Business Process Re-engineering - Essay Example

Business Process Reengineering INTRODUCTION While organizational change is a normal phenomenon, managing it is problematic for some. Consequently, choosing the type of change strategy spells the difference between success and failure. Of all the development tools, reengineering is the most sweeping and radical one as it transcends mere modifications in structures, jobs and policies. Business process re-engineering according to Hammer and Champy is “the fundamental rethinking and radical redesign of business systems to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service, and speed” (as cited in Kiefer, 2003). Since enterprises use old ways of organizing, BPR challenges traditional assumptions of running the business. It rejects the fragmented structures which divide organizations into very simple tasks—reductionism (Parys & Thijs, 2003). Hence, Lester argued that instead of breaking down the enterprise into “narrowly defined functions,” the structures are organized around “integrated business processes, sequences or agglomerations of tasks” (as cited in Graetz, 2006). ELEMENTAL CONCEPTS Reengineering is a far-reaching change tool that replaces existing process structures with innovative solutions mainly by taking advantage of technological developments (Parys & Thijs, 2003). Beckford argued that it also allows companies to capitalize the advanced education and abilities of the human resource employed (as cited in Parys & Thijs, 2003). BPR seeks to improve the operation of a business enterprise by drastically changing its traditional structures, which usually involves examining and redesigning business processes. The definitive elements of business process reengineering consist of the following keywords: (1) fundamental, which implies asking “why do we do what we do, why do we do it the way we do,” and how we do it; (2) radical, which means avoiding superficial changes and finding totally new modes of achieving goals; (3) dramatic, which discards marginal innovations but is all about achieving great leaps in performance; (4) processes, which denotes “process-based thinking” focusing not on the people, tasks or structures but on the processes (Lam, n.d.). The fourth key element is regarded as the most distinctive aspect of BPR as it goes against the current business practice of functionalist approach where process structures are fragmented into small tasks. Business process reengineering takes a reverse approach from these functional structures by the complete redesigning and changing of enterprises along ‘process,’ abrogating tedious and long sequences of “sign-offs” and “hand-offs,” thus making decisions and services effectively faster (Linden, 1993). Truly, BPR brings about radical yet essential revolution of the organization: not mere incremental improvement and development. RADICAL AND DRAMATIC Reengineering connotes reinvention and grand innovation that is why it is characterized as “radical.” It is theoretically “dramatic” as it takes not merely small steps towards change but “quantum leaps in performance” (Graetz, 2006). While some believe that this dramatic leap is very positive, others think otherwise. One of the apparent advantages of this radical approach is the introduction of innovative solutions to the organizational problems. Since there is a close link between process reengineering and information technology, a notable change in a company is information systems redesign. This commonly result to cost reduction—fewer people who performs the same job, performing with less supervision, and an “overall lower cost structure” (Lawler, Mohrman, & Benson, 2001). The technique comprises the integration of ‘process redesign’ and the use of information technologies to accomplish reengineering. It is therefore an “innovative computer-aided business analysis tool” which eases up business process development and systems analysis (Strassman, 1995). This can dramatically produce novel developments and may lead to huge improvements in business results: an expectation which many is exactly what the organization wants. On the other side of the spectrum, this radical and dramatic feature of BPR has nonetheless led others to suspect its overall impact. Reengineering is fraught with frustrations since it tries to reach extreme expectations in regard to the delivery of its promising benefits. This radical method may result to the destruction of fundamental knowledge used in business operation, thus resulting to utter failure (Graetz, 2006). This is the very reason why process reengineering is not automatically equated with success and progress. Another by-product of a radical style and dramatic change is its equally dramatic consequence to the human resources. The reason is that this reengineering technique normally results to downsizing to as high as 30 per cent or more of employees: outsourcing more jobs while retaining fewer core activities (Graetz, 2006). If done carelessly and insensitively, it may undermine the morale of the workforce due to the layoffs and disruptions caused by reengineering implemented from above (“Business Process,” n.d.). Cartland argued that “there will certainly be some resistance to the change necessary for reengineering….Employees will be most concerned about their job status after a reengineering; they will often show this by promoting opposition to the plan" (as cited in Kiefer, 2003). Shapiro believes that reengineering can cause the erosion of the “bonds of trust” between employees and employers (as cited in “Business Process,” n.d.). This is because whenever the organization engages in business process reengineering, the staff or workers will think that the management is just trying to downsize the company. These difficulties and disruptions breed cynicism within the