailing processes in a way that can deliver a lot of value to customers. The processes normally implement a modern value system that places enhanced emphasis on customer requirements. Business process reengineering normally ensures that organizations minimizes organizational layers and do away with unproductive activities in two major areas. For example, coca cola company usually redesign functional teams into cross-functional teams. It can also employ technology to improve on data dissemination and making of decisions. Business process reengineering in relation to Modern Development Business process reengineering has of late developed rapidly towards modern management philosophy. The intrinsic business process orientation can always transform the perception of global management from structural to that of process observation. Business process reengineering is an aspect of business process management. Global business processes reengineering requires special attention since the multi-faceted structure of international corporations enhances the complexity of business processes thus influencing the alternatives of redesigning. Business process reengineering has developed rapidly towards modern management philosophy that is based on predecessors like overhead value analysis, total quality management and just-in-time management. Business processes can always be reengineered by steps redesigning, transforming the logical and temporal steps’ sequence or by transforming a given characteristics of processes. Information technology normally favors the view that modern technology is an enabler in the process of reengineering. Information technology need to be monitored continuously to determine whether modern process designs can be generated or contribute to business process’ performance. The break through of business process reengineering normally linked closed with information technology that open modern dimensions of reorganization’s process. Moreover, an organization that usually takes the initiative in process development or redesign normally influences the role of information technology. In case the department of data processing initiates the process of transformation, information technology then will have more generating function for modern process redesigns. On the other hand, if top management sets off process transformation, then the process might require restructuring first and then optimized later through information technology (Abramowicz & Tolksdorf, 2010). According to Hofstede and Benatallah (2008), modern reengineering teams normally employ consultant’s assistance for their project. Consultants normally play a significant role in business process reengineering projects. They are always objective and resistant to internal politics. Having involved in reengineering process, consultants normally offers significant information and finest practices from a broad range of experience. Consultants in business process reengineering can serve as better communication bridge between management and the team. They can write project documentation, facilitate and control meetings, make presentations to associates and stakeholders and contribute professional ideas in company’s work processes. In understanding the impact of business process reengineering it is always important to analyze its meaning. These incorporate analyzing the mission statements and vision statements of an organization. Mission statements normally define the purpose of an organization. The statements are usually useful in describing the special feature of a given organization that differentiates it from others. Vision statement on the other hand is important in providing a clear picture of the position that it desires to attain in future. Developing the statements into a distinct business plan normally ensures that the project objectives are achieved. Defining behaviors therefore plays a significant role in attaining the goals set for the organization. Production of main performance measures enables organizations to track their progress. Reengineering normally makes it possible to relate improvements of organization’s efficiency to its established culture. It also makes it possible in identifying essential initiatives that usually develop the business processes performance and thus enhance organization’s performance (Debela & Hagos, 2011). Business process reengineering ensures that goods and services of high quality are delivered in the most productive manner and at prices that are more competitive. Reengineering usually empowers people. Empowering provides employees with right information, right training, right surroundings and the power that they always desire. Business process reengineering changes the perception of global management from structural to that of process observation (Hofstede & Benatallah, 2008). Instruments that support Business Process Re-engineering Leon (2007) notes that in order to understand the effect of business process reengineering in organizational performance, it is important to identify the instruments that support the process. Business process reengineering entails management of vast amount of information that concerns business processes, systems and data. A perfect tool is always required in facilitating the management of this huge amount of data. This therefore normally calls for good business process reengineering software that should be equipped with graphical interface that permits rapid documentation. The software should also have value stream mapping feature. The business process reengineering software is always efficient thus improving the performance of any organization that adopts it (Debela & Hagos, 2011). Business process reengineering usually develops organization’s productivity. The process of testing is always essential in aligning individuals, processes and technology