This was a discussion in CiteHR to understand Business Process Reengineering . http://www.citehr.com/288656-business-process-re-enginering.html
Business Process Reengineering as defined by Yogesh Malhotra, in “Business Process Redesign: An Overview,” IEEE Engineering Management Review, is the analysis and design of workflows and processes within and between organizations (Davenport & Short 1990). Teng et al. (1994). BPR is defined as “the critical analysis and radical redesign of existing business processes to achieve breakthrough improvements in performance measures.” Ideally, It begins with detecting certain backlogs and defects in an existing business process. This leads to a complete review of the enterprise where duplication is eradicated and several process are integrated to create a better workflow. These entail redesigning the jobs and reorganising the deliverables. It may create a number of challenges such as losing positions consequently job loss.
Let us take a look at the steps to implement BPR. As mentioned in Business Process Reengineering: A consolidated Methodology by Subramanian Muthu, Larry Whitman, and S. Hossein Cheraghi, there are different methodologies which further include several steps. It begins with developing a vision and strategy including the customer requirements and goals for the process. This sets the direction motivating the BPR. Next is to create a desired culture by measuring and mapping the existing process. Subsequently, benchmark to justify the reengineering. This is followed by integrating and improving enterprise by analysing different processes. Technological problem solving is involved to develop the BPR in an alignment with the social design. Finally implement change and validation by targeting continuous improvement.
BPR have been successfully implemented in the industry. IBM implemented it in 1992 with customer focus as its guiding principle. Pricing tool software was implemented by the redesigned process which moved the responsibility for pricing to the case team. This eradicated the delay by two months which used to happen formerly when pricing was referred to IBM headquarters.
There are several HR implications of BPR. Business Process Reengineering Analysis and Recommendations By Maureen Weicher, William W. Chu, Wan Ching Lin, Van Le and Dominic Yu cite a live case . It mentions a case where GTO Inc had implemented BPR to raise the employee morale impacting the bottom line. The case shares that the company was badly hit post the owner’s death. A new CEO , Chuck Mitchel was hired, who implemented incremental change rather than sweep moves. “It was intended to create an atmosphere of trust and optimism by listening to and adopting their suggestions, improving their health and disability insurance, and when things started to turn around, increasing their pay and distributing bonuses from a profit sharing plan. The salesmen were put on salary with incentives. Acts such as fixing the leaky roof, allowing ten minute breaks, and keeping the coffee machine stocked convinced the employees that that Mitchell was “genuine.” This brought a turnaround of $500,000 as a profit. They further recorded a 9% increase in gross sales and 30% decrease in administrative and operating cost.
Just as every change management program hold challenges, so does BPR. The paradox is though this is a team work, it still requires a strong leadership. One executive with BPR experience warns not to assume “you can simply issue directives from the centre and expect it to happen.” At times BPR may lead to competitive advantages, which its short lived. The redesign needs to aim for innovation and not just improvement. A close attention to IT needs to be given. The implementation of the technology holds a key to bring in the targeted turn-around. In the words of Ginni Rometty” For most companies, isolated business process reengineering is no longer enough. They now realize the importance of tying together data across disparate business processes, because this provides a holistic view of enterprise operations, and enables the company to innovate at a business model level, whether it’s linking price to demand and supply variables in real-time, or understanding risk as it is being incurred to drive customized insurance policies. To do this requires data integration skills, business consulting, and math science expertise.”