Business Process Reengineering for Competitive Advantage

In business processes reengineering all the outdated processes of the business are redesigned along with the connected systems and entity’s structures with an aim to reach at a remarkable performance level along with business improvements. The corporate basis for creating these changes possibly will comprise deprived performance in terms of competition, financial aspects and reduction of market share of emerging market opportunities. Business process reengineering just not mean to introduction of new technology, automation, reorganization, and downsizing of business process etc but also involve change assessment various business components such as culture, entity, technology, processes and strategies.

The relationship between a company and its customers is not limited to just the buying and selling of a product or service. It has gained new dimensions and expanded from the buying and selling of products and services to a whole range of business practices form customer service, consulting and pricing to production and distribution. Customers have become increasingly selective due to the availability of a wide range of products and services. These changes in the market place have forced companies to rethink about their business processes. Business process reengineering (BPR) makes companies more customers focused and responsive to changes in the market place. These results are achieved by reshaping the corporate structure around the business processes. Business process reengineering (BPR) achieves this transformation, not by automation of the business processes, but by rethinking the company’s tasks in a holistic and process oriented manner.

The various stages that a typical business processes reengineering implementation program goes through are:

  1. Identify the needs for the BPR package: The first stage involves the identification of the needs to be satisfied by adopting the BPR package. Once these needs are identified, organizations can evaluate how ERP implementation can help satisfy these needs. Transforming the labor and machinery based productivity into knowledge and information based productivity can be the examples of the needs that a BPR can satisfy.
  2. Evaluating the “as-is” situation of the business: The next stage involves the identification of various processes involved in the working of the organization. Then, the detailed processes in business activities should be listed. Process mapping can be helpful in detailing the processes. It provides information about the time taken to complete a process, the number of decision points, the number of reporting points and flow of information, etc.
  3. Decisions about the desired “would-Be” situations for the business: Once the structure of the current processes is identified, the next stage involves the identification of the desired attributes for each of the processes. Performance standards are set for each process by using benchmarking techniques. Benchmarking ensures that the desired organizational attributes are comparable with the best business practices in the industry.
  4. Reengineering of business processes to achieve the desired results: In order to achieve these desired standards in business processes, organizations need to reengineer their current processes. The objectives of business process reengineering including reducing the process cycle time, reducing the number of decision points, optimizing the information flow between different functions and departments, etc.

Business Process Reengineering for Competitive Advantage

To gain competitive advantage, organizations should understand the scope of a particular market and identify the various inherent differences between various markets. They need to understand what is required to become qualifiers and order-winners. Qualifiers are the most basic attributes that an organization must possess before any customers will decide to deal with them. For instance, ISO standards have become on e of the key qualifiers for any organization with global markets. Qualifiers provide the initial impetus to customers to deal with an organization but, in order to close a deal, organizations must have order-winners. The order-winners could be price advantage, quality, etc. BPR enables the organizations to optimize and organize different qualifiers and order-winners by redesigning the complete processes so as to gain competitive advantage in the market.

Some of the order-winners and qualifiers, which apply to most companies, are discussed below:

  1. Price: As price is one of the key order-winners in most markets, the BPR package can help identify the cost centers and assist in redesigning processes to reduce production costs. Setting up tough cost targets and putting in place a rigorous monitoring system can help a company become cost-efficient. Therefore, BPR implementation should focus on the areas in which significant costs are involved so that appropriate resource allocations can be made and management attention can be focused on them. When a company uses price reduction as an order-winner, it should also change its corporate strategy accordingly. It needs to assess changes in lead-times, investment implications and cost-reduction potential in several areas. Without assessing these factors, the changes in the strategy will be inappropriate.
  2. Delivery reliability and speed: Delivery reliability has also become one of the criteria on which customers judge an organization’s competitiveness. BPR can make more efficient the procurement and distribution activities and reduce the process lead time involved in purchasing the raw materials and distribution of finished products. BPR helps to reduce the time in coordinating activities among all the entities of the supply chain through the smooth flow of information between them. With the help of BPR, the lead time required to process an order is reduced significantly. The need to provide information to customers and suppliers has forced BPR vendors to implement their applications with e-commerce also.
  3. Quality: The concept of quality no longer denotes just a state of being free from defects. Today, quality encapsulates many dimensions like performance, features, reliability, conformance, durability, serviceability and aesthetics. BPR by its redesigning capabilities can bridge the gap between the existing process and the implementation of the best process can help an organization achieve its quality objectives.
  4. Product range: In today’s competitive world, organizations need to provide products in different shapes and sizes that satisfy the requirements of the different segments of the markets. They need a variety of products in their product line. But as the product range increase, the cost and time of production increases due to the modification of production process to accommodate the changes required for each product range. BPR, through reducing the process defects and be making the old labor and machinery system to knowledge and information systems, help in integrating the functionalities and a common database, enhances the capabilities that assists organizations in this direction.

