Business Process Re-Engineering - Literature review Example

Business Process Re-engineering Institution: Instructor: Course: Report on Business Process Re-engineering (BPR) Introduction Business process re-engineering (BRP) is an inclusive process that applies a dramatic/radical change in the way business processes principles are performed. According to Homa (1995), BRP focuses on designing and analyzing processes within an organization, that helps organizations improve their services, reduce operation cost and out-smart their competitors. In addition, BRP was developed to identify superfluous redundant activities and eliminate them. Moreover, BRP visualizes on new work strategies, contained in the design process activity and the implementation of alteration in respect to organizational dimensions. Scholars argue that, BPR is a redefinition of many business practices such as ‘system analyses’. However, Martin and Cheung (2005), perceived BPR as a familiar concept integrated in a new process. Michael Hammer, then a computer science professor at MIT pioneered BRP in 1990. Factors that determines Success/Failure of BPR Implementation Paper (1997) posited that, half of early business re-engineering projects implemented in various companies failed because they did not attain the business results bottom line, this was as a result of failure to study the ‘success factors’ in the re-engineering processes. The success and failure factors are critical determinants in determining the success/failure of BPR implementation. The factors are highlighted below Top management sponsorship: changes in the business environment typically affect technology, processes and culture in the workplaces. Consequently, changes in either of these areas require leadership, money and resources. It is worth noting that, changing these factors at the same time is extraordinary. In this regard, failure by the top management to provide the necessary support will severely cripple the success chance of the project. According to Gonzalez-Benito, et al (1999), without top management sponsorship, implementation process will be inefficient and ineffective. Line ownership: most companies redesign team are of SWAT type, in this regard most management respond to line operation crisis using external consultants. Gonzalez-Benito, et al. (1999) posited that, external consultants cause a small significant change in organization. Jackson (1997), recommended that, the changes are not better to staff members either, but to those accountable in day-to-day operation. Jackson (1997), meant to show that, the terms of accountability and engagement should be clear. Strategic alignment: business management should be able to tie their BPR project back to key business goals and objectives and comprehensive strategic direction for the organization. Maull, et al. (1995), argued that, the linkage should expose the thread from the top downwards, so that every individual in the organization can smoothly connect the BPR and the overall business direction. The management should demonstrate the arrangement from financial department, employees, and customer service perspective. When BPR projects are not aligned with organization strategic direction, it can be non-advantageous. Maull, et al. (1995) posited that, a company might invest in a place that does not have core competition, and then later this ability is outsourced. In this regard, BPR initiatives will be wasteful, as it will be stealing other strategic projects resources BPR team composition: selection of BPR team is crucial in the implementation process. The team is like the BPR nerve system, since it is involved in making key decisions and recommendation. In addition, the team communicates to the entire organization, concerning details and significances of the BPR program. For an effective BPR team members should be competent and motivating. Gonzalez-Benito, et al (1999) posited that, the team member’s credibility and creativity should be beyond the reasonable doubt. Moreover, the team should be empowered and trained on how to brainstorm crucial issues in the implementation process. Jackson (1997) asserted that, an effective team should contain top management, technology groups, stakeholders, finance and other important groups responsible in the implementation process. The team efforts should focus on locating opportunities and designing new work processes that will produce a large quantity of gains and create a competitive advantage over other competitors. Adequate IT infrastructure: Hammer (1990) recommended that, IT usage challenge the supposition intrinsic in the work process that has existed before the entrance of communication technology and modern computers. Researchers believe that, IT plays a crucial role in the implementation of BPR program. According to Gonzalez-Benito, et al (1999), adequate information system integration, effective IT infrastructure, and software tools are crucial elements that determine the success of BPR projects. The extent to which the information is delivered is determined by the connection between components of IT infrastructure and the way these components are composed. Most researchers view the connection between IT and BPR as irreversible. For instance, Ford managed to reduce headcount in the procurement department by 75% through application of IT in connection with BPR. Basically, IT infrastructure and BPR are interrelated in the sense that when an organization requires new processes, they use IT to determine the