with the help of appropriate plan for attaining business integration. The reengineering process should take into consideration the whole organization for full fledged development in performance and efficiency. Manufacturing and service companies have increased their interest in business process reengineering simply because the process support organizations’ evolution in a dynamic and rapid change in business environment. The process provides a helpful opportunity in attaining real breakthrough in organization’s performance. Business process reengineering projects have powerful impact on organizations’ control system that has established the process. Reengineering entails comprehensive changes to business processes and support structures, organizations and people (Tsai, 2003). Empowerment of Workers Business process reengineering is very essential since it normally empowers people. Empowerment implies providing individuals with ability to perform work. Empowering provides employees with right information, right training, right surroundings and the power they require. In Coca Cola Company for instance, employees through business process reengineering are assured of good training and a friendly environment. Information systems assist in empowering people by offering information, training and instruments. Information provision assists employees to do their task efficiently. Information provision is an initial aim of many information systems though the systems give information in several ways (Leon, 2007). According to Tsai (2003), a number of information systems give information that is vital in informing business processes, that is, it can provide information about prices that are used in creating customer’s bill in a restaurant. Other systems normally offer information that is probably effective and that can be utilized in a discretionary way such as medical information that various doctors might utilize in various ways. Empowering employees is all about providing the right tools. This can be described well by considering the manner in which planning analysts provide consolidated corporate strategies that are based on individuals divisions’ and departments’ plans. The plans can be submitted on paper. This therefore implies that the major task will be to add up numbers in determining the forecasted corporate bottom line (Kock, 2007). In case the plan is transformed in the process of negotiation, the planning analyst can recalculate the forecasted outcomes. With right tools, the arithmetical parts of plans can be arrived at in a consistent and electronic format that permits computer consolidation. This therefore normally makes an analyst free to perform more productive task of analyzing the plan’s quality. Information systems are always designed to give information that is necessary in supporting the demanded work practices. The systems are usually employed for training and learning (Leon, 2007). Conclusion From the discussion, it is quite clear that business process reengineering impacts positively on performance of an organization. The process reengineering usually makes an organization to focus on outcome that it wants to attain. Reengineering is often beneficial to customers through crucial reduction of transaction time, serving flexibility and developed value chain of service. Organization can benefit through enhanced volume of business, more production, reduced cost of operation that can lead to more profits and in developing the loyalty of workers and sense of organizations’ belongingness and establishment. The process usually changes the manner in which work is done to better support the mission of an organization and minimizes costs. Reengineering usually focuses on company’s business process, that is, the steps and procedures that control how resources are utilized to make products and services that can meet the requirements of certain customers or markets. It is also evident that Business process reengineering identify, analyzes and redesigns the main business processes of a certain company with the aim of attaining dramatic developments in vital performance measures, such as quality, cost, service and speed. The process impacts organization through employee’s motivation. It can also change the practices of the existing business. It can also be concluded from the discussion that information technology facilitates the process of reengineering. Information technology therefore is usually monitored continuously to determine whether modern process designs can be generated or contributed to business process’ performance thus improving the performance of organizations. Bibliography Bider I. & Johannesson P., 2005, Goal-oriented Business Process Modeling, Emerald Group Publishing, New York. Leon A., 2007, Erp Demystified, 2/E, Tata McGraw-Hill Education, Melbourne. Kock N. F., 2005, Business process improvement through e-collaboration: knowledge sharing through the use of virtual groups, Idea Group Inc (IGI). Harmon P., 2007, Business process change: A guide for business managers and BPM and six sigma professionals, Morgan Kaufmann. Abramowicz W. & Tolksdorf R., 2010, Business Information Systems: 13th International Conference, Springer, London. Hofstede A. & Benatallah B., 2008, Business process management workshops: BPM 2007 international workshops, Springer, London. Tsai, H., 2003, Information technology and business process reengineering: new perspectives and strategies, Greenwood Publishing Group. Debela T. & Hagos A., 2011, The Design and Implementation of Business Process Reengineering in the Ethiopian Public Sector: An Assessment of Four Organizations, African Books Collective. Fischer L., 2002, Workflow handbook, 2002, Future Strategies Inc., NY. Kock N. F., 2007, Systems analysis & design fundamentals: Business processes redesign approach, SAGE, London. Read More