Business process reengineering is different from other IT systems/models in that its implementation is not restricted to a single functional domain. In order to take full advantage of the profitable benefits of the BPR package, organizations may/need to follow the guidelines given below:

  1. Define corporate needs and culture: In order to implement a BPR system successfully, a complete overhaul of the business organization is needed. Organizations should assess their readiness for change and the possibility of the implementing change in the organization. The level of difficulty in bringing about change depends on the amount of change involved. Project leaders should assess the level of difficulty they are likely to face. The top management should provide complete support for the implementation of the BPR package. Implementing a BPR package may also involves the redefinition of the roles of different functional departments, and the authority and responsibility of individuals throughout the organization.
  2. Complete business process change: The organization should be aware of the required changes in business process and skills and attitudes for BPR implementation. It may have the willingness to adopt changes but may not be able to assess the implications of the changes. Therefore, the organization should undergo a brief business process redesigns exercise before the actual implementation. The redesigning exercise should be carried out on the basis of the structure of the BPR package, so that there is no mismatch between the required functionalities and the functionalities provided by the BPR package.
  3. Communicate across the organization: Communication allows different entities involved or affected by BPR implementation to be aware of its effects on their jobs. Proper communication optimizes the implementation process, as the employees are aware of what is required of them. Besides, feedback provides the management with information needed to allay the concerns of the employees. Communication should not overstate or understate the functionalities of the new system. Overstating the functionalities would raise employees’ expectations unrealistically, while understating them may leave employees unprepared for the changes required for BPR implementation.
  4. Provide strong leadership: Strong leadership is an important success factor in implementing a BPR package. The difference between and informal support and active leadership can be the difference between the success and the failure. Therefore, the members of the steering committee members should be able to understand the business redesign and integration. Though these may be complicated processes, the right modeling tools can help them make simpler to follow. The steering team should be trained in process mapping and reengineering methodology and it should be fully involved in the process redesign so that it can guide the team members (implementation team) properly.
  5. Select a balanced team: The size and complexity of BPR implementation and maintenance necessitates a balanced team of professionals. In general, the BPR implementation team consists of personnel from IT, finance, marketing, sales and production. Most companies hire external BPR consultants who provide information about the operational aspects of the new BPR system and assist the internal team.
  6. Select a good method of implementation: As the implementation of a BPR package involves the participation of all the departments, a proper sequence of steps should be identified to define the implementation process. Project leader should set the milestones to be achieved in the various phases of the implementation and review progress continuously against the milestones. They should define clearly the scope of the project and develop the work breakdown structure (WBS), and estimate the time required to complete each activity identified in the WBS. This will help them reach a realistic project plan. They need to ensure that there is no compromise with the quality of the new process/system.
  7. Organization-wide training: BPR is a complex and organization wide system that requires some amount of training so that full advantage of the capabilities of the new process can be taken. The steering team should be trained in process analysis and redesign. The staff in the information technology department should be made aware of the package architecture, design and configuration. Functional managers should learn how the new process performs and how it can be useful in the decision-making process. The training varies across the different levels, and is based on the requirements of the persons using the new system or process.

Leave a Reply

Your email address will not be published. Required fields are marked *