components, then they USE the IT capabilities to provide BPR with options. BPR models A number of theoretical models were developed to illustrate the different facets of BPR concepts. For instance, Infotrac listed eighteen articles that describe such models. Generally, all these models can be grouped into two, first group of models address the application of BPR concepts in various business existences. This group can be demonstrated by title such as ‘re-engineering the financial function’ by Robbins and Drolly (1995); ‘re-modelling a company via system re-engineering’ by Thomas and Davies (1996); and finally ‘ BPR simulation modelling’ by Lee and Elican (1996).the second group of models present intensification’s to the original BPR concept. This group is demonstrated in titles such as ‘a framework for BPR decision support system’ by Aldowaisan and Gaafar (1996); and ‘integrating BPR ‘by Heisig, et al, (1997). According to Jackson (1997), BPR offers a new approach and perspective in present organization works. BPR concepts have gained substantial attention in most media houses. The difference between BPR and other approaches such as ERP, TQM and traditional hierarchical is downsizing and restructuring in response to lower demand. For over 200 years, companies have been following Adam Smith principles, to break down their work into simpler tasks and coating them with hierarchical structure to manage the organization growth. However, BRP rejects that model; instead, it reverses the divisions by joining tasks together using technology as the uniting force. BPR approach and Traditional approach According to Goksoy, et al. (2012), the present organization approach has substantial limitations. For instance, management of change through planning and control has overpowered the company’s capabilities. These challenges are severe and affects the traditional Hierarchical system from three perspectives namely, competition, customers and the change itself. Presently, customers are overwhelmed with the presence of various products and alternatives. Traditionally, the producer had power over the consumer due to scarcity of suppliers and products. However, this has changed since currently; the consumer has the power over the producer. Customers demand has increased because they believe that, with the presence of technology the producer can give more. In this regard, an innovative producer will use BPR to tailor their products to consumer satisfaction. Competition for the available consumers has mushroomed. As a result, marketers are fine-tuning their products to meet the customer expectation. However, the traditional hierarchical systems are eating away the mass market, thus enticing the global competitors. Goksoy, et al. (2012) posited that, in a market place a good marketer should raise the standard bar for everyone. For instance, a start-up company by use of BPR can out-smart a long established firm that uses hierarchical system to roam the market place. In brief, the modern organizations should be pliable, responsive and innovative and should manage to fulfil its obligation effectively and efficiently. This cannot be achieved by the old Hierarchical system instead by the modern BPR program. BPR approach and TQM approach Presently, most organizations are moving away from the old traditional quality concept, where functions such as audit and inspection were highly considered. The emergence of Total Quality management TQM promised a lot, instead it offered disappointing results too. TQM for the past years criticized by many observed that it did not offer a continuous improvement. On the other hand, some defended TQM approaches arguing that its misapplication blocked organizations from achieving success, but to them it was the right approach. According to Jackson (1997), early 1990 organizations were frustrated by TQM concepts, offering a perfect opportunity for BPR introduction. However, both TQM and BPR had some similarities such as, both were customer oriented and process oriented. In addition, BPR projects are initiated from top-down approach, because workers resistance was obvious due to the radical change. While TQM projects are initiated from top-down and bottom-up at the same time. According to Homa (1995), both approaches have strength and weakness BPR Application To achieve success, most companies are applying BPR to breakthrough huge problems, increase efficiency and reduce operation cost. Case study Rajabion, et al. (2010), conducted a study to assay BPR principles applications into the management processes and functional operations at a Saudi Arabian school. Saudi Arabia still applies the traditional approach system failing to become familiar with the modern technology that can improve the education system effectively. According to Rajabion, et al. (2010), some education centres have realised the importance of BPR and have started trying to implement it. For instance National Education Girls school (NEGS) located in Al-Khobar was trying to enact a new business processes into its operation. The purpose of the study was to provide a functioning BPR model, capable of recognizing issues with the present management system and offer a reengineering resolution that could be used as a reference platform for other similar projects. The principle that Rajabion, et al. (2010) recommended in the study was based on three steps: first step was to study a summary of the NEGS management structure. Second step was to demonstrate NEGS present business process