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Business Process Reengineering

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OBJECTIVETo understand the foundation of business processes, the groundwork of business

process reengineering and the role IT in business process reengineering.

ROAD MAP

I. Business Processa. Definitionb. Business Process Improvement

II. Business Process Reengineeringa. What?b. Whyc. When?d. Who?e. How?f. Advantages and Benefits of BPRg. Critiques about BPR

III. The Role of ITa. Relationship between IT and BPRb. Role of IT in Reengineeringc. Importance of ITd. Role of CIOse. Future Role of IT in BPR

IV. Application of BPR

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I. BUSINESS PROCESS

a. DEFINITION"If you have ever waited in line at the grocery store, you can appreciate the need for

process improvement. In this case, the "process" is called the check-out process, and the purpose of the process is to pay for and bag your groceries. The process begins with you stepping into line, and ends with you receiving your receipt and leaving the store. You are the customer (you have the money and you have come to buy food), and the store is the supplier

The process steps are the activities that you and the store personnel do to complete the transaction. In this simple example, we have described a business process. Imagine other business processes: ordering clothes from mail order companies, requesting new telephone service from your telephone company, developing new products, administering the social security process, building a new home, etc.

Business processes are simply a set of activities that transform a set of inputs into a set of outputs (goods or services) for another person or process using people and tools. We all do them, and at one time or another play the role of customer or supplier.

You may see business processes pictured as a set of triangles as shown below. The purpose of this model is to define the supplier and process inputs, your process, and the customer and associated outputs. Also shown is the feedback loop from customers.”

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b. BUSINESS PROCESS IMPROVEMENT“Improving business processes is paramount for businesses to stay competitive in

today's marketplace. Over the last 10 to 15 years companies have been forced to improve their business processes because we, as customers, are demanding better and better products and services. And if we do not receive what we want from one supplier, we have many others to choose from (hence the competitive issue for businesses). Many companies began business process improvement with a continuous improvement model. This model attempts to understand and measure the current process, and make performance improvements accordingly.

The figure below illustrates the basic steps. You begin by documenting what you do today, establish some way to measure the process based on what the customers want, do the process, measure the results, and then identify improvement opportunities based on the data you collected. You then implement process improvements, and measure the performance of the new process. This loop repeats over and over again, and is called continuous process improvement. You might also hear it called business process improvement, functional process improvement, etc.

This method for improving business processes is effective to obtain gradual, incremental improvement. However, over the last 10 years several factors have accelerated the need to improve business processes. The most obvious is technology. New technologies (like the Internet) are rapidly bringing new capabilities to businesses, thereby raising the competitive bar and the need to improve business processes dramatically. Organization & Markets Business Process Reengineering

Another apparent trend is the opening of world markets and increased free trade. Such changes bring more companies into the marketplace, and competing becomes harder and harder. In today's marketplace, major changes are required to just stay even. It has become a matter of survival for most companies.

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As a result, companies have sought out methods for faster business process improvement. Moreover, companies want breakthrough performance changes, not just incremental changes, and they want it now. Because the rate of change has increased for everyone, few businesses can afford a slow change process. One approach for rapid change and dramatic improvement that has emerged is Business Process Reengineering (BPR)." 1

II. THE “FOUR Ws and H” OF BUSINESS PROCESS REENGINEERING

a. WHAT?

What is Business Process Reengineering?

“Reengineering is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance such as cost, quality, service and speed.”

- Michael Hammer

Business Process Reengineering allows alignment of customer needs with organizational processes through a process design that results in cost reduction, productivity improvement, and profitability among others.

Reengineering is process design, process management, and process innovation. Reengineering involves revising organizational processes. It means designing the core business process instead of analyzing the current one. It involves reconfiguration of work to serve customers better. Reengineering forces us to challenge the way that organizations are run and to redesign the organizations around the desired outcomes rather than functions or departments. Reengineering forces a new way of thinking. Peter Drucker states, ‘‘Every organization has to prepare for the abandonment of everything it does.’’ The old way of managing, the vertical organizations, the promotion and compensation schemes, and the whole decision making schemes no longer work.

Reengineering is not cheap. It is a challenging process that will require hard work by both management and employees. Reengineering is a powerful tool for creating seamless organizations.

1 BPR Online Learning Center: http://www.prosci.com/intro.htm

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Hammer,M., Champy.J., (1993), Reengineering the Corporation: A Manifesto for Business Revolution., Harper, Collins, London.

