Saturday, September 12, 2015

Business Process Reengineering (BPR)

Reengineering has been described as the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance such as cost, quality, service, and speed (Hammer and Champy, 1993). Davenport and Short (business process redesign, 1990) developed the ideas of reengineering further toward holistic redesign of the organization based on processes. BPR aims at a complete and radical change to the entire organization as against a piecemeal change per department. BPR includes fundamental changes to the processes and their ongoing management. BPR also creates organization-wide, holistic, and dynamic opportunities for optimizations that are not only limited to specific process changes but also changes on an ongoing basis. BPR can thus be considered as a vital aspect of CAMS as used by BA.

Process reengineering stands to gain from the concepts of "Lean" and "Lean IT." The popularity of these "Lean" approaches in business and IT can be attributed to their focus on reducing and/or eliminating wastages within the organization processes. Lean approaches are initially applied by large and global organizations in order to produce process optimizations because such large enterprises are ideally suited to apply and capitalize through Lean processes.

Large-scale processes and their corresponding value streams (such as those from mining, agriculture, and airlines sector) can be reengineered by their detailed modeling, application of metrics and measurements, and introduction of technologies (e.g., mobile technologies). This is mainly because of the potential for changes to the entire business practices, business models, and methods. Lean approaches have also been used toward greening an organization (Unhelkar, 2011), and studying their impacts on enterprises, government, and society.

Thus, it is not only the changes to the processes or "how" an organization operates that is important but also the underlying business models, technologies, and social aspects of that business. For example, business processes need not be only supported by technology resources, common infrastructure, or application platform but also through a transparent business methodology (see and business models. IT plays a substantial role in providing a utility or a service to the business that can then be used by the business in its models and methods, such as Lean, to become green.

BPM includes reengineering of business processes to optimize them. Reengineering of processes includes reevaluation of processes and also an understanding and modeling of their supporting hardware, software, and people. The BPR (Hammer and Champy, 1993) exercise depends heavily on undertaking a model-based, performance-driven approach that is applied to the entire organization.

Consider a manual distribution process, with steps leading from the manufacturer through to the warehouse, retailer, and the end user. A reengineering exercise will lead to the formulation of an electronically enabled process that will provide business efficiencies and effectiveness in terms of the distribution network. Such efficiencies are typically achieved by displaying the product on an organization's Web site and enabling the consumer to order it directly from the Web site. With such reengineering, the steps associated with the wholesaler and the retailer can both be avoided—although the intermediaries can be the technology service providers and content managers (Unhelkar and Ginige, 2010).

Further reengineering of a process is efficient and effective from a cost, time, and even carbon viewpoint. For example, the new process model will aim to completely eliminate the E-intermediaries. Customer-driven reengineering will optimize collaborative business processes to eliminate the steps that were required only because of lack of alternative technologies (Unhelkar et al., 2010) by using location-sensitive mobile technologies. The premise here is that if the same process goal is achieved with fewer steps, the process itself will be efficient and less prone to errors (due to reduced number of steps).

Metrics and measures help in understanding the effects of reengineering. For example, a reengineered process can be measured for the time, effort, cost, quality, and service involved in producing goods, undertaking customer searches, packaging and distributing goods, and administering the organization. The resultant quality and end-user experience due to BPR has spin-off benefits for the organization. As Nott (2010) mentions, increasing awareness of the environment among businesses has also opened up the opportunities for businesses to use the BPM approach to model, measure, analyze, and mitigate the carbon impact of business activities.

The BPR initiative leads to customer-focused processes whose end goal is to achieve customer satisfaction rather than create hierarchical reorganization. Serving a customer efficiently, providing an enhanced customer experience, and having an efficient and optimized supply chain reduces waste and increases value for the organization.

In addition to Lean and reengineering, it is also worth mentioning Total Quality Management (TQM) when discussing efficiency in business processes. TQM brought about significant changes to the way an organization operated—imposing discipline and quality consciousness to the organizational processes. The resulting improvement in quality leads to a reduction in rework. Such reduced rework occurs within a high-quality and efficient business process that achieves its goal in a single attempt for each process cycle. This in turn, reduces costs and increases user satisfaction.

Taken from : The Art of Agile Practice: A Composite Approach for Projects and Organizations

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