One way to dramatically improve the performance of a company is to fundamentally redesign all of its processes. The aim of this paper is to explain the concept of reengineering, give an overview of the related literature, and point out its financial aspects. This$process$is$called. PDF | 2+ hours read | This study was conducted with the aim to collect Business Process Reengineering (BPR) is not an unknown word to the. Business process reengineering (BPR) has been receiving attention from industries as [Reengineering is] the fundamental rethinking and radical redesign of.
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The nature of business process re-engineering. Is BPR a new concept? What are business processes? Theoretical framework for. Business Process Reengineering is a management approach aiming at improvements by increasing efficiency and effectiveness of processes: 1) Within public. and in 90's the concept of Business Process Reengineering (BPR) gained recognition as an innovation process in US companies to face the competitiveness.
In that halcyon period of expansion, the main concern was growing fast without going broke, so businesses focused on cost, growth, and control. And since literate, entry-level people were abundant but well-educated professionals hard to come by, the control systems funneled information up the hierarchy to the few who presumably knew what to do with it.
Conventional process structures are fragmented and piecemeal, and they lack the integration necessary to maintain quality and service. They are breeding grounds for tunnel vision, as people tend to substitute the narrow goals of their particular department for the larger goals of the process as a whole.
When work is handed off from person to person and unit to unit, delays and errors are inevitable. Accountability blurs, and critical issues fall between the cracks. Moreover, no one sees enough of the big picture to be able to respond quickly to new situations. Managers have tried to adapt their processes to new circumstances, but usually in ways that just create more problems.
If, say, customer service is poor, they create a mechanism to deliver service but overlay it on the existing organization. Bureaucracy thickens, costs rise, and enterprising competitors gain market share. In reengineering, managers break loose from outmoded business processes and the design principles underlying them and create new ones.
Ford discovered that reengineering only the accounts payable department was futile. The appropriate focus of the effort was what might be called the goods acquisition process, which included downloading and receiving as well as accounts payable.
One way to ensure that reengineering has a cross-functional perspective is to assemble a team that represents the functional units involved in the process being reengineered and all the units that depend on it. The team must analyze and scrutinize the existing process until it really understands what the process is trying to accomplish.
The point is not to learn what happens to form 73B in its peregrinations through the company but to understand the purpose of having form 73B in the first place.
Rather than looking for opportunities to improve the current process, the team should determine which of its steps really add value and search for new ways to achieve the result.
Business Process Reengineering
The reengineering team must keep asking Why? Is it a control mechanism or a decision point? Raising and resolving heretical questions can separate what is fundamental to the process from what is superficial.
The regional offices of an East Coast insurance company had long produced a series of reports that they regularly sent to the home office.
No one in the field realized that these reports were simply filed and never used. The process outlasted the circumstances that had created the need for it. The reengineering study team should push to discover situations like this.
In short, a reengineering effort strives for dramatic levels of improvement. It must break away from conventional wisdom and the constraints of organizational boundaries and should be broad and cross-functional in scope.
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It should use information technology not to automate an existing process but to enable a new one. Principles of Reengineering Creating new rules tailored to the modern environment ultimately requires a new conceptualization of the business process—which comes down to someone having a great idea.
But reengineering need not be haphazard. In fact, some of the principles that companies have already discovered while reengineering their business processes can help jump start the effort for others.
Organize around outcomes, not tasks. This principle says to have one person perform all the steps in a process. The redesign at Mutual Benefit Life, where individual case managers perform the entire application approval process, is the quintessential example of this. The redesign of an electronics company is another example. It had separate organizations performing each of the five steps between selling and installing the equipment. One group determined customer requirements, another translated those requirements into internal product codes, a third conveyed that information to various plants and warehouses, a fourth received and assembled the components, and a fifth delivered and installed the equipment.
The process was based on the centuries-old notion of specialized labor and on the limitations inherent in paper files.
The departments each possessed a specific set of skills, and only one department at a time could do its work. The customer order moved systematically from step to step. But this sequential processing caused problems. In addition, the many handoffs were responsible for numerous errors and misunderstandings. Finally, any questions about customer requirements that arose late in the process had to be referred back to the people doing step one, resulting in delay and rework. When the company reengineered, it eliminated the assembly-line approach.
The customer service rep expedites and coordinates the process, much like a general contractor.
Business process reengineering and information systems renovation projects : problem and assessment
And the customer has just one contact, who always knows the status of the order. Many of our procedures were not designed at all; they just happened. Smith improvised. Time passed, the business grew, and Smith hired his entire clan to help him cope with the work volume.
They all improvised. Each day brought new challenges and special cases, and the staff adjusted its work accordingly. The hodgepodge of special cases and quick fixes was passed from one generation of workers to the next. We have institutionalized the ad hoc and enshrined the temporary.
Why do we send foreign accounts to the corner desk? Because 20 years ago, Mary spoke French and Mary had the corner desk. Today Mary is long gone, and we not longer do business in France, but we still send foreign accounts to the corner desk. Since then, warehousing costs have escalated, components have become less expensive, and better forecasting techniques have minimized units in inventory.
But the inventory procedures, alas, are the same as always. Of the business processes that were designed, most took their present forms in the s.