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Characteristics and Features of Reengineering

1) It is process centered.

2) It is redesign governed.

3) It is radical.

4) It is dramatic.

5) It is customer oriented.

Tenets of Reengineering

1) The customer alone is responsible for defining what constitutes product/service value.

Therefore reengineering should focus on activities/processes which adds value to the

customers

2) Significant improvements in cycle time, process costs and/or customer satisfaction are key

indices of process reengineering projects.

3) Senior management must be involved throughout the process of reengineering.

4) Communication and trust are a must.

What Business Process Reengineering is Not

The concept of Reengineering is a widely misunderstood concept. Those who label any organizational change as reengineering have victimized it. Lack of understanding of the concept and inappropriate application will all contribute to organizations’ failure to appreciate the promise of reengineering.

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Reengineering eliminates work, not jobs or peopleDownsizingReengineering is concerned with how work is done, not how an organization is restructuredRestructuringReengineering enables new process design, rather than providing new mechanisms for performing old onesAutomationReengineering is a revolutionMore of the same

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However, Business Process Reengineering should not replace TQM or other organizational initiatives. In fact without a continuous improvement process, reengineering cannot be successful.

What to Reengineer?

According to many in the Business Process Reengineering field, reengineering should focus on processes and not be limited to thinking about the organization. After all, an organization is only as effective as its processes.

So companies that are currently used to talking in terms of departments such as marketing and manufacturing must switch to giving names to the processes that they do such that they express the beginning and end states. These names should imply all the work that gets done between the start and finish. For example, order fulfillment can be called order to payment process

Most Popular Best Practices in Business Process Design 2

1) Task elimination Eliminate unnecessary tasks from a business process.

2) Task composition Combine small tasks into composite tasks and divide large tasks into workable smaller tasks

3) Integral Technology Try to elevate physical constraints in a business process by applying new technology

4) Empower Give workers most of the decision-making authority and reduce middle management

5) Order assignment Let workers perform as many steps as possible for single orders

6) Re-sequencing Move tasks to more appropriate places

7) Specialist-Generalist Consider to make resources more specialized or more generalist

8) Integration Consider the integration with a business process of the customer or a supplier

9) Parallelism Consider whether tasks may be executed in parallel

10) Numerical Involvement Minimize the number of departments, groups and persons involved in a business process

2 BEST PRACTICES IN BUSINESS PROCESS REDESIGN: SURVEYRESULTS AMONGST DUTCH AND UK CONSULTANTS

S. Limam Mansar1 and H. A. Reijers21Department of Computing, Communications Technology and Mathematics, London MetropolitanUniversity, Eden Grove, Holloway Road, N7 8DB, London, UK.2Department of Technology Management, Eindhoven University of Technology, PAV. D14. P.O. Box 513, NL-5600 MB. Eindhoven, The Netherlands

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b. WHY?

Why is there a need for Business Process Reengineering?

We live in a world that is increasingly driven by the three C’s:

1) Customers take charge .a. Mass market vs. “Market of one”

- Companies trying to satisfy an entire market which is full of customers with different needs using a uniform product offer versus companies achieving a level of customization and customer service at which a customer feels that he or she is an exclusive or preferred customer of the firm.

b. Informed Consumers- Customers are likely to know what they need and want, having read information of

products and services. The informed consumer buys with confidence, avoids overpaying, and avoids costly errors in judgement.

2) Competition intensifies .a. Diverse and constantly increasing b. Bigger is not betterc. Technology changes the nature of competition

3) Change is constant .a. More environment scanning

- Studies and interpretations of the political, economic, social, and technological events which influence a business, an industry, or even a total market.

b. Reduced product life cycles

c. WHEN?

When is Business Process Reengineering necessary?

BPR involves the total creative rethinking of one or more of a company’s key business processes. No business assumption or organizational structure is immune. These structures evolve during a time when consumer markets are less competitive and access to information is controlled by centralized Information Systems (IS) departments using technology obsolete. Often this rethinking is prompted by an existing or looming crisis.

If companies wish to achieve any of the following:

Higher order magnitudes of improvements in revenues, profits, productivity, cycle time and efficiency

Regain competitive advantage Reduce cost and cycle times

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Improve quality Universal need Competition Environmental demands Changing business landscapes Technological advancements Sinking profitability and market share Declining share price

d. WHO?

