Konosuke Matsushita, Matsushita Electric Industrial Company. According to Mr. Matsushita, for any organisation well-defined Business Process thoroughly in ...
Business Process Re-engineering – An Effective Management Tool By: Tirthankar Roy “Business is now so complex and difficult, the survival of firms so hazardous in an environment increasingly competitive and fraught with danger, that their continued existence depends on the day-to-day operations of Business Process and mobilization of every ounce of intelligence.” Konosuke Matsushita, Matsushita Electric Industrial Company According to Mr. Matsushita, for any organisation well-defined Business Process thoroughly in place is paramount in order to gain competitive advantage. The 3 Cs behind re-engineering are: •
Customer
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Competition and
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Change
The present era of “knowledgeable customers” demand service of the highest order. Any compromise on the service rendered would mean loss of valuable clientele for the organisation. “Competition” which at one point of time was restricted by geographical boundaries has now become global and fierce. Each and every player in the market is required to fight that much harder to sustain and grow. The pace of “change” today is like never before and the rate at which such changes are happening is phenomenal. It indeed is true that only one thing which is constant is “change”. What is Business Process Re-engineering? “Business Process Re-engineering (BPR) is the fundamental rethinking and the radical redesign of business processes to bring about dramatic improvements in performance” Hammer and Champy (1993). Every single process in an organisation is a critical function and the success or otherwise of an organisation depends largely on how well such “Processes” function. BPR is not about making marginal improvements but involves significant progress in redesigning existing business processes and functions. According to Prof. M. Senge majority of ‘system’ failure is due to the ineffectiveness of the ‘system’
itself, rather than the people who run those systems. Hence setting right the ‘systems’ is absolutely essential and BPR is an effective tool in achieving it. Thus, BPR is aimed at streamlining operations, reducing cost and process duration which in turn ensures increased revenue, better co-ordination and management of functional interdependencies, quality enhancement and above all upgrading the level of employee knowledge and skill. The applicability of BPR in day-to-day activities across organizations has also increased its importance manifold. Integration of BPR and IT In the modern world, effective use of information and communication technology has become a critical success factor. Firms achieve competitive advantage by leveraging their IT services. Though not a solution in itself, IT facilitates the BPR process that allows organizations to do away with their existing set of rules and create new re-engineered processes. Thus, BPR projects should revolve around IT specifically Internet and Intranet. Internet and Intranet technology can be effectively used in BPR projects as they are cost effective, compatible and help in easily obtaining required information by bridging the communication gap. The cost efficiency is reflected through faster and easier access to reliable data, quicker processing of these data and thereby leading to better output both in terms of quality and quantity. This in turn makes the firms more competitive and puts them on a rapid growth path. As IT enabled BPR continues to upgrade business processes and enhance productivity, the organisation should also simultaneously modify itself in order to adapt to such changing environment. Critical parameters, which could transform an organisation from an industrial organisation to a knowledge organisation, are organisation culture; employee skill sets, resource management and most importantly change management.
BPR – A Strategy A basic pre-requisite for any BPR activity is innovative thinking. An innovative BPR strategy is one, which provides an innovative organisational environment duly complimented by top management sponsorship, strategic alignment with overall business objectives, scope of cross-functionality and inter disciplinary activity and an absolute customer focus. To secure and sustain competitive advantage continuous innovation is a must. The mantra in the age of globalization is “innovate or perish”. But there has been a paradigm shift in the manner in which organizations innovate these days. The new paradigm is based on combining inter-disciplinary activities with an emphasis on continuous improvement with adequate flexibility. According to Hammer and Champy a successful BPR implementation is one that yields expected improvements in productivity and quality. The success of any BPR implementation can be measured based on the following parameters such as: •
Process time reduction
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Process Cost reduction
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Quality output
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Employee adaptability to the new process
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Responsiveness to customer needs
According to Manganelli and Klein, the pre-requisites of a successful BPR implementation involves the following – •
Preparation of the overall BPR plan with focus on level of organizational commitment, well defined project goals, composition of the BPR team and the required skill sets of the team members.
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Identification of key business processes with special mention of the operational bottlenecks and the time frame for re-engineering the processes.
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Breaking down each business process into sub processes, activities and steps highlighting the work flow through each process and the quantum of resource allocated at each stage.
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Providing technical solutions i.e. assessing the required technical resources and technologies needed in the reengineered process
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Manpower planning and resistance management
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Monitoring the progress with a detailed feed back system
Though BPR is clearly an on-going process critical to an organization’s success, it is not free from certain pitfalls. Some of the most commonly viewed drawbacks of BPR are – •
Over spending on technological upgradation without giving much thought to the organisation’s underlying business process.
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Delegating the task of reengineering to an outside consulting firm who have very little or no knowledge of reengineering business processes
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Inability to identify key business processes and operational bottlenecks.
Reports suggest that almost 50 – 70 % of BPR projects do not achieve the desired goal of achieving breakthrough performances. The main reasons attributed to the failure are lack of understanding and knowledge of the people who undertake the entire exercise. Such mistakes are however avoidable. Despite its drawbacks, BPR is one of the techniques, which the Indian corporate sector has not yet utilized to its full potential. There have been not many cases of BPR implementation by Indian corporates. But with globalization at its full bloom, it seems absolutely necessary for organisations to undertake the BPR process to gain competitive advantage.
