The Three Steps in Business Re-Engineering Process

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Table of Contents

Introduction
Step 1: Determination of the status quo
Step 2: identifying the area to change
Stage 3: change implementation
Conclusion
Bibliography

Introduction

Business process re-engineering is a recent management tool which aims at improving organisations current operational strategies. It aims at modernisation of business processes to attain high efficiency for a competitive advantage (Jack, 2001). It reconstructs different organisation processes; the expected results include cost efficiency, improved customer service and improvement in production speed.

Generally the process has three major steps; determine the status quo, identify the areas to change and change implementation; however each step has two stages (Naitove, 2010). This paper discusses the steps in business re-engineering process (BRP).

Step 1: Determination of the status quo

Develop business vision, mission and business objectives

BRP does not aim at marginal improvement in a single area but target the entire business; it aims to look into all processes for an overall gain to the organisation. With this in mind, the start point of the process is aligning all business processes with the new system.

The direction of a business is shaped by its mission, vision and corporate objectives. In this stage, mission, vision and objectives of the company are defined again. The definition result after interpolating what has the business being able to attain and its potential level. Set mission, vision and objectives should be attainable (Huang, 2010). The following factors are considered;

What is the vision of the organisation? Has the vision being attained? If not to what extent has the company failed? Is the vision still relevant to the new business environment that the business is operating in? What areas lead to failure?
What is the mission of the organisation? Is the vision met using the current set methods and strategies? If not why? Does the business have enough potential to fulfil the set mission?

Review the objectives which the company aims to undertake? How often are the objectives met? If not always why they are not met?
Is there an established trend in business performance? This looks into areas which have failed the organisation in the past.

After understanding the current position in the business, then an attainable vision, mission and objectives are defined. If the previous ones are still relevant and attainable, they can be retained but care taken to improve processes which has in early cases affected their attainment (Wheelen $ Hunger, 1999).

Understanding and measuring existing processes

For the attainment of business objectives and attainment of goals, a business undergoes through a number of processes. Before making a move to implement a BPR, an in-depth analysis of processes in the company is necessary. The main reason for this move is to ensure that the business learns from previous mistakes.

Those activities which have lead to inefficiency in the past are documented and measures taken to ensure that they will not be repeated. For example if in the past a business was not able to attain its objectives because of inefficient logistics supply’s, where they have gotten sub-standard goods, this area is addressed independently. Note are taken on the past experience (Williams, 2001).

The level of efficiency of current system is measured. The expected level is also measure and the deficit that the current system has is calculated.

The guiding questions in this stage are

Does the current business processes have potential to attain expected results?
Which areas have let the attainment down in the past?
What are the identified root causes of deficiency in the company?

This stage is focuses more on utilising past experiences in making sound decisions in the future. Management information storage tools like business intelligence tools are utilised to ensure that there is quality information. Considering experiences of other businesses in the same industry is important, however care should be taken to ensure that external data is well vetted for relevance and integrity (Chao-Hsiung, Shaio, Barnes & Li, 2010).

Step 2: identifying the area to change

Identification of business processes to be redefined

After having a deep understanding of general performance of the business; this is after an analysis in step 1, the next step is defining the exact areas, strategies and functions which need to be redesigned. They are the areas which hinders attainment of business vision, mission and objectives (Anon, 1994).

The process is procedural where management can use a high impact processes, exhaustive approach or six sigma approach. When using a high impact process approach, the management aims at identifying those processes which has a high negative effect to the attainment of business goals. After the processes have been recognised, they are then addressed.

This approach is more common to large business which taking an entire analysis of all micro process may take along of time. After the initial processes affecting the attainment of goals have been determined, the next processes in line are identified until the process with the most minimal effect is addressed (Romney, 1994).

When using an exhaustive approach, which is common to small scale businesses, the entire business processes are analysed and those areas which lead to a deficit in the organisation are recognised. Problem in the identified area is identified and alternatives to solve it formulated.

These area may be supply’s, operation costs management, logistics, human resources or quality of fixed assets among others (Adam & VandeWater, 1995).

The third approach maybe a six sigma approach. This is a method that aims at detecting defects in organisational processes. It aims at analysing individual processes are identifying the area that is not effectively and efficiently producing results. The approach is a continuous one and assumes that if one process affects the attainment of anthers objectives. Six sigma approaches ensures that the root cause of a problem has been established and rectified.

It a systematically, gradual, and efficient process which yields satisfactory results when applied to either small or large businesses; taking an internal and external analysis of a business is important and part of six sigma. Internal and external processes involve analysing (S.W.O.T. analysis) that the company is operating under.