paradigm. The final step was to present a redesigned paradigm of NEGS education and management processes, removing all superfluous and surplus resources and implementing technical solutions. The final stage of the research was to develop a connection paradigm for all processes that could be used as a reference point for Middle East countries. Rajabion, et al. (2010), in their study compared the education system in Middle East countries and the other international schools. They observed that middle east level of education was below average. This is because schools in Saudi Arabian use textbooks, and fail to utilize the available technology. Rajabion, et al. (2010), posited that Saudi Arabian schools, needed to undergo a business process redesign to cope up with the present changing demands and for a better education system. Furthermore, for Saudi Arabian schools to adopt technological change it required a proper infrastructure. In addition, Rajabion, et al. (2010), recommended that both the management and curriculum were to be changed. Conclusively, Rajabion, et al. (2010), observed that the school management was following the traditional systems, for admission processes and register preparation, instead of utilizing the modern technology such as BPR systems to reengineer these old traditional processes. Rajabion, et al. (2010), in their report proposed change for Saudi Arabian schools and other middle east schools still using traditional systems to implement BPR and see how processes can be improve . BPR Researches Re-engineering business research by SSH and funded by European commission The aim of the research was to investigate the choices encircling BRP concepts, its suitability to different national and segmented context. The research further explored how to use BRP to develop long term sustainable economic. The project inspected the several approaches that could be married to BPR. The research involved a multidisciplinary and cross-national investigation by the partnership of research centres. The investigation was based on three reference, how to transfer BPR from US to European firms, transfer of BPR components to both Eastern and Southern Europe and finally implementation of BPR across Europe. In addition, the study was based on studies in different European countries and linguistic regions through a comparative analysis. The outcome of the research was that implementation of BPR changed international focused firms both financially and in the manufacturing sector. The researchers argued that, ‘BPR was strong in rhetoric but weak on the methodology’. To strengthen their argument the researchers demonstrated how consultant agencies and other interested parties used BPR to manipulate companies financially. Observed is that, most consultants standardized BRP and broaden it to manage the command of developing technology and rising competition. In addition the report noted that, communication between academics and consultants on BPR was low because of reduce research and development resources, which are dedicated to products rather than inconsequential services. Research on how to use BRP in improving new strategic direction The research was conducted in 15 US companies to distinguish BRP from other performance improvement alternatives, conditions that force organization to implement BRP and factors that interfere or enhance BRP implementation. The researchers formulated three questions what is BRP? What drives it? What should be understood in designing and implementation of BPR? The outcome of the research was that BRP is in various aspects with underlying appearance causing permanent significance to managers. Conclusively, the researchers posited that, BRP translates the new improvement path into action. They further outlined the need for inter functional connections in organization strategy to be removed because strategy should develop from the start instead of adding up parts. BPR emerging trends It has become clear that BPR is fundamental to any business that focuses on overcoming its competitors. Goksoy, et al. (2012) believes that, managing this initiative can boost organization performance, increase profit, gain market share, improve quality and lower operation costs. A skilful implementation of BPR can make an organization to be faster, flexible and most important gain loyal customers. The present is shifting from a traditional practice to a more analytical and result directed approach. In future, Goksoy, et al. (2012) expects BPR to be more predictable. Currently, business liveliness is the fashion, and it requires a reconfigurable technology, perfectly arranged at the infrastructure level to enhance ample working. Most business practices are heading the web 2.0 direction, this pushes the BPR vendors to research and come up with means on how to support customers. In addition, the BPR vendors should research on how to reduce the complexity in configuring and using the system to reduce the cost companies spend on consultants. Presently more organization is embracing re-engineering and the radical change has become the agenda for most insurance companies, banks and manufacturing companies globally. BPR future Research Areas Research on BPR covers a wide range of area, offering many directions for future research. According Al-Mashari, et al. (2011), presently BPR lacks standardized definitions of terms, and other form of improvements that directly relates to it. Al-Mashari, et al. (2011) further observed that, organization perceptions of BPR