Business Process Re-Engineering, commonly referred to as BPR, is a process of radically redefining operations and designs of operations with an organization. It does not only mean changes in the system; it includes drastic modifications and improvements in the business procedures.
Business Process Re-Engineering is a massive need of the hour, given the dynamic circumstances, and ever-evolving global emerging trends of business dealings.
In the year 1990, a professor of Massachusetts Institute of Technology named Michael Hammer wrote an article in the Harvard Business Review, titled- “Reengineering Work: Don’t Automate, Obliterate”. In the matter he highlighted the importance of eradicating work processes and personnel that do enhance the value, quality or utility of the outcome. Futile efforts must not be taken to automate such superfluous work flows.
This article brought to light a major issue of manages, and decisions makers paying attention on the wrong aspect of enterprise.
Well known management experts like Peter Ducker also advocated the use of business process reengineering to gain requires outcomes.
To get deeper comprehension of BPR, certain basics need to be stated first.
A process is a series of steps, to be followed in a sequence to achieve desired results. Business Processes comprises of collection of associated activities to create a valuable outcome for the consumer.
Generally various functionaries and departments work simultaneously and in synergy to maintain the workflow of an organization. Interconnected operations pool together to provide the framework for improving the presentation of an entity.
Some processes of a corporation are more essential due to the virtue of its nature and impact. These are called as ‘Core Processes’. They are strategically important processes that increase the utility value of the final output. They enable with an assured level of activity to the business that helps in sustainability.
Identification of core processes and its apt control has the below stated leads:
· Identification of internal controls
· Grasp of external environment
· Upgradation to global trends
· Gaining an edge in the competitive market
· Greater share in the market
· Operational efficiency and effectiveness
Business Process Reengineering emphasizes on analytical processes. It brings to the limelight the necessity for avant-garde, unconventional and advanced ideas along with designs. It is a path breaking approach to overcome challenges and ultimately experience a breakthrough.
Technological advances, especially informational technology has is a vital for transformation of entities into macro business units. Information technology gives access to rapidity, promptness, precision, flexibility and assimilation.
Technology surpasses the boundaries of distance and time and gives magnified view to the globe.
A core business process generates worth by the competencies it provides to the competitiveness. Core processes are vital for business to achieve great heights in the industry by creating a competitive edge.
To identify the core process, following characteristics should be present in the process:
i. High tactical benefit is provided due to implementation of these processes
ii. The beginning and the end of the process is its end-users
iii. Changes in these processes have direct drastic effect on the outcome
iv. Important success factor
v. To overcome the problem of one department flourishing at the expense of another
vi. Skill development to present world class employees
vii. Proper construction of infrastructure in terms of technology.
Some examples of core processes are Order to Cash (O2C), Procure to Pay (P2P), Acquire to Retire, Plan to Produce, Market to Order etc.
Ø Order to Cash (O2C): This is a core process that contains receiving and fulfilling customer orders for goods and/or services. Multiple sub-processes under O2C are:
Customer Order, Order Fulfilment, Invoicing and accurate Accounting.
Ø Procure to Pay (P2P): This is a core process involving procurement of raw material from suppliers, evaluating quotations, and payment procedures.
Ø Acquire to Retire: Managing and directing fixed assets from its acquisition to its receival, with application of replacement processes is included in this core process.
Ø Market to Order: This type of core process majorly focuses on sales and marketing related activities like promotion, product development, pricing decisions, distribution channels, product differentiation etc.
It is important to note that core processes are not constant and vary and keep evolving with time.
The aim of Business Process Reengineering is to identify these core processes to achieve distinction and superiority. Though in theory the concept sounds simple, its application is easier said than done. Segmentation of work personnel, unsystematic leadership styles, lack of innovation and motivation the employees, etc. along with division of work, with each division only concerned about their own narrow objectives makes Business process engineering a humongous task to put into effect.
Moreover, the application of information technology into stringent and redundant traditional means of doing business is very difficult. Complete automation of work with all operations and processes requires a lot of time and investment.
In fact, for many organizations on the stage of decline the only opportunity to turnaround is via business process re-engineering.
Business Process Re-engineering is starting right from the beginning, that is, from square one all over again, hence it’s a very costly process.
Strategy and planning are a pre-requisite for BPR. It takes into consideration various elements of the enterprise like management level (top, middle and functional), distribution of work, existence and application of information technology, collaboration of personnel (Human resource training, development, rewards and compensation) and so on.
An easy to apply guide suggested by Bhudeb Chakravarti to implement Business Process Re-Engineering is ‘INSPIRE’.
Step I- Initiate
Step II- Negotiate
Step III- Select
Step IV- Plan
Step V- Investigate
Step VI- Redesign
Step VII- Ensure
· Initiation refers to the building of a new framework for commencement of the reengineering process. The scope of re-engineering must be defined thoroughly. The end-result or the goal from this process must also be stated.
· Negotiations between the analyst and top management regarding further plan of action. Also, the demands of consumers prevalent in the market shall be carefully studied. The purpose is to increase the benefits of the users.
· Selection of the significant methods that require modifications is the third step. To select correctly, prevalent processes must be first comprehended.
· Laying out the plan to implement re-engineering includes formulation of various alternative plans to select from.
· Investigation of existing problems and various control systems.
· Redesigning of the strategies and processes to get desired results. It is the dual accountability of engineers, designers and management to get desired outcomes.
· Ensuring that affirmative responses are achieved as well as monitoring and controlling any deviations from the expected results.
Re-engineering involves complex undertaking and knowledge of many experts in various fields. It is also a psychological play as until the employees and entire workforce will not accept and co-operate, re-engineering will not be possible. The whole organization must be committed towards changes being brought out in the entity. This requires strong leadership attributes to be creative in convincing and molding employees towards the changes.
Business Process Re-engineering does not directly involve technology upgradations in the initial stages. First, re-engineering begins with elementary business analysis and revamping the philosophies and ideologies of the corporation.
Clear reasons must be stated for re-engineering. Without any assumptions and pre-conceived notion, the re-engineering analysts must decide what to do.
All obsolete practices must be eliminated without any bias. Before initiating any changes, the analysts should reach to the root of the problem.
Far reaching and profound ideas to revamp the structure of the business must be introduced. Focus shall be greatly on new changes and inventions rather than just amendment. Marginal expansion and development shall be achieved through Business Process Re-engineering.
BPR is crucial to accelerate revenues and have a strong foot holding in the market by having an upper hand over the competitors. This can be only achieved be reduction in total cycle time of business process. Business process re-engineering is a continuous and never-ending process.
In conclusion, information technology is the central crux of business process re-engineering which includes elements like core process to bring customer satisfaction along with high revenues.