Taking P.E.S.T.L.E. (political, Environmental, social, Technological, legal and Ecological) analysis is another approach to analyse a business. Internal and external audits assist a company to have a clearer picture of it and developing of operational mechanisms will be facilitated (O’Connor, 1989).

Identify IT levers

BRP utilises information generated internally and sometimes information from an external source. To have an effective system, the way information is documented and analysed is of great importance. After a re-engineering, the focus should be on the customer; he should be the end beneficially of the process although it is done inside a company (Haberbeg & Rieple, 2001).

Efficient information management systems and tools are identified; and cross functional systems indentified. Other than the gathered information, systems of feedback and responses should be identified (Goold & Campbell, 2002).

Stage 3: change implementation

Build strategies to implement the desired changes

With information on the areas that need to be redesigned, strategies to implement the redesign are developed. The level involves aligning all processes with the new adopted system; if there is need to buy some assets, train staff or employ staff it is done at this stage.

All tools to implementation (both human and physical resources) are put in place. Although strategies are made for the general attainment of goals, objectives, mission and vision, they are sometimes seen as independent but collaborate with each other (Esquerre, 2005). These strategies address the areas which had a deficit these strategies include;

Supply management chain

These are strategies implemented to ensure that the company gets quality raw materials, in the right time at an appropriate cost. When implementing this system, there must be collaboration with all departments as they will advice logistics and procurement department of the quality and quantity they require at a certain time.

It involves, forward logistics, backwards logistics, and reverse logistics. Good relation is developed with suppliers to have just in time supplies (Kotter & Schlesinger, 2008).

Value determination

This having is a set level of value that is required for raw materials and final products; mechanisms to determine value in a business are put in place. Monitoring of value starts from raw material value determination, to ensure quality materials are delivered in the company. At the same time output quality and quantity from each stage are determined.

In case there is a deficit, the problem should be addressed immediately. To determine whether quality assured is attained, it should not be the internal standard only but customer’s expectation and competitor’s value level are of essence. Value comes with a price; a company’s pricing strategy should meet organizational goals without hurting consumers; there should be a mutual benefit and satisfaction (Porter, 1985)

Customer service

Mechanisms to get feedback and respond to customer issues are developed. This may take the form of call centre or other feedback mechanisms. This acts as another source of information to the company for future improvements.

Existing customers are a pool of assets to a company and they can give information relevant to the improvement of various processes. Marketing and selling strategies are addressed and skewed toward a customer based approach (Fred, 2008).

Total Quality Management and strategic Quality management

After individual processes have been designed to align with business new goals and objectives, the result should be a total quality management where there is interrelation among departments. There should be mechanisms set to ensure that there is a smooth flow of processes (Champy, 1995). For example a target approach work well where a certain department say packaging is given a certain target to attain say 700 packages in an hour.

In case this is not attained, a focus on such department may point out a deficit in the production department if it’s not feeding the department effectively. This will assist is establishing the root causes of a defects and addressing them accordingly; instead of addressing symptoms (Collis & Rukstad, 2008).

Monitoring, support and control

After all mechanisms are set in place, the output from the system should be interpolated and the new system evaluated. Monitoring involves enforcing the system as the new mechanisms of processes (Gurvis, 2007).

The stage involves changing organisational behaviours and culture to support the system and give feedback on areas that need further improvement. Staff training, appraisals and participation is embraced to ensure that there is a total support of the system from all corners.

Mentoring involves integrating different processes/department for the general attainment of organisational goals and objectives. In appraisal of employees; management should follow scientific methods like balance score card (Swamson, 2009).

Motivational measures should also be put in place; this is where employees are motivated to support the new system. They are facilitated to point out areas which require improvement. Identification of key performance parameters/indicator is another supporting strategy; the indicators assist in evaluating the level of efficiency that the new system has attained.

BPR should follow a six sigma process and a Kaizen management tools; where the earlier involves in continuous detection of defects areas and the later is concerned with continuous quality improvement through people (Camillus, 2008).

Conclusion

BPR involves redesigning business process to attain a higher efficiency in an organisational for competitive advantage. BPR is a process aimed at improving current operational systems and developing strategies for the better processes in an organisation. It involves taking strategies like total quality management, six sigma approach, supply chain management system and developing an effective human resource team.

It involves the following steps; determine the status quo, identify the areas to change and change implementation; however each step has two stages which are developing business vision, mission and business objectives, Understanding and measuring existing processes, Identification of business processes to be redefined, Building strategies to implement the desired changes, Monitoring, support and control respectively.

Bibliography

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