Who are the key players in Business Process Reengineering?

Individuals Management and Roles3

Sponsor- Executive responsibility over all parts of the

organization that need to be changed.- Provide leadership so as to give vision and

direction to the Project Team.

Project Manager- Ability to provide resources as needed for

the project.- Has final say on determining the

membership of the Project Team.

Project Administrator- Leader in the effort to define, understand

and measure the process.

Project Team- Composed of managers and employees

from each of the potentially affected functional/divisional area

Top Management- Initiator- Supporter- Champion

Functional Executives- Supporter- Communicator

IS Executives- Coordinator- Facilitator

External Consultants- Facilitator- Coordinator

3 A SURVEY OF BUSINESS PROCESS REENGINEERING PRACTICES IN SINGAPOREC. Ranganathana, Jasbir S. Dhaliwalb,University of Illinois, Chicago, IL, USADepartment of Technology Management, Norwegian School of Management,Elias Smiths vei 15, P.O. Box 580, 1302 Sandvika, NorwayReceived 1 November 1998; received in revised form 1 October 1999; accepted 22 December 2000

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e. HOW?

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STEP 1. Prepare for Business Process Reengineering

“If you fail to plan, you plan to fail.”

Ask the question, “Is business process reengineering necessary?”

Develop of executive consensus on the importance of reengineering

Develop link between breakthrough business goals and reengineering projects

Build a cross-functional team

Establish strategic goals for the reengineering effort

Identify customer driven objectives and process gaps that fail to meet such objectives

Formulate the vision/mission and strategic purpose

Create desired culture

STEP 2. Map and Analyze “As-Is” Process

Map existing processes first, then analyze and improve on it to design new processes

Identify disconnects that prevent processes from achieving desired results

Identify value-adding processes

Create activity/process models

Simulate and perform Activity Based Costing (ABC)

STEP 3. Design “To-Be” Process

Produce one or more alternatives to the current processes which satisfy the goals

Benchmark current processes with those relevant peer organizations

Develop “To-Be” models using the various modelling methods available

Validate “To-Be” processes by means of Activity Based Costing (ABC)

Perform Trade Off Analysis to select best possible “To-Be” scenarios

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STEP 4. Implement Reengineered Processes

Evolve implementation plan

Prototype and simulate transition plans

Initiate training programs

Implement transition plan

STEP 5. Continuous Improvement

Initiate on-going measurement

Review performance against target

Improve process continuously

f. ADVANTAGES AND BENEFITS OF BPR

“Even well established management thinkers, such as Peter Drucker and Tom Peters, were accepting and advocating BPR as a new tool for (re-)achieving success in a dynamic world [. During the following years, a fast growing number of publications, books as well as journal articles, were dedicated to BPR, and many consulting firms embarked on this trend and developed BPR methods. However, the critics were fast to claim that BPR was a way to dehumanize the work place, increase managerial control, and to justify downsizing, i.e. major reductions of the work force, and a rebirth ofTaylorism under a different label.

Despite this critique, reengineering was adopted at an accelerating pace and by 1993, as many as 65% of the Fortune 500 companies claimed to either have initiated reengineering efforts, or to have plans to do so. This trend was fueled by the fast adoption of BPR by the consulting industry, but also by the study Made in America conducted by MIT, that showed how companies in many US industries had lagged behind their foreign counterparts in terms of competitiveness, time-to-market and productivity.”4

Advantages

4 Business Process Reengineering, Wikipedia; History section: http://en.wikipedia.org/wiki/Business_process_reengineering

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Benefits of BPR

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Satisfaction

A big advantage of reengineering is that the work becomes more satisfying because the workers get a greater sense of completion, closure, and accomplishment from their jobs. The employee performs a whole job, a process or a subprocess, that by definition produces a result that somebody cares about. The workers not only try to keep the boss happy or to work through the bureaucracy. More important is the fact to satisfy the customer needs.

Growth Knowledge

Furthermore, the personal development within a process team environment does not play such an important role which means climbing up the hierachy is a minor goal. In this case it is much more important to get a widespread knowledge of the whole process and there are no such things as "mastering" a job; as a worker's expertise and experience grow, his or her job grows with it.

Solidarity to the Company

"Moreover, since workers in a reengineered process spend more time on value adding work and less time on work that adds no value, their contributions to the company increase, and, consequently, jobs in a reengineered environment will on the whole be more highly compensated.