The goal then was to check overambitious growth—much as the typewriter keyboard was designed to slow typists who would otherwise jam the keys. It is no accident that organizations stifle innovation and creativity.
Nearly all of our processes originated before the advent of modern computer and communications technology.
Have those who use the output of the process perform the process. In an effort to capitalize on the benefits of specialization and scale, many organizations established specialized departments to handle specialized processes.
Accounting does only accounting. If it needs new pencils, it goes to the downloading department, the group specially equipped with the information and expertise to perform that role.
downloading finds vendors, negotiates price, places the order, inspects the goods, and pays the invoice—and eventually the accountants get their pencils. Now that computer-based data and expertise are more readily available, departments, units, and individuals can do more for themselves. Opportunities exist to reengineer processes so that the individuals who need the result of a process can do it themselves.
For example, by using expert systems and databases, departments can make their own downloads without sacrificing the benefits of specialized downloadrs. One manufacturer has reengineered its downloading process along just these lines. The new process compresses the download of sundry items and pushes it on to the customers of the process. Using a database of approved vendors, an operating unit can directly place an order with a vendor and charge it on a bank credit card.
At the end of the month, the bank gives the manufacturer a tape of all credit card transactions, which the company runs against its internal accounting system. When an electronics equipment manufacturer reengineered its field service process, it pushed some of the steps of the process on to its customers. Now customers make simple repairs themselves. If the problem appears to be something the customer can fix, the diagnostician tells the customer what part to replace and how to install it. The old part is picked up and a new part left in its place at a later time.
Only for complex problems is a service technician dispatched to the site, this time without having to make a stop at the warehouse to pick up parts.
When the people closest to the process perform it, there is little need for the overhead associated with managing it. Interfaces and liaisons can be eliminated, as can the mechanisms used to coordinate those who perform the process with those who use it. Journal list menu Journal. Business Change and Re-engineering. Online ISSN: Abstract PDF Request permissions.
Survey and Comparison S. Sockalingam A. Doswell Business Change and Re-engineering Pages: The Virtual Business: These are vital factors that contribute to building an effective IT infrastructure for business processes.
An effective IT infrastructure composition process follows a top-down approach, beginning with business strategy and IS strategy and passing through designs of data, systems, and computer architecture. IT strategic alignment is approached through the process of integration between business and IT strategies, as well as between IT and organizational infrastructures.
Walmart, for example, would not have been able to reengineer the processes used to procure and distribute mass-market retail goods without IT. Ford was able to decrease its headcount in the procurement department by 75 percent by using IT in conjunction with BPR, in another well-known example. This, in turn, is determined by the types of activities embedded in a business process, and their sequencing and reliance on other organizational processes.
As a result, there are many factors that prevent the effective implementation of BPR and hence restrict innovation and continuous improvement. Change management , which involves all human and social related changes and cultural adjustment techniques needed by management to facilitate the insertion of newly designed processes and structures into working practice and to deal effectively with resistance, is considered by many researchers to be a crucial component of any BPR effort.
One of the most overlooked obstacles to successful BPR project implementation is resistance from those whom implementers believe will benefit the most.
Most projects underestimate the cultural effect of major process and structural change and as a result, do not achieve the full potential of their change effort. Many people fail to understand that change is not an event, but rather a management technique. Change management is the discipline of managing change as a process, with due consideration that employees are people, not programmable machines.
An important step towards any successful reengineering effort is to convey an understanding of the necessity for change. Organizational culture is a determining factor in successful BPR implementation. Culture in an organization is a self-reinforcing set of beliefs, attitudes, and behavior.
Culture is one of the most resistant elements of organizational behavior and is extremely difficult to change. BPR must consider current culture in order to change these beliefs, attitudes, and behaviors effectively.
Messages conveyed from management in an organization continually enforce current culture. Change is implicitly driven by motivation which is fueled by the recognition of the need for change. The first step towards any successful transformation effort is to convey an understanding of the necessity for change. Implementing BPR successfully is dependent on how thoroughly management conveys the new cultural messages to the organization. People should be the focus for any successful business change.
BPR is not a recipe for successful business transformation if it focuses on only computer technology and process redesign. In fact, many BPR projects have failed because they did not recognize the importance of the human element in implementing BPR.
Understanding the people in organizations, the current company culture, motivation, leadership, and past performance is essential to recognize, understand, and integrate into the vision and implementation of BPR. If the human element is given equal or greater emphasis in BPR, the odds of successful business transformation increase substantially. It is essential that the automation infrastructure of the BPR activity provides for performance measurements in order to support continuous improvements.
It will need to efficiently capture appropriate data and allow access to appropriate individuals. To ensure that the process generates the desired benefits, it must be tested before it is deployed to the end users.
If it does not perform satisfactorily, more time should be taken to modify the process until it does. A fundamental concept for quality practitioners is the use of feedback loops at every step of the process and an environment that encourages constant evaluation of results and individual efforts to improve.
This will also contribute to a continuous risk assessment and evaluation which are needed throughout the implementation process to deal with any risks at their initial state and to ensure the success of the reengineering efforts.They should make their point clear to the process implementation team. If they matched, the department issued payment. It should use information technology not to automate an existing process but to enable a new one.
The new principle suggests that the people who do the work should make the decisions and that the process itself can have built-in controls.
The entire hierarchical management structure is built on this assumption.
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