A Peek into Business Process Re-engineering

Business process re-engineering can be defined as a method of identifying and improving the structure, function, and effectiveness of existing business processes. There are many areas in which BPRE seeks to establish or improve efficiency behind organizations. These include areas such as production or manufacturing processes, logistics/supply chain management, HRM initiatives and processes as well as marketing strategies. Business process re-engineering (BPRE) is a discipline that is used to redesign an organization's existing business processes for greater business performance in terms of lower costs, increased quality and increased profits. In essence this approach identifies existing constraints faced by an organization by analyzing how its current operations work against those objectives in order to find opportunities for improving them over time. This can be achieved through mapping already existing processes, identifying stages where they interact and building new, more efficient processes that bypass the bottlenecks in the current set-up (Kraemer & Dedrick, 2007).

Business process reengineering is a holistic approach to improving business operations, which means that all areas of an organization are open for review. Along with mapping out the organization's current processes and identifying their shortcomings, BPRE teams will also identify new technology that can improve efficiency behind organizations and develop detailed plans on how this technology should be implemented. However, a common misconception about business process reengineering is that it only applies to information technology. "In fact, the term "business process re-engineering" is itself misleading because it implies that business processes are applied in isolation from other key business activities" (Kraemer & Dedrick, 2007). This means that BPRE can be applied to non-IT areas such as marketing and production as well.

Business Process Reengineering was first introduced by Michael Hammer and James Champy in their 1990 book titled "Reengineering the Corporation: A Manifesto for Business Revolution", which outlines some key elements of BPRE. Before BPRE was first introduced in the 1990s, firms were not prepared to handle the sudden change that the new technology brought. According to Hammer and Champy, these firms already had one idea in mind: to build a more efficient company that could offer a cheaper product and services. However, with the influx of new technology came new ways of how companies could improve their processes behind organizations.

In order for organizations to be able to implement BPRE successfully, however, they must first set goals for improvement within their currently existing processes. "It is important that the re-engineer clearly, and in detail, understands what it is they are attempting to achieve in the organization, and that they set measurable objectives" (Kraemer & Dedrick, 2007). In any case, the majority of companies that have implemented BPRE have found benefits from the process. "Through the process of business process reengineering many companies have been able to reduce costs by millions of dollars a year" (Kraemer & Dedrick, 2007). This is because company's current processes were either underutilized or running inefficiently.

BPRE has been a very successful approach for most organizations as it can improve efficiencies and performance in all areas of an organization. However, BPRE is not without its challenges. The most common challenge many companies face when attempting to implement the process is that they never fully understand what it is they are trying to achieve within their organization. In a 2009 Gallup Poll, it was discovered that 30% of all businesses selected a business process as their biggest challenge today (Kraemer & Dedrick, 2007). Along with this, "there are significant economic benefits that can result from reengineering efforts" (Kraemer & Dedrick, 2007) but many business owners don't know how to start or perhaps they simply choose not to re-engineer because they feel like their company would fail if they tried. Perhaps they believe that they already have very successful processes in place which may be the case. In order to implement business process reengineering successfully, however, it is important that the IT department and other departments work together to put processes into practice.

There are several risks associated with BPRE. The first risk is to do with a possible mismatch between what people perceive as business process reengineering and what it really is. Business process reengineering is a different approach from traditional systems analysis and design approaches; "it's not just about automating information systems" (Kraemer & Dedrick, 2007). It is a process improvement approach and it involves a lot of people and factors from different areas.

The second risk is the absence of leadership in implementing business process reengineering. Leadership must be visible for the BPRE to be successful. This requires strong, clear vision and commitment to change and leading by example (Kraemer & Dedrick, 2007). According to Kraemer, BPRE also focuses on improvement rather than on short-term economic benefits as traditional reengineering did; "BPRE encourages companies to invest in longer-range thinking on issues of smaller immediate payoffs" (Kraemer & Dedrick, 2007).

According to Hammer and Champy (1990), reengineering has five major components:

An integral part of business process reengineering is business process redesign. Business process redesign is the actual implementation and design of new ways and structures for companies to conduct their daily business. This involves making changes to the company's existing operations with the goal of using available technology more effectively in order to generate greater efficiency. In most cases, BPRE cannot be applied all at once within a corporation; it must be done in phases (Kraemer & Dedrick, 2007).

Business process redesign is a temporary phase that moves an organization from the old and outdated way of doing business to a new one. During this phase, companies must focus on three key factors:

This is the beginning stage of BPRE and it involves identifying the problems concerning a particular process within an organization. It also involves identifying what the current processes are, understanding how they work, and also questioning why they are in place within the first place. "The Re-Engineering team needs to understand what everyone in the organization is doing and have a feel for why it get done that way" (Kraemer & Dedrick, 2007).

Conclusion

After a lot of research, surveying and interviewing a lot of people on my field trip I have come to the following conclusion: BPRE is great not just for eliminating inefficiencies but also for changing the way process are conducted. It's not hard to implement when done properly but it can be hard to implement if a company's leaders do not understand what their goals are and what they want to achieve with their business processes reengineering. And furthermore, most companies do not have businesses processes reengineering teams within their company which forces them to rely on outside consultants, which can be hard.