Demanding Jobs

There is, however, a challenging side to all this good news about work in a reengineered environment. If jobs are more satisfying, they are also more challenging and difficult. Much of the old, routined work is eliminated or automated. If the old model was simple tasks for simple people, the new one is complex jobs for smart people, which raises the bar for entry into the workforce. Few simple, routine, unskilled jobs are to be found in a reengineered environment.This fact that the jobs are more demanding can be either an advantage or a disadvantage. It depends on the view from where you consider it. Unskilled employees might get difficulties to get along with the process changings. Some people are just not able to perform several tasks. For such persons it will be probably difficult to survive within this new environment which mostly leads to a personal failure in their job.

Authority

In a traditional oriented company, the management expects from the employees that they follow some specific rules. In contrast to that the reengineered companies don´t want employees who can follow rules; they want people who will make their own rules. As management invests teams with the responsibility of completing an entire process, it must also give them the authority to make the decisions needed to get it done.

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Business Process Reengineering (BPR) can be defined as the elemental rethinking and radical redesigning of the business processes in order to achieve remarkable improvements in critical measures of performance like cost, service, quality, and speed. An organization where application of BPR is being done, is process -oriented, where all processes are identified and given specific names. Each individual is aware of the particular process in which he or she is involved and complete process measurement such as monitoring and control is performed. Business Process Reengineering or BPR is also known by other names like Business Process Redesign, Business Process Change Management or Business Transformation. BPR brings numerous benefits to organizations and companies in which it is implemented. Some of the common benefits of BPR are:

Although BPR is very effective in controlling cost and improving efficiency, its implementation is a hard nut to crack. Employees are very resistant to this kind of change thus, it is important to have

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Increase Effectiveness

As all employees are aware of the processes to which they belong , they have a greater sense of responsibility. All processes are completely monitored under the strict control of the management. The net result of this is that employees deliver high quality products to their customers.

Helps to improve efficiency

Proper management and control of all business processes reduces the time lag between different processes, which otherwise is quite high causing delays. This in turn reduces the time to market the product to the target customers and gives quicker response to buyers.

Reduces Cost

With the proper management of processes, improved efficiency and quick delivery of products to the buyers ,the overall product costs are reduced resulting in cost saving for the organization in the long run.

Meaningful job for Employess

As the time lag of product processing between different departments gets reduced due to the application of business process reengineering, there are more meaningful tasks to be performed by employees. This leads to increase their levels of motivation and the desire to perform well.

Improvement in Organizational Approach

As the time lag of product processing between different departments gets reduced due to the application of business process reengineering, there are more meaningful tasks to be performed by employees. This leads to increase their levels of motivation and the desire to perform well.

Growth of Business

Implementation of BPR results in the growth of the present business thus enabling the emergence of new businesses within the same organization.

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extensive support from the top management.

Development after 1995

“With the publication of critiques in 1995 and 1996 by some of the early BPR proponents coupled with abuses and misuses of the concept by others, the reengineering fervor in the U.S. began to wane. Since then, considering business processes as a starting point for business analysis and redesign has become a widely accepted approach and is a standard part of the change methodology portfolio, but is typically performed in a less radical way as originally proposed.

More recently, the concept of Business Process Management (BPM) has gained major attention in the corporate world and can be considered as a successor to the BPR wave of the 1990s, as it is evenly driven by a striving for process efficiency supported by information technology. Equivalently to the critique brought forward against BPR, BPM is now accused of focusing on technology and disregarding the people aspects of change.”5

g.CRITIQUES ABOUT BPR

“Reengineering has earned a bad reputation because such projects have often resulted in massive layoffs. This reputation is not altogether unwarranted, since companies have often downsized under the banner of re-engineering. Further, reengineering has not always lived up to its expectations. The main reasons seem to be that:

Reengineering assumes that the factor that limits an organization's performance is the ineffectiveness of its processes (which may or may not be true) and offers no means of validating that assumption.

Reengineering assumes the need to start the process of performance improvement with a "clean slate," i.e. totally disregard the status quo.

According to Eliyahu M. Goldratt (and his Theory of Constraints) reengineering does not provide an effective way to focus improvement efforts on the organization's constraint.

