concept of Bpr

Business Process Re-engineering (BPR) began as a private sector technique to help organizations fundamentally rethink how they do their work in order to dramatically improve customer service, cut operational costs, and become world-class competitors.

A key stimulus for re-engineering has been the continuing development and deployment of sophisticated information systems and networks. Leading organizations are becoming bolder in using this technology to support innovative business processes, rather than refining current ways of doing work.

Business process re-engineering is one approach for redesigning the way work is done to better support the organization’s mission and reduce costs. Re-engineering starts with a high-level assessment of the organization’s mission, strategic goals, and customer needs. Basic questions are asked, such as “Does our mission need to be redefined? Are our strategic goals aligned with our mission? Who are our customers?” An organization may find that it is operating on questionable assumptions, particularly in terms of the wants and needs of its customers. Only after the organization rethinks what it should be doing, does it go on to decide how best to do it.

Within the framework of this basic assessment of mission and goals, re-engineering focuses on the organization’s business processes – the steps and procedures that govern how resources are used to create products and services that meet the needs of particular customers or markets. As a structured ordering of work steps across time and place, a business process can be decomposed into specific activities, measured, modeled, and improved. It can also be completely redesigned or eliminated altogether. Re-engineering identifies, analyzes, and redesigns an organization’s core business processes with the aim of achieving dramatic improvements in critical performance measures, such as cost, quality, service, and speed.

Re-engineering recognizes that an organization’s business processes are usually fragmented into sub-processes and tasks that are carried out by several specialized functional areas within the organization. Often, no one is responsible for the overall performance of the entire process. Re-engineering maintains that optimizing the performance of sub-processes can result in some benefits, but cannot yield dramatic improvements if the process itself is fundamentally inefficient and outmoded. For that reason, re-engineering focuses on redesigning the process as a whole in order to achieve the greatest possible benefits to the organization and their customers. This drive

Unit 3: Business Process Re-engineering

notes for realizing dramatic improvements by fundamentally rethinking how the organization’s work

should be done distinguishes re-engineering from process improvement efforts that focus on functional or incremental improvement.

Successful organizations are envisioned to be networked across functional boundaries and business processes rather than functional hierarchies. However, simply using the latest technology on existing processes, respectively procedures, is no valid solution to the problem. The solution is found in taking a step further, rethink and question the business activities being a fundament for business processes. Effective redesign of business processes by removing unnecessary activities and replacing archaic, functional processes with cross-functional activities, in combination with using information technology as an enabler for this type of change will, according to the advocates of BPR lead to significant gains in speed, productivity, service, quality and innovation. Business re-engineering normally includes a fundamental analysis of the organization and a redesign of: 1. Organizational structure

2. Job definitions 3. Reward structures 4. Business work flows

5. Control processes and, in some cases

6. Reevaluation of the organizational culture and philosophy.

3.4 requirement of Bpr

Business Process Re-engineering (BPR) calls for a radical redesign and systematic overhauling of strategic systems and processes in an organization. In the technology-centric business environment of today, more and more organizations are using Information Technology (IT) tools in their mainstream organizational processes. Hence, for BPR, it is required that the functionalities of these IT systems are modified.

The goal of business process re-engineering is to redesign and change the existing business practices or process to achieve dramatic improvement in organizational performance. Organizational development is a continuous process but the pace of change has increased in manifolds. In volatile global world organizations enhance competitive advantage through Business Process Re-engineering (BPR) by radically redesigning selected processes.

The business process re-engineering implies transformed processes that together form a component of a larger system aimed at enabling organization to empower themselves with contemporary technologies business solution and innovations. Organizational effective performance has become a watchword in modern business; as a result there is inexorable pressure for Business Process Re-engineering.

The rampant and rapid expansion of competition across markets and geographic raises important questions such as “how should work be redesigned”, “who does it”? and “where do they do it”? “how to get it performed”? These questions necessitate venturing of Business Process Re-engineering into the overall strategy for sustained competition advantage, check costs, and differentiate products and effective price management with greater intensity and then flawless execution. At this juncture, it is pertinent to ask what is “Business Process” and as well as “Business Process Re-engineering”.

