Radical Change: Business Process Re-Engineering

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Radical ChangeBusiness Process Re-Engineering

• John Davis

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What is it?

• Reengineering is the fundamental rethinking and
  redesign of business processes to achieve
  dramatic improvements in critical, contemporary
  measures of performance, such as cost, quality,
  service, and speed.
• i.e. A rejection of incrementalism.
• Proposed by Hammond 1988

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Why do it?

• New focus on customer needs
• Unleash creative potential of the organisation
• Recognise the increasing competitive nature of
  business
• Open up new markets
• Downward pressure on costs

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What makes it special?

• Concentration on horizontal movements and
  processes across the organisation
• Identification on non-added value activities
• Radical nature of approach
• Concentration on outputs rather than inputs
• Redefines the role of the manager

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The Spectrum of BPR
Local Limited
Threat to Survival
Risk
Business Re-engineering
Paradigm Shift
Sustainable Step Changes
Ongoing Renewal
Transformation
Mindset Change
Gains
Process Re-engineering
Process Improvement
None
Incremental
Local
Scope
Business Wide
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Process Improvement

• Adopted by most firms but is it BPR?
• Function oriented
• Usually aimed at reducing delays
• The process itself is not challenged
• Often little critical appraisal
• Very little impact on the business as a whole

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Process Re-Engineering

• Involves fundamental rethinking
• Usually involves radical streamlining
• Often starts with the question should we be
  doing it all?
• Has an effect on the bottom line
• However, if only 1 or 2 processes are redesigned,
  much of the business is untouched

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Business Re-Engineering

• Involves step changes across all processes
• Usually greater emphasis on design and appraisal
• Involve significant to-level commitment
• Needs active Involvement of management
• Success seen on all processes and the performance
  as a whole

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Transformation

• Where next after BPR?
• Is there a need for continuous radical change
• Often the questions are-
• Why do they exist?
• What are they trying to achieve?

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Tests for transformation might include

• The company has step change improvements for all
  processes
• There is a perception that the business is
  dramatically better than 5 years ago
• A belief amongst customers employees that the
  organisation is easier and better to work with
• There is an organisation wide clarity of purpose

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Ongoing Renewal

• Those who go though BPR recognise that the
  process once started never stops
• New mind-sets have become part of the
  organisation

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BPR is not compulsory

• Change may be managed in other ways
• Creative thinking
• Benchmarking
• Culture change innovation
• What makes BPR relevant is the role of IT

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Does it work?

• The evidence is scanty
• Can an organisation cope with perpetual change?
• Can a firm reduced in size through BPR compete in
  the long run
• What about those cultures which do not easily
  accept criticism of authority?

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Dangers

• The word re-engineering suggests a view of the
  organisation as a machine. Is this correct?
• Does BPR mean continuous short term thinking

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Wrap-Up

• Is it all a fashion?
• Is it the only way to get dramatic improvements?
• Do employees really see themselves as empowered?
• Case studies of successful BPR suggest that
  these companies had a culture of good
  communications anyhow and so BPR was not so
  difficult. Is this always true?