ranks. Others still argue that while it is true that BPR may reduce the number of employees, its core objective is not only about terminating workers. Although it leads to delayering, downsizing and outsourcing, the goal is to develop a customer-oriented system where services become faster and more efficient. The layers of management will be fewer, while the workers will be more skilled in handling tasks, since the organization will not just be “technology-driven,” but “technology-enabled” (“Reengineering,” n.d.). PROCESS-ORIENTED Traditional organizational structure focuses on segmented functionalist approach, where tasks are distributed among departments. This task-based thinking emphasizes layered checks where employees’ efforts are directed towards accounting for what was done by others without stressing on the need to actually accomplish something. Additional procedural checks are created whenever more problems occur, thus making the structure more complex and unmanageable. Reengineering reverses this approach by removing old functional processes and unnecessary layers with cross-functional activities; and the theory is that, with the aid of information technology, this process-oriented technique points to multiple benefits such as increased quality, speed, service, innovation and productivity (Simon, 1994). But the problem is again the resistance that is expected from the removal of functional layers through a non-participative or “managerialist” approach of change (Graetz, 2006). Nonetheless, there are those who theorize that this process-based tool adds motivation to employees since it encourages their involvement and increases their sense of accomplishment (Kiefer, 2003). The job becomes very satisfying as BPR directs their attention to the whole corporate objectives; “the employee performs a whole job, a process or a subprocess, that by definition produces a result that somebody cares about” (Kiefer, 2003). The knowledge and personal development of employees grow as the job likewise grows with it. Then again, there is a downside with this employee growth from reengineering. Hammer and Champy advance the theory that “it is no longer enough merely to look at prospective employees’ education, training, and skills; their character becomes an issue as well. Are they self-starting? Do they have self-discipline? Are they motivated to do what it takes to please the customer?” (as cited in Kiefer, 2003). Though this may not be a bad thing at all, the change complicates the process because the company needs to ensure that they employ the right workers based on a demanding criterion: multi-skilled in performing various jobs (Kiefer, 2003). Hammer and Champy see this as an advantage since “if jobs are more satisfying, they are also more challenging and difficult. Much of the old, routine 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” (as cited in Kiefer, 2003). The only downside of this is that business process reengineering certainly requires high level of teamwork and higher expectations of job performance, which in turn lead to very exaggerated demands and high hopes as to its expected benefits—and sometimes just hopes. The drawback again of reengineering is its limited application—not all organization may use it. When an enterprise is experiencing a crisis, BPR as a “highly streamlined process” would only cause more problems; it is “not a quick fix” (Linden, 1993). It is not a quick fix tool since it “may help you save money tomorrow but will leave you in a worse position next month or next year” (Weicher, Chu, Lin, Le, & Yu, 1995). CONCLUSION The idea of business process reengineering as a tool of change is to challenge the conventional structure of an organization. Therefore, it attempts to execute far reaching changes and restructuring processes in a whole lot different way. The objective is to keep in line the fundamental elements which are valuable to the enterprise while eliminating those layers which can be outsourced. Whether this holistic perspective is a good thing or not still actually depends on how the reengineering process is carried out. References Business process reengineering (BPR). (n.d.). Retrieved from http://www.accountingformanagement.com/process_reengineering.htm Graetz, F. (2006). Managing organisational change. Milton, QLD: Al John Wiley and Sons. Kiefer, T. (2003). Advantages and disadvantages of business process reengineering. Retrieved from http://www.tobiaskiefer.de/Finnland/Dokumentation_Organization_Markets.pdf Lam, K. (n.d.). A study of business process reengineering. Retrieved from http://www.doc.ic.ac.uk/~nd/surprise_95/journal/vol2/tmkl/article2.html Lawler, E. E., Mohrman, S. A., & Benson, G. (2001). Organizing for high performance: employee involvement, Tqm, reengineering, and knowledge management in the Fortune 1000. San Francisco: Jossey-Bass. Linden, R. (1993). Business process reengineering: Newest fad, or revolution in government? Public Management, 75 (11). Available from http://www.questia.com/read/5000231680 Parys, M., & Thijs, N. (2003). Business Process Reengineering; or how to enable bottom-up participation in a top down reform programme. Retrieved from http://soc.kuleuven.be/io/egpa/HRM/lisbon/parys_thijs.pdf Reengineering. (n.d.). In Computer Desktop Encyclopedia. Retrieved from http://www.answers.com/topic/business-process-reengineering Simon, K. A. (1994). Towards a theoretical framework for business process reengineering. Retrieved from http://www.instant-science.net/pub/thesis.pdf Strassmann, P. (1995). The roots of business process reengineering. Retrieved from http://www.strassmann.com/pubs/reeng/roots.html Weicher, M., Chu, W., Lin, W. C., Le, V., & Yu, D. (1995). Business process reengineering analysis and recommendations. Retrieved from http://www.netlib.com/files/bpr1.pdf Read More