What is Business Process Re-Engineering?
Business process re-engineering (BPRE) or business re-engineering has become the millennium’s buzzword in management and industry circles. Business process re-engineering has become a most efficient grand strategy for the industry leaders to keep up their competitive position for the followers to attack the leaders. The BPRE concept is meant to be used as a strategic instrument for maintaining an enterprise competitiveness.
Role of Managers in BPRE
The present managers are oriented towards tasks, jobs, functions, departments and structures but not processes. But the manager under re-engineering should be oriented towards business process.
The present system of doing the things in most of the enterprises is based on breaking the total work into simplest tasks and assigning each task to a specialist in order to get the advantage of division of labor and specialization. Therefore, managers concentrate on the individual tasks lose sight of the larger objective. The larger objective would be delivering the goods to the customers who ordered them.
Combining the tasks is BPRE
Business process re-engineering, thus, can be thought of as the task of combining the business tasks jobs, functions, departments and structures into a coherent business process. The business process should contain primarily tasks, functions, jobs and departments that taken together and create value for the customer. The business process is a sequence of activities that require input of one or more different pieces of detailed information, material or other resources and that creates a value for the customer.
Business Process Re-engineering is not possible in a small steps. An enterprise should give up their old principles overboard, unlearn the present concepts, dismantle the existing structures and work out a new concept and a new enterprise model that is oriented towards business process. The goal of business process re-engineering is to bring improvements in orders of magnitudes. They are not simple improvements in departments that are pursued, but quantum leaps for the enterprise. This requires the destruction of the old and the creation of the new.
What are not re-engineering?
Re-engineering is not just change in the business. The following are some of the NOT’s of re-engineering:
- Downsizing of the organization business
- Restructuring the organization business
- Automation or technology up-gradation
- Software Engineering
- Reorganizing the structure from flat to tall or tall to flat.
- Quality improvement
- Total Quality Management (TQM) /Total Quality and Productivity Management (TQPM).
- Continues incremental and slow improvements.
Hammer and Champy basically view that re-engineering is about REVERSING the industrial revolution. Re-engineering rejects the concepts like division of labor, economies of scale, hierarchical control and the like.
Characteristics of Re-Engineering
Re-engineering varies from one business to another. However, Michael Hammer and James Champy observed some common characters in the re-engineering process of their client firms.
1. Several jobs are combined into one: The feature of re-engineered process is absence of an assembly line. The formerly distinct tasks/ jobs are combined and compressed into one. The jobs are combined mostly based on the needs and preference of the customer.
2. When jobs are integrated, the chances of errors are reduced, eliminates misunderstandings, delays and reworking are minimized.
3. Workers make decisions as they are required to do so. Jobs are combined, both horizontally but also vertically. In other words jobs are compressed based on job enlargement and job enrichment. Vertical integration incorporates the tasks of decision making in the top ladders of the hierarchy. In addition, the workers in the re-engineering are empowered. The empowered workers are motivated and self determined to make decision. Decision-making is part of the work of the workers.
4. Compressing the work both horizontally and vertically reduces delays, overhead costs and betterment of response and satisfaction of customers.
5. The steps in the process are performed in a natural order straight-line sequence is avoided in the re-engineering. Activities are performed not in artificial order but in natural order. This process is termed as ‘De-linearising’ which allows performing of many jobs simultaneously. This process reduces the process time and thereby delay.