concepts and practices has grown negatively, because the ‘process’ has not been fully understood by most organization. In this regard, there is need for further research, which will solicit perception and opinions of both practitioners and academics of BPR terms. In addition, Al-Mashari, et al. (2011) observed that, there is lack of methodological research pattern and variables that can enhance appropriate BPR research. For instance, in the measurement area there is hardships in measuring the prosperity of projects that are not fully completed. According to Earl, et al. (2010), it is hard to see projects incompletely rolled out in BPR, therefore, there is a pushing need for a more developed multi-level measures that can enhance accurate assessment of the efforts. Basically, BPR is a long-term program meant for change, particularly when accepted as a strategic improvement effort. In this regard, a research will be appropriate to study this phenomenon. This approach allows more data collection and enhances complete investigation to be conducted. As a result, more severe evidence will appear. According to Al-Mashari, et al. n.d. (2011), in future researchers should explore how BPR concepts and practice can be integrated with other emerging approaches, like ERP (enterprise resource planning), knowledge management, and Business process management to improve efficiency in the work places. Finally, Electronic Commerce (EC) is rapidly growing; in future, this application will call for a change in business process. Therefore, it will be worth for researchers to explorer and study how EC can be integrated with BPR principles so that the two systems work together. In addition, the researchers need to develop an appropriate paradigm to support the steering through accessing the extent and influence of BPR-IT connected change enterprise. Summary According to traditional approach of organization management, there was no adaptability or flexibility to change. Management used this approach to formulate strict rules to the workers within the organization. However, presently most organizations that have implemented BPR have increased adaptability and flexibility for change. In addition, BPR has created a better working environment, thus resulting to worker satisfaction. Implementation of BPR has resulted into growth of current business as shown in the case studies. Even though BPR is effective in improving efficiency and controlling cost, researchers have proved that its implementation is a hard nut to crack. Workers are very resistant to this form of radical change; therefore, it is essential to have top management support. Nevertheless, full implementation of BPR enhances complete monitoring of processes under the management strict control. As a result, employees produce high quality products to the customers, thus improving efficiency. Conclusion BPR is a redesign of business processes, the structures of the organizations and related systems to achieve a radical improvement in the performance of the business. The organization reasons for making changes could include external competition, emerging opportunities, disintegration of market share and poor financial performance. BPR is the examination and change of five constituents of the business t hat is strategy, processes, technology, organization, and culture. In this regard, BPR is not reorganization, restructuring, automation, or downsizing. It is worth noting that BPR is efficient and attractive however, if not carefully implemented it can be harmful to the health of the organization. Reference Al-Mashari, M., Irani, Z. & Zairi, M., 2011. Business process reengineering: a survey of international experience. Business process Re-engineering, pp. 437-456. Doomun, R. & Jungum, N. V., 2008. Business process modelling, simulation and reengineering: call centres. Business Process Management Journal, 14(6), pp. 838-848. Earl, M. J., Sampler, J. L. & Short, J. E., 2010. Strategies for business process reengineering: Evidence from field studies. Journal of Management Information Systems, 12(1), p. 31. Goksoy, A., Ozsoy, B. & Vayvay, O., 2012. Business Process Reengineering: Strategic Tool for Managing Organizational Change an Application in a Multinational Company. International Journal of Business and Management, 7(2), pp. 89-112. Gonzalez-Benito, J., Martinez-Lorente, A. R. & Dale, B. G., 1999. Business process re-engineering to total quality management An examination of the issues. Business And Economics--Management, 5(4), p. 345. Homa, P., 1995. Business process re-engineering Theory- and evidence-based practice. Business Process Re-Engineering & Management Journal, 1(3), p. 10. Innovation, R. a., 2002. Process Re-Engineering in Europe: Choice, People and Technology, s.l.: s.n. Jackson, N., 1997. Business Process Re-engineering. Business And Economics--Labor And Industrial Relations, 41(2), pp. 34-36. Martin, I. & Cheung, Y., 2005. Business process re-engineering pays after enterprise resource planning. Business And Economics--Management, 11(2), pp. 185-197. Maull, R. S. et al., 1995. Current issues in business process re-engineering. International Journal of Operations & Production Management, 15(11), p. 17. Paper, D., 1997. The value of creativity in business process re-engineering. Business Process Management Journal, 3(3), p. 218. Rajabion, L. et al., 2010. Business Process Re Design In Educational Institutes In Middle Eastern Countries: Case Study. Issues of Information Systems, 11(1), pp. 364-368. Read More