Abrahamson (1996) showed that fashionable management terms tend to follow a lifecycle, which for Reengineering peaked between 1993 and 1996 (Ponzi and Koenig 2002). They argue that Reengineering was in fact nothing new (as e.g. when Henry Ford implemented the assembly line in 1908, he was in fact reengineering, radically changing the way of thinking in an organization). Dubois (2002) highlights the value of signaling terms as Reengineering, giving it a name, and stimulating it. At the same there can be a danger in usage of such fashionable concepts as mere ammunition to implement particular reform. Read Article by FarazRafique.

5 Business Process Reengineering, Wikipedia; Development after 1995 section: http://en.wikipedia.org/wiki/Business_process_reengineering

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The most frequent and harsh critique against BPR concerns the strict focus on efficiency and technology and the disregard of people in the organization that is subjected to a reengineering initiative. Very often, the label BPR was used for major workforce reductions. Thomas Davenport, an early BPR proponent, stated that:

"When I wrote about "business process redesign" in 1990, I explicitly said that using it for cost reduction alone was not a sensible goal. Consultants Michael Hammer and James Champy, the two names most closely associated with reengineering, have insisted all along that layoffs shouldn't be the point. But the fact is, once out of the bottle, the reengineering genie quickly turned ugly."

Hammer similarly admitted that: "I wasn't smart enough about that. I was reflecting my engineering background and was insufficient appreciative of the human dimension. I've learned that's critical.” ”6

III. THE ROLE OF IT7

Enterprises wanting to increase their market share or obtain profits must adapt to changes in the environment. Consequently, many changes in business methods are beginning to appear, particularly Business Process Reengineering. Among the potential enablers of BPR is information technology (IT). IT makes it possible to obtain improvements in BPR. Enterprises can make their tasks easier, redesign their organization, change the way they work, and achieve spectacular improvement using, among other enablers, IT.

Relationship Between IT and BPR

The term ‘‘reengineering’’ first appeared in the Information technology field and has evolved into a broader change process. The aim of this radical improvement approach is quick and substantial gains in organizational performance by redesigning the core business process. In the late 20th century, many US companies embraced reengineering as an effective tool to implement changes to make the organization more efficient and competitive. The motivation was usually the realization that there was a need to speed up the process, reduce needed resources, improve productivity and efficiency, and improve competitiveness

Working together, BPR and IT have the potential to create more flexible, team-oriented, coordinative, and communication-based work capability. IT is more than a collection of tools for automating or mechanizing processes. It can fundamentally reshape the way business is done and enable the process design. In leading edge practices, information technology makes BPR possible and worthwhile. BPR and IT are natural partners, yet their relationships have not been fully explored.

6 Business Process Reengineering, Wikipedia; Critique section: http://en.wikipedia.org/wiki/Business_process_reengineering

7 Role of IT in BPR by Abhinav Johnson (F09001); http://www.slideshare.net/abhinavjohnson/business-process-reengineering-bpr-role-of-it

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What is the relation between BPR & Information Technology? Hammer and Champy consider IT as the key enabler of BPR. Davenport argues that BPR requires taking a broader view of both IT and business activity, and of the relationships between them. IT capabilities should support business processes, and business processes should be in terms of the capabilities IT can provide. They believe IT’s promise and its ultimate impact is to be the most powerful tool for reducing the costs of coordination.

It has been argued that innovative uses of IT would inevitably lead many firms to develop new, coordination- intensive structures, enabling them to coordinate their activities in ways that were not possible before. Such coordination-intensive structures may lead to strategic advantages.

IT roles can be categorized into three phases: [Refer to Table 1]

1. Before the process is designed (Enabler)

BPR is a strategic action and requires a clear understanding of customers, market, industry and competitive directions. Furthermore, like any other strategic action, it requires consistency between the company’s business strategy and vision. Defining business strategy and developing a strategic vision requires understanding the company’s strengths and weaknesses, and the market structure and opportunities.

IT capabilities can provide good insight into the existing conditions. IT is one of several enablers, including human resources and organizational change, that all must be considered together to bring about change in business processes. Many companies ignore IT capabilities until after a process is designed. An awareness of IT capabilities can and should influence process design. Michael Hammer recommends companies to redefine the process first and automate it second.

2. While the process design is underway (Facilitator)

This stage involves two activities: technical and social design. During the technical phase, information is consolidated, alternatives are redefined, process linkages are re-examined, and controls are relocated prior to applying technology. The social design focuses on human aspects and involves employees who will affect corporate changes: defining jobs and teams, defining skills and staffing needs, and designing incentives are considered carefully. This stage also requires development of test and rollout plans. After the objectives are identified, the existing processes are mapped, measured, analyzed, and benchmarked, and then are combined to develop a new business process. Development of people, processes, and technology are integrated.

During the process design, accountability for development, testing and implementation must be clearly defined. Real benefits to the business result when IT becomes involved with more fundamental changes to the business process itself.

3. After the design is complete (Implementer)The bulk of the reengineering efforts lie in this phase. The reengineering efforts include planning

and managing people, processes, and technology and driving the implementation toward the business vision. The objectives of this stage are to pilot test the new approach, to monitor the

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results, and to provide extensive retraining of employees. As reengineering efforts go forward it is important to define and redefine performance goals and objectives, maintain a strong commitment to the vision, break the barriers between the departments, and be flexible as the business environment changes.

Role of IT in Reengineering

Business process reengineering is a pervasive but challenging tool for transforming organizations for radical improvement in all aspects of its performance. IT plays an important role by either enabling or constraining successful implementation of Reengineering. The role of IT in reengineering is not automating the business process. Companies that think of IT as the tool for automating its business process cannot reengineer. IT can be an enabler for reengineering by enabling the organization to reengineer. IT allows the organization to do business process more efficiently. IT can also become an inhibitor of reengineering if the organization's IT Infrastructure is inadequate or inflexible. IT infrastructure capability includes both the technical and managerial expertise required to provide reliable physical services and extensive electronic connectivity within and outside the firm.

The major advantage of IT in reengineering lies in its disruptive power. IT has the power to break the rules and make people think inductively and give the company a competitive advantage. The company that used the disruptive power of IT to break all rules and gain competitive advantage was Amazon.com. Amazon.com broke the existing rules and sold books without a physical presence for its customers, through Internet. Amazon.com in doing so has completely changed the book store business and broke all

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the rules. The key to the effective use of IT lies not in moving the information faster but in doing right things with it. IT has to be used to make proactive decisions to improve business performance rather than report on it after the fact. In the design phase of implementation of reengineering the capabilities of IT can be used to simulate a model of the design and there by validate the new design.

Business Process Reengineering aims at enhancing customer service by improving productivity, eliminating waste and reducing the cost. The drive for BPR is to realize dramatic improvements by fundamentally rethinking how an organization’s work should be done instead of mere process improvement that focus on functional or incremental improvement.

Reengineering involves “radical improvements” and not any incremental changes. In this sense, reengineering without an IT support is nearly impossible. The evolution of IT provides multiple options for process execution that were not possible erstwhile, which opened the possibility of reengineering in the first place.

IT system helps in process automation, integration of multiple processes and ensures consistency, thereby improving productivity and quality of the processes and reducing the cost. IT is an enabler of process reengineering and not a substitute for it.

Role of IT in BPR is quite significant and continuous update on technology will help. IT enabled BPR ensures achieving larger target, reducing the risk and providing measures in sustaining results over a longer time. IT had a major role to play in BPR. The reason for that is very simple—IT is perhaps the only department in any organization which has a holistic view of the organization from a process perspective—from the perspective of what are the bottle necks, choke points, etc. Few years back, IT used to provide support to the business, then it started playing the role of an enabler, and now it drives the business. It is tough to think of BPR without IT, as the contribution of IT in these processes is around 80%-90%. IT also helps to improve business and enhance customer expectations. The need of IT, especially in today’s slowdown scenario, is more and thus there is more expectation from it.

Importance of IT

Building an effective IT infrastructure is a vital factor in successful BPR implementation. An adequate understanding of technologies for redesigning business processes is necessary for proper selection of IT platforms. Effective overall system architecture, flexible IT infrastructure and proper installation of IT components all contribute to building an effective IT infrastructure for business processes. The IT infrastructure and BPR are interdependent in the sense that deciding the information requirements for the new business processes determines the IT infrastructure. In addition, recognition of IT capabilities provides alternatives for BPR.

Building a responsive IT infrastructure is highly dependent on an appropriate determination of business process information needs. This, in turn, is determined by the types of activities within a business process, and the sequencing and reliance on other organizational processes. An effective IT

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infrastructure follows a top-down approach, beginning with business strategy and IS strategy and passing through designs of data, systems and computer architecture. Linkages between the IT infrastructure components are important for ensuring integrity and consistency among the IT infrastructure components. IT standards also have a major role in reconciling various infrastructure components to provide shared IT services that are of a certain degree of effectiveness to support business process applications. The IT infrastructure shared services and the human IT infrastructure components, in terms of their responsibilities and their expertise, are both vital to the process of the IT infrastructure composition.

“Information and IT are rarely sufficient to bring about the process change; most process innovations are enabled by a combination of IT, information and organizational/human resource changes.”

IT provides project management skills and experience, which is a key ingredient in successfully implementing reengineering. The IT group of the company has experience in large scale project as they are exposed to the structured demand of large scale projects. Reengineering in a company is and should be undertaken as a project, this is the time when the project management expertise of the IT group becomes a key ingredient in the success of reengineering.

IT can continuously reflect and reinforce bureaucratic and functional structures or IT can help to create a leaner, flatter and more responsive organization. For example, IT tools that are designed for functional hierarchies are primarily designed to support incremental improvements and cannot achieve the radical change in BPR projects. While information systems provide fast processing and response, they often fail to provide the flexibility for human communication, which can lead to serious consequences. This means IT may sometimes have a negative impact by merely automating the existing processes. However, it could also have a positive impact if it is deployed correctly in conjunction with the organization’s goals. IT is the enabler to reengineer processes and is an important driving force for business transformation.

Although, BPR has its roots in IT management, it is primarily a business initiative that has broad consequences in terms of satisfying the needs of customers and the firm's other constituents. The IS group may need to play a behind-the scenes advocacy role, convincing senior management of the power offered by IT and process redesign. It would also need to incorporate the skills of process measurement, analysis, and redesign.

Role of CIOs

The function of IT in any business needs to be externally oriented. The CIO needs to continuously keep a tab on new developments in the arena of IT. They need to have a thorough knowledge of the business wherein they can map the new IT developments to the current and future opportunities for executing business processes in a new, more efficient manner.

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As IT has a holistic view of the organization, the CIO can do the homework and present to business managers an analysis of processes and give his views on possible areas which are candidates for BPR.

While IT is an enabler in BPR and most of the BPR in today’s time would involve IT, it should be kept in mind that BPR is done from business process perspective and not IT. In simple terms, CIOs need to understand the business challenges, put themselves in shoes of business managers, and then discuss what changes should be done.

A CIO’s role can be effective in all stages, viz. planning stage, execution stage, realization stage and continuous improvement stage. For example, a CIO can contribute in the decision of choosing appropriate technology, implementation, flow of information system for effective deployment, project management and so on. CIOs can also take the lead towards facilitating BPR exercises within their enterprise as they have visibility across all functions and interdependencies. Since most IT organizations are typically not aligned to any specific function and thereby seen as politically agnostic, they are in an advantageous position to seize this opportunity. CIOs need to have in-depth knowledge about various departments, communities and even industries. They should adopt the best practices and solutions that have relevance to their business, as the adoption of IT depends on the nature of the business and vary from one organization to another.

CIOs need to involve key business leaders into IT so that the ideas for reengineering emerge out of a well aligned exercise between the business and IT. An IT mind is typically “operations oriented” one wherein the tendency may be to follow the conventional path most of the times. IT leadership should consciously attempt to come out of it. A CIO also needs to facilitate setting up a cross functional team to carry-out inter-dependant collaborative exercise to generate ideas of process reengineering.

Every BPR project should have clear cut target and recourses for effective implementation. In today’s times when IT is all pervasive and entrenched in all processes in any organization, it is almost impossible to reengineer without support of IT.

Future Role of IT in BPR

With IT advancing at a rapid pace every day the future role of IT in reengineering becomes more critical. In the survey conducted by Prosci Research and Publishing Company among CEOs of 205 companies across the globe. The future role of IT has been identified into three main categories.

1. Participate as a member of the reengineering team, but do not take control of the project

2. Define technology solutions to enable new business processes and take time to educate

operational managers about new technology.

3. Implement technology needed to support the new business processes. Be sure to set

expectations and define deliverables clearly

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IT managers and staff have to become business analysts, knowledgeable of business needs and able to combine a business orientation with technical expertise. This will help in integrating business knowledge with technical skills.

With the advent of Internet and e-commerce, businesses are getting closer to the customers. In future Internet will change the way business is carried out. E-commerce will affect reengineering more than present day IT. E-commerce initiatives will be business led activities with an implicit acceptance of process change and often involving the use of high-energy change initiatives like reengineering.

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IV. APPLICATION OF BPR