According to Stoddard and Jarvenpea (1995) Business Process are simply a set of activities that transformed a set of inputs into a set of outputs (goods or services) for another person or process using people and equipments. Business process entails set of logically related tasks performed to achieve a defined business output or outcome.

notes It involves a wide spectrum of activities procurement, order fulfillment, product development, customer service and sale.

Thus, Business Process Re-engineering becomes an offshoot of Business Process. Hammer and Champy (1993) argued that the fundamental reconsideration and radical redesign of organizational process, in order to achieve drastic improvement of current performance in cost, service and speed enjoys a fair measure of consensus. One can then assume that Business Process Re-engineering connotes the analysis and design of workflows and processes within and between organizations (Davenport and Short 1990).

Business Process Re-engineering relies on a different school of thought. It believes in continuous process improvement, re-engineering assumes that current process is irrelevant and there is need to commence another one. Such a clean slate perspective enables the designers of business process to focus on new process. This is to project oneself on what should the process look like? How do my customers want it to be like? How do best-in-class companies do it? What we might be able to do with no technology?

Business Process Re-engineering in the actual sense, have mixed successes therefore, business process re-engineering projects aimed at transforming inefficient work process. Henceforth, organizations such as banks and other financial institutions need to optimize results from this model in real business situations.

The need for businesses to improve the way they operate by increasing the efficiency and effectiveness of their business processes is a well-proven and documented approach. The rapid developments in enabling technology and changing customer needs, demands and sophistication have continued to fuel the need for ever-changing process improvements.

Based on this need, PricewaterhouseCoopers continues to offer its clients a superior business process improvement service, based on robust methodologies and tools and underpinned by a proven track record of results, locally and across the globe. Process re-engineering services include:

1. Process design and development 2. Process modeling

3. Process analysis 4. Process simulation

5. Process implementation support

3.4.1 methodology

PricewaterhouseCoopers’ approach to process re-engineering assignments is underpinned by our Process Improvement Through Benefits Management (PITBM) methodology.

In our approach, project success is achieved through benefits realization. Quite often, change projects have focused on the traditional project measures of success - on-time, to cost and to specification. However, this perspective may be too narrow as, whilst the project may be a success using these traditional measures, it still may be a failure from a business viewpoint if the planned benefits from the change project are neither realised nor measured.

The PITBM methodology has a whole lifecycle approach to obtaining beneficial returns on change and process improvement project investments by ensuring that the benefits realisation processes become an integral part of the organisational activities that remain in place after project completion. Benefits management addressed in this way is a business process and a management philosophy and not just a technique for investment justification.

Unit 3: Business Process Re-engineering

notes Benefits realisation management is enabled through:

1. Focusing on business outcomes from the inception of the change initiative and how they will be achieved and measured;

2. Ensuring that the organisation’s change initiative is supported throughout by a robust Business Case for change;

3. Matching the use of appropriate cost/benefit techniques to the desired business outcomes.

4. Incorporating comprehensive project, benefits, change and transition management activities throughout the change initiative.

3.4.2 process modelling tool

In executing process re-engineering assignments PricewaterhouseCoopers makes use of a comprehensive set of tools. Our approach for business transformation, streamlining and simplification, together with our access to our Global Best Practices database and benchmarking tools enables us to fast-track the identification of operational process issues and opportunities. PwC has selected Casewise Corporate Modeller as our advanced process modelling tool to complement other flowcharting tools already used in our practice.

We acknowledge that some assignments may require only a simple process mapping tool to manage a small number of “flat” flowcharts. However, in other client engagements the processes subject to improvement may require the capturing of additional information or relationships between process components for further analysis (i.e. transaction volumes, processing times, people, locations, technologies). Thorough analysis may also require simulation to facilitate resource planning, cycle time improvement, queue management or bottleneck identification and resolution. Casewise Corporate Modeller is deployed where clients require a more advanced approach to process re-engineering.

Task “Business process re-engineering concept really support the organization for improvement their business strategy.” Discuss.