Business process reengineering
| Business process reengineering |
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Business Process Reengineering is a method consisting of a thorough transformation of company's processes aimed to improve its functioning. Often it is accompanied by introducing new information technologies in company that replaces the traditional processes and allow reduction in efforts and the effective use of resources. It requires organizational changes and human factor concerns. People reluctance is often cause of the failure of the BPR implementation. Reengineering aims to improve the efficiency in a short time through the rapid and radical redesign of main processes in the organization. It is recommended to redesign one of the main processes rather than all at once. Following process selection criteria can be used: cost, timeliness, scale, difficulty, problems, etc.
BPR Rules
- Focus on key processes of the company,
- Processes must aim at customer requirement or need
- Companies needs to focus on its core business,
- The use of modern IT systems is recommended
- Rejection of the ballast of the past,
- Think different,
- Consider existing restrictions.
Benefits of BPR
- Shortening of production cycle
- Cost reduction
- Improvement in product quality and customer satisfaction,
- Grow of profitability
- Extending market share
Stages of BPR implementation
- Step 1 - Identify requirements of clients
- Step 2 - Assessment of present situation
- Step 3 - Analysis and modification of the existing system
- Step 5 - Design of a new process
- Stage 6 - Implementation of improved process
Common errors
- Incorrect interpretation of the idea of BPR,
- Improper identification of processes
- Unrealistic expectations,
- Prolonged implementation
- Lack of adequate resources
- Too low management commitment, including the lack of conviction to BPR.
Examples of Business process reengineering
- Automation of payroll processes: This involves the use of software to streamline the payroll process, from the employee's time-tracking to the payment of wages. This reduces the manual effort and time associated with payroll calculations, as well as eliminating errors.
- Redesign of customer service process: This involves the redesign of the customer service process to make it more efficient and customer friendly. This can involve introducing online tools for customers to track orders, receive updates, and get help quickly, as well as reorganizing the customer service team’s tasks and responsibilities.
- Streamlining of inventory management: This involves the use of technology and data-driven insights to make the inventory management process more efficient. This includes the use of automated systems to track stock levels, as well as identifying opportunities for reducing costs and increasing efficiency.
- Optimization of supply chain process: This involves analyzing the current supply chain process and identifying opportunities for optimization. This can involve streamlining the process, reducing costs, and improving efficiency. It may also involve introducing new technologies, such as robots and AI, to automate certain tasks.
Limitations of Business process reengineering
Business process reengineering is a method used to improve the efficiency of an organization through rapid and radical redesign of their main processes. However, it has several limitations that should be considered before its implementation. These include:
- Cost – BPR is a costly and time-consuming process that requires significant investments in technologies and personnel. It often leads to additional expenses and can easily become an overpriced project.
- Resistance to change – It is common for people to have a natural resistance to change, which may impede the successful implementation of BPR. It is necessary to ensure the acceptance of the new approach and make sure that everyone is on board with the changes.
- Complexity – BPR is a complex and intricate process that requires careful planning, coordination and execution. It is easy to make mistakes during the implementation and it is important to have a clear understanding of all the steps involved.
- Lack of flexibility – BPR often results in rigid processes that are difficult to adapt to changing conditions. This can limit the effectiveness of the process if the market conditions change or new requirements emerge.
One of the approaches related to Business Process Reengineering (BPR) is the following:
- Process Automation – It is a process of automating a manual business process by replacing human activities with technology-enabled activities. This approach helps to reduce costs, increase accuracy, and improve customer experience.
- Process Modelling – It is a way of documenting and understanding how a process works and how it fits into the organization. It is a helpful tool for business process reengineering as it allows identifying inefficient parts of the process.
- Process Improvement – It is a systematic approach to identifying and eliminating process bottlenecks and inefficiencies. This can involve streamlining processes, removing redundant steps, and optimizing workflow.
- Process Reengineering – It is the practice of redesigning a process to improve performance, efficiency, quality, and cost. It is an important part of BPR and involves the complete overhaul of a process from start to finish.
In summary, Business Process Reengineering (BPR) is a comprehensive approach that involves a thorough transformation of a company’s processes. Other related approaches include Process Automation, Process Modelling, Process Improvement, and Process Reengineering. These approaches focus on improving performance, efficiency, quality, and cost of processes and can be used in combination with BPR to achieve desired results.
References
- Grover, V., Jeong, S. R., Kettinger, W. J., & Teng, J. T. (1995). The implementation of business process reengineering. Journal of Management Information Systems, 